LIVING – INVESTING – OPPORTUNITIES IN GEORGIA
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LIVING – INVESTING – OPPORTUNITIES IN GEORGIA
The first time I stepped into the Public Service Hall in Batumi, I was really impressed that a developing country could have such 1st-class governmental services all under one roof. The services provided are also excellent and you do not have to worry about language barrier as most of the staff could speak English. (From what I gathered from a Coastal Guard employee, most government employees are given free English lessons). Most of the times, as soon as I got my queue number, my number was already displayed on the board and a customer officer was waiting to serve me. I do not remember having to wait for more than 15 minutes except in Tbilisi.
Registration of Company, Marriage, Property, ID card etc are all being provided here. At times, when my internet connection was down, I would go there with my Ipad. Wifi connection is free and fast, no need to have password, and the tea (lemon tea – 50 tetris) from the vending machine is very good.
Public Service Hall Website : http://psh.gov.ge/index.php?sec_id=1&lang_id=ENG
Buying Cars
No restriction on foreigners buying cars and having them registered under their names. However, a valid address is required and the owner has to be present to consent to the use of his/her address. Buyer pays the transfer fee which is about 78 lari inclusive of the car number plate, which the buyer can retain or choose any numbers displayed on the shelves at Rustavi AutoPark. Custom made or special number costs about 200 lari upwards. Rustavi Autopark is a weekend car market for buying and selling and the transfer office is also stationed there. Insurance is optional and there is no road tax on Georgian roads.
Unlike other developing countries like Cambodia, motorcycles are rarely seen on the roads. Reason given is that it is more expensive than cars. Continental cars are popular here, with spare parts and servicing of Mercedes and Opel easily available and non-expensive. Initially, I thought that automatic transmission cars are preferred here, However, only last week, learnt that manuals are preferred as maintenance is cheaper.
Foreigners with foreign registered cars are allowed into Georgia for 90 days without having to pay custom tax and before the 90 days, drive out of Georgia into neighbouring countries, such as Turkey and return for another 90 days. This info I got from a friend. Insurance fee is payable at the Turkish custom.
Links : http://myauto.ge http://autopapa.ge
INVESTING, LIVING IN GEORGIA
Foreigners can purchase and own condos, apartments in Georgia registered in their names. For agriculture land, prior to the suspension http://www.civil.ge/eng/article.php?id=26287) foreigners need to set up a company to have the land registered under it. However, this issue is not clear. Many locals are not happy with foreigners buying agriculture land and this prompted the Georgian government to propose changes. (http://www.georgiatoday.ge/article_details.php?id=11151)
Many Indians had come to Georgia and bought lands, especially in the Kakheti regions and manage the land themselves. One of my Indian friends are in a fix now because the government is not renewing his visa this year. He had bought two pieces of land in Sagarejo in Kakheti. In recent months, the Georgian government has stopped issuing visas to Indians. Citizens of many countries can live here for 360 days without a visa. (For visa check : http://www.mfa.gov.ge/index.php?sec_id=96&lang_id=ENG or https://lesleyang.com/useful-links) This is one of the reasons for my coming here. However, laws may change especially if there is a change in government. The next presidential election will be in October 2013. As with in investing in overseas, it is better to be cautious. Rules and regulations are subject to change within the government especially when it comes to foreigners buying up assets and driving up prices. I will only put in amount of money I am comfortable with and may not need in the near future. In the event of changes in the political scenes, or if I need to get out of the country urgently, I can do so without having to sell it at a loss.
However, searching for that ideal property is a challenge in Georgia without any knowledge of the language. I depend very much on : http://myhome.ge with google translate, for my search. For every 10 messages I sent out, I only get 2 or 3 replies. Most agents are not motivated and will not follow up and some do not even switch on their phones on weekends. Not all sellers have internet access, especially in the village. To find that undervalue properties, the best way is to live among the Georgians. Most Georgians are serious looking but honest. Vendors can get agitated and loud if you give wrong quantity or ask for refund or wish to exchange goods if you find the quality sub-standard. I always leave the shops, wondering what the heck is she grumbling about. It is also best to be wary who you deal with. Following is just one of my encounters.
“The price is $30k for you, same as for Georgians. I will not increase the price because you are a foreigner” said one property owner. I replied, “But on the internet, you advertised $25k”. “Did I advertise $25k, I forgot because it was a long time ago”. Then he added, “I can help you negotiate lower price for things you want to buy because most Georgians will mark up the price if they see that you are a foreigner”. In my mind, I was thinking, ‘I probably will end up paying higher price, with the vendor paying him his commission.’ He was very helpful and eager to help with language translation and directions, etc. I got him to call the seller (who does not speak English) of my present car. His brother knows how to inspect cars and will be able to know whether the car is roadworthy or not. So, he offered to bring me to Rustavi from Tbilisi with his brother and I paid for the petrol. With his help I bought the car. (The engine is powerful, however, minor things like overheating, wiper switch not working etc started to crop up.) He helped me drove the car back to Tbilisi. Days later, when David (I shall call him David, not his real name) learnt that I wanted to purchase a piece of land in Kakheti, he offered to drive me there in my car. He was worried that I do not know the way. He was sincere and concerned when I asked him to just direct me to central, instead, he drove all the way there and asked me to follow behind. It would have cost him a few lari of petrol. Also, take note that Georgians never fill their tank full. Each time, it is 5 lari or the amount enough for that particular journey. I was quite impressed. Still, I never let my guard down. He mentioned about importing VW from USA, as his brother is very experienced in tearing apart the parts and reselling them. He has ordered a VW that looks new, but had been submerged in flood water. His brother is able to repair it to it’s original condition and sell it in Georgia at about US$700 profit. I told him I am not interested in the car business, besides I do not know anything about cars. I can trust a person only 50% when it comes to trusting someone with my money and maybe 80% with my heart. Whatever is said, it does not matter. I can agree and seem to be like trusting 100%, do not wish to be impolite and be negative. Do not rebut. It is best to act stupid and dumb sometimes. Matter of fact, I am dumb and deaf in Georgia, I do not speak nor understand Georgian language.
I paid a deposit of $900 and the balance in 2weeks time for the $45k vineyard in Kakheti on the same day I went to view. Then David drove back to Tbilisi and I continued driving back to Batumi by myself. The Indian agent did not give me any acknowledgement not to mention a draft agreement, citing that this is Georgia, verbal is enough, there’s no need for a written contract.
Days later, David concerned about my investment after checking with his Kakheti friends that it is not a good piece of land in that region which is subject to bad weather, thunderstorm and advised that Gurjaani is a better place. His friends could help me find something better. I told him I had already placed a deposit and do not want to have it forfeited. His advice was better to forfeit the money than to buy something that is bad. He will try to get my money back, even suggested going to the police. My mind was a bit shaky not because of the thunderstorm, as this could happen anywhere, even on good piece of land. I was more concerned about the production of 60 tons of grapes per year. “One kilo of grapes can fetch about 0.60 US cents which works out to 36k and in 2 years you will get back your capital.” claimed the agent. With the Russians opening up the Georgian wine market, price will increase. But will the vineyard really yield 60 tons, it is only 12 acres and from what I read on the internet, 1 acre can get about 2-3 tons of grapes. Is the agent giving me a projection figure and not past figures. The vines are only 5 years old. So, after finding out that I could get some of my apartment rental money back from my landlord in Batumi, I called the agent and have him made my lodging arrangement. He was so confident that it is easy to get $200-250 a month apartment fully furnished with washing machine. There are also many hotels in that area. With his assurance and without any concern for accommodation, I went over the next day. I found out that there is only 1 hotel there and he told me it is not a safe place. I waited in his house for a few hours, (I think he was trying to find a place for me to stay that night, it was around 6pm when I reached there) I ended up paying $50 for an apartment a night and it would be $500 a month. Imagine, having to pay that much in a village. My rental in Batumi was only $350. But it is a very nice and cosy apartment.
Not only that that led me to suspect his credibility. The night before, I asked him if there was a thunderstorm where the vineyard is last year. He replied, “No, I was here and would know if there was a storm here in this region during that time.” After settling down in my apartment, I searched the internet, specifically key in that area in my search. Well, found out that particular area was hit by hailstorm very badly twice in 2012.
After spending some time around the town area and talking to the landlord’s relative who speaks English, I decided not to have any dealings with this agent. Was informed that he bought very cheap land and sold to the Indians at much higher price. It is better to heed the local’s advice : “don’t buy from Indians as they buy cheap and sell high” Though that piece of land belongs to a Georgian (it was a distressed sale), I still don’t feel comfortable so, I backed out of the deal. To be fair to the owner, I want my deposit back only if there is misinterpretation in the sale of the vineyard. To find out, I met up with the owner at the agent’s place, and got David to talk to him. I had to find out if the vineyard can really yield 60tons of grapes with the hail storm last year and also it was the 2nd or 3rd year production. David told me that the owner could show me documents, etc to prove that last year’s production was 60tons. There was a storm in the region, but the area where the vineyard is, was not affected. The owner is a serious, stern looking guy and seems honest, so I told David “I believe the owner, don’t bother to see the receipts but I do not wish to buy the vineyard and am willing to forfeit my $900.” “The owner can return you the money if you want to.” replied David
“You should have done your homework before you purchase the vineyard. We had been replying to your queries and answering your questions months before you came. You came and you saw the vineyard. Now, you are wasting my time, the owner’s time by backing out” chided the agent, who only gets commission from the buyer after successful deal. Seller does not pay commission to the agent, that is the norm in this area as informed by the agent before the sale.
I sprang up from my seat and screamed and shouted at him, “If I put a deposit for something, doesn’t mean that I have to 100% go ahead and buy the thing if I don’t like it. Do you think I like to lose $900? You know, the local warned me not to buy from you and that is one of the reasons. I do not trust you” before I stormed out of the house. He was speechless and I will never forget that big, cunning pair of eyes.
Seconds later, David called and asked me to get the contact number of the owner and he asked me a few times if I still wish to buy the vineyard without going through the agent. “I told him that would be undercutting and I am not interested anymore even if it can bring me a big fortune.” That was my last conversation with David and the end of our friendship, I did not bother to answer his calls from that time onwards following an email from the agent’s staff.
“The owner of the vineyard told me that during his telephonic conversation with your male friend in Batumi, he told that if he ( the owner ) promises him 5 % commission from the vineyard deal then he would convince you to go for it. And when the owner agreed to give him commission , then your friend told him that he would talk to Lesley in the night and press her to buy this vineyard.
He also said that he made 100 dollars from the car which he helped you to buy.
He said to the owner of the vineyard that he is very upset that Lesley didn’t buy his house which he put on the internet for sale. And since she trusts him completely and takes his advice for buying property, he wants a cut from whatever she buys in Georgia otherwise he would not let that deal happen.
Its very sad that you don’t know what is happening behind your back. “ wrote the agent’s staff.
Latest news about the agent, please read : http://www.hindustantimes.com/Punjab/Bathinda/Realtor-booked-for-defrauding-farmer-of-Rs-2-crore/SP-Article1-1103196.aspx
There are still many kind Georgians like the agent’s staff. I wouldn’t have known that David was paid $100 by the seller of my car if she did not bother to warn me. At the transfer office in Rustavi Autopark, I passed to David $100 for his brother in helping me purchase the car and also coming down to Rustavi from Tbilisi to give his consent for using his address.
My losing $900 is a blessing in disguise with the recent new legislation, thanks to David. It will be impossible for me to manage a 12-acre farm without living near the vineyard. Accommodation is a big problem, and I probably have to fork out another 20-30k for a house in Sighnagi if I cannot find a $300-350 a month rental apartment.
I am still searching for that 20k vineyard or nut farm with a house or other small business opportunities here. During this time, I am trying to see if I could live on a $100 or 165 lari a month budget. My internet subscription is 30 lari, water bill less than 3 lari, gas about 4 lari last month. I still have vegetables, meat etc I got from Carrefour last month. I do not go to town every week, so, it may be possible to spend less than 165 lari this month, hopefully.
3 Sep 2013
Singapore