Last updated October 12th, 2023.
I spend most of my time making investments in frontier markets. That said, I’ve taken steps to diversify the rest of my life internationally too. It’s not all about investing.
One way I’ve done this is by obtaining residence in the Republic of Georgia (not to be confused with the US state) earlier this year. I hope to invest in Georgia soon and spend time there.
Why get residency in another country? First of all, tax reasons. US citizens are especially in a difficult place. Unlike almost everywhere else in the world, American citizens are taxed based on citizenship and not residence.
For example, a German citizen living in Singapore no longer pays tax to Germany and instead pays it to Singapore. He’s no longer living in Germany, after all. Why should he pay taxes to a country when he’s not living there to use the services his taxes go toward?
Americans aren’t so fortunate. The IRS wants a cut no matter where you are in the world. The “Foreign Earned Income Exclusion” is the only respite.
This exclusion lets Americans deduct around $120,000 worth of taxable income if they’re living abroad. Having an official second residency in Georgia, or elsewhere, to prove your foreign taxpayer status helps to get this exclusion.
In general, getting residence or dual citizenship opens up many doors. It’s easier to deploy capital across the world when you have documents in several countries, for example.
The Best Government in Eastern Europe?
For the most part, governments aren’t looking out for their citizens’ best interest. Some countries are no doubt better than others though.
Getting residency is a bureaucratic process practically everywhere in the world. Georgia makes it easier than most though. Needless to say, this lures entrepreneurs to invest in Georgia.
My process of filing for residency in Georgia took less than a week, and the entire process was done at the Public Service Hall in Georgia’s capital of Tbilisi.
Georgia’s public service hall is a massive, newly built, dome-like structure. The building has banks, cafes, and dozens of sections with queues taking care of everything from residency to pension applications.
The mere thought of so much government in one place gives some people a headache. However, the Public Service Hall is clean, well-organized, and my queue came up quickly.
The Public Service Hall in Tbilisi is a one-stop center for getting anything done with the government. Each notable city in Georgia has its own Public Service Hall, although others aren’t as remarkable as the one in Tbilisi.
Despite all of that, I would not recommend going through Georgia’s residency process by yourself. A good lawyer is a must.
Why? Well, most government workers don’t speak English. Not only that, but they unexpectedly called me in for an “interview” a week before my residency’s approval.
I wasn’t in Georgia at the time… my lawyer was able to complete the interview on my behalf though. Ultimately, this saved me days worth of time and thousands of dollars I didn’t have to spend on an extra flight back.
Something else went wrong too. For the first (and hopefully only) time in my life, I lost my passport.
This story could be an entire article in and of itself. Yet the short version is that I was able to track down my passport three days later through the help of my lawyer in Georgia.
Why Invest in Georgia? Efficiency & Prosperity
Georgia’s simple residency process is a good representation of the country as a whole. Banks in Tbilisi are open until 8PM on weekdays while online wire transfers are a breeze.
Companies can be opened in about a day. Meanwhile, Georgia jumped to 15th place on the World Bank’s Ease of Doing Business Index in just a few years.
As a result, entrepreneurs from all over the world are considering Georgia as a place to invest, buy property, and start a business.
Georgia’s inward foreign direct investment increased by 8.9% last year – over three times the world average of 2.7%. New businesses are opening all over the city.
Real estate values in Tbilisi are also on the uptrend as people flock to invest in Georgia and its booming economy.
In some ways, Georgia’s economic growth and government policies are similar to the early days of Singapore. Most of us are familiar with the story of how a malaria infested swamp became one of the most important financial centers in Asia.
Nowadays, Singapore is Asia’s de-facto financial center and a major wealth management hub. You won’t get permanent residency unless you spend many years living and working in the city though. Either that, or invest tens of millions of dollars.
Singapore is rich, developed, and desirable enough to where they can be very selective about immigrants. The island has limited space available and it’s no longer in their best interest to flood to the country with anyone other than UHNWIs. Back to Georgia though!
Overall, I’m very happy to have received residency in Georgia. I look forward to seeing the country’s future and involving myself more in it.
Will Georgia go the same way as Singapore? Only time will tell, but I’m personally betting money on it.
One thing is almost certain: if it ever does, investing in Georgia or its capital city of Tbilisi will become a lot more difficult.
Skip the Next Western Recession
Learn the best places to invest - and where to avoid - by downloading our free Investment Cheat Sheet.