Two years ago Luca Gorlero, the founder of Affinitas Consulting (www.affinitasconsulting.ae, global phone number: +442070486824), opened a Georgian branch in Tbilisi with the goal of connecting European and North American companies with emerging markets by providing commercial and company formation services, market research as well as tax advisory and corporate finance services. Georgia Today spoke with Mr. Gorlero about the current business trends on the international market and the prospects for Georgia.
Q: Please share your impressions regarding the Georgian market…
A: I came here 2 1/5 years ago thanks to an invitation by the Tbilisi Opera and my dear friend and fellow Italian Gianluca Marciano’ and saw the potential of the country in various industries such as agriculture. Unfortunately over this span of time almost all development have been mostly in other industries such as hospitality but of the area the country made progress. In spite of the fact thatGeorgia has no energy resources like Azerbaijan does, there are still many opportunities for development in a variety of sectors: logistics, hydro-electric power, hospitality and key infrastructure development in selected areas. In general I am very positive about the growth opportunities of the Caucasus as well as the Caspian area as well and because of it we are committed to develop our presence in the region over the next few years. I am particularly optimistic about the opportunities in the agricultural sector, there are very few areas in the world that present such agricultural potential, and demographic trends surrounding the Caspian area are going to favor a very fast development. I personally believe that over the next 20-30 years, we will see a renaissance of this area and these countries will contribute a much greater share of the world’s economy than now.
Q: How great is investor interest currently? And what do you offer them?
A: I feel Georgia is still in transition time since the last election, I hope that the upcoming presidential election is going to give investors a positive indication of both consistent direction and FDI friendly policy making. I am sure larger investment opportunities will materialize after that. Right now we are welcoming private investors from the SME sector, the investment values are consistent but still relatively small as compared to other countries in which we operate. To channel foreign investment or just providing structured financing into larger project we are looking forward to develop a consistent dialogue with the existing government.
At this moment we have a consistent stream of investors interested in Georgia that reach us via our consolidated online presence. If you go on Google from our key markets and type “business set-up in Georgia”, we are consistently record number one or two. It is our mission to be a connecting element for business people who want to start a business in Georgia, and in the Caucasus in general.. That has been the reason behind investing in our Business Center in Freedom Square (2/1 Sh. Dadiani Str., Tbilisi 0105, Office Phone: +995 32 247031) where companies can start operating their business from.
We focus on providing services that best meet the needs of business people approaching a new country. We provide tax advisory services, legal services related to company formation, acquisition of various assets and contract negotiations.
Q: Which type of companies and from which countries are the most frequent clients at the Tbilisi office? Can you describe their interests in more detail?
A: Since the last 6-8 months we noticed a decline in the overall volume of requests that we receive from investors related to Georgia I believe mostly due to some regulatory changes or mere interpretation of the immigration law. This doesn’t generally affect our revenue stream because we tend over comply with existing regulations and only bring in investors that have clear plans about Georgia and have proven resources available. Among the nationalities most interested we have traditionally seen: Iranians, Gulf countries nationals, Indians, Pakistani nationals, and Egyptians from Christian background. We couldn’t help but noticing some of the sensitivities around the Indian investment influx in the agricultural industry, especially in the Kakheti region which I believe contributed to the recent changes in legislation. While I appreciate the sensitivity of the argument, the current availability of investment resources makes it such that foreign direct investment in this industry is much needed . I hope that the dialogue and focus will shift towards developing regulations on how to best qualify the needed investment rather than closing the door to it.
If we talk about large size Affinitas clients, we can see that interest while still existing it is at this moment waiting for some regulatory dynamics to develop before committing to the country.
Q: Taking into consideration the current developments, can you predict the future of the Georgian market? What is its potential and prospects, and what are the chances of achieving this?
A: I hope that soon the waiting period for country will end and we’ll have a clearer understanding of the dynamics at play. I hope for a Georgia that develop its interests around private foreign direct investment and less on NGO programs honestly. Now some investors have the impression that Georgia is not ready to embrace process. But we want this place to be ready. We committed to the country and look forward to develop with it.
Another topic that is really sensitive to many Georgians is the relationship with Russia. I personally hope that the relationship improves and the signs are positive in this regard. Russia is a natural trading partner for Georgia and any normalization of existing relationships could be nothing but positive. Look at Dubai and look at Singapore or Malaysia! What did they do to become successful? It was the ability to work with everybody and I think it’s a great opportunity for this new government. You need to cooperate with everybody and manage to maintain a delicate balance among everybody’s needs. And playing ball with Russia should open many doors – tourism, export etc. I believe that a practical way of acquiring latitude in decision making at the macro-economic level is to develop a robust and very open financial market inviting financial resources from all neighbors and beyond. When money from many parties is in the country, everybody has a vested interest in keeping the country safe and contribute to its development. It worked wonders for Dubai, Singapore, Malaysia and others... It can work here as well.
Q: What plans and innovations does Affinitas Consulting have now?
A: We have just completed a significant joint venture with Norange Capital Markets in Hong Kong just last week. This truly boosts our ability to structure the financing of large infrastructure projects in the emerging markets. We are looking forward to get involved in Georgia, Azerbaijan and Kazakhstan as soon as possible.
Another important news specific to Georgia is that we have launched in July a very interesting program called “Affinitas Opera Awards”. We want to offer Georgia what many opera houses all over the world already have: a prize that rewards young opera composers.
There are many awards for singers. There are many Georgian opera professionals that already make you proud all around the world – Nino Surguladze, Nino Machaidze, and among the new generationTeona Dvali and Sophie Gordeladze for example... Well, I’m interested to contribute in finding and helping the young composer talent grow as well.So we have created the Affinitas Opera Awards, which awards 10, 000 Lari to the best Georgian composer of the opera. The winner will be announced at the end of the year.
While we are the main sponsor of the event we work with the Georgian National Opera and few other key personalities in the art scene to turn this program into reality. I am really very excited about it, we aspire to develop this Award into a yearly event that will cross the borders of Georgia and will include composers from neighboring countries. I love art, and I am especially close to opera as a family passion and to tell you the truth art and trade are the best vehicles to bring people together, bridge cultures, and promote development all at once.