IDFI: Number of Russian-Owned Companies in Georgia Reaches Record High
By Liza Mchedlidze
Tuesday, September 24, 2024
According to the Institute for Development of Freedom of Information (IDFI), the number of companies in Georgia owned by Russian citizens is approaching a historical maximum. Citing data from Georgia's National Statistics Service, the IDFI reports that as of June 1, 2024, approximately 37,400 companies are owned by Russian nationals in Georgia, with more than 30,000 of these companies registered after 2022.
The research indicates that 20,885 of these companies have an active status. Out of Georgia's total 257,245 active companies, 8.1% are linked to Russian ownership. The sharp rise in Russian-owned businesses began after the Russia-Ukraine war and the subsequent influx of Russian migrants into Georgia.
The IDFI highlights that many large Russian companies enter the Georgian market through offshore or intermediary entities, obscuring the true ownership of these companies. Additionally, some companies owned by dual Georgian-Russian citizens, or solely by Russian citizens, are not reflected in official statistics, complicating the identification of Russian businesses and their activities in Georgia.
A further issue arises with the registration of these companies, as many Russian LLCs and industrial enterprises list inaccurate or non-existent addresses, making it difficult to trace their actual operations.
Russian-owned companies are active across numerous sectors of the Georgian economy, including energy, telecommunications, industry, and gaming. The report also notes that 494 of these companies are founded by individuals holding dual Georgian-Russian citizenship, of which 100 are currently active.
One example highlighted in the study is "Georgian Dream" LLC, which operates in the sound recording and music publishing sector. This company is 100% owned by Bera Ivanishvili, son of Bidzina Ivanishvili. According to the most recent public records from 2018, Bera Ivanishvili is listed as a dual citizen of Georgia and Russia.
Additionally, 6% of Russian-owned companies in Georgia (2,041 firms) have Georgian citizens as co-founders, while 34,857 companies have no connection to Georgian citizens, meaning they are owned entirely by Russian nationals with no dual citizenship.
The IDFI also examined the ethnic background of Russian citizens founding companies in Georgia and found that only 4% of these businesses (1,209 companies) are owned by Russian citizens of Georgian origin.
The report concludes that 89% of the active companies are small, while only 0.5% are medium or large. The economic scale of 10.6% of these companies remains unknown, and 93% of them are registered by individual entrepreneurs.
