Georgia Tops Eurasian Business Rankings Despite Deepening Political Control

Subheadline: Heritage Foundation places three South Caucasus states in the “moderately free” category, but local experts warn weak courts and graft threaten long-term investor confidence

The Heritage Foundation’s 2026 Index of Economic Freedom ranks Georgia as the most business-friendly country in Eurasia, even as the nation’s political system has shifted toward centralised rule. The annual survey placed Georgia 35 out of 184 countries, highlighting low taxation, streamlined company registration and favorable trade and fiscal measures. Small and medium-sized firms—almost 99 out of every 100 Georgian businesses—remain the backbone of the economy, and many owners point to speedy licensing and predictable tax bills as reasons they set up shop here.

But the report also underscores a contrast between regulatory ease and institutional fragility. Georgia scored markedly lower on measures tied to judicial performance, public-sector integrity and protection of property. Business owners and analysts describe a situation where opening a company is relatively painless, while enforcing contracts and securing titles has grown more uncertain. “You can get your business registered in a day, but you can’t count on the courts if a dispute turns political,” said a Tbilisi-based economist who reviewed the index findings on the condition of anonymity.

Independent research published last year added weight to those concerns. A 2025 study from a university rule-of-law lab found that the judicial system increasingly aligns with the ruling party’s priorities and that central bank independence has been curtailed. Separately, a local anti-corruption group documented patterns of patronage and misappropriation in state institutions, saying that investigative bodies and prosecutors have often failed to hold officials to account. A small shop owner in Batumi recounted being pressured to make “informal” payments to speed inspections, reflecting grievances echoed in interviews across the country.

Neighboring Armenia and Azerbaijan also performed well in the index, coming in at 52 and 67 out of 184, respectively, and both fit the Foundation’s “moderately free” label. In Central Asia, Kazakhstan and Uzbekistan placed 68 and 86, keeping them in the same category. By contrast, Kyrgyzstan and Tajikistan were rated mostly unfree, while Turkmenistan fell into the lowest, repressed bracket. Regional analysts say these rankings matter for capital flows: investors weigh not only taxes and procedures but whether legal protections will hold over time.

Experts caution that strong scores on business-friendly policies won’t guarantee sustained growth if institutional backsliding continues. “Policy settings can attract short-term projects, yet sustained foreign direct investment needs reliable courts and transparent governance,” said a consultant who advises regional investors. Many local entrepreneurs agree: they welcome simplified red tape today, but worry that declining rule-of-law standards could damage Georgia’s appeal to larger, long-term investors.