FORMATION OF AN INVESTMENT ENVIRONMENT IN GEORGIA TO ATTRACT FOREIGN INVESTMENTS

Foreign direct investment plays a vital role in a country's economic development, as it increases domestic production and employment while bringing in foreign currency, knowledge, and technology. Foreign direct investment (FDI) refers to a long-term investment of capital in a business made by a foreign investor (a non-resident). For an investment to qualify as foreign direct investment, the non-resident investor must own at least 10% of the shares or equity capital of a local enterprise (for example, a foreign investor holding at least a 10% stake in a company registered in Georgia). FDI includes the establishment of new enterprises, the acquisition of ownership interests in existing companies, the purchase of real estate, reinvested earnings, the provision of loans, and other similar forms of investment. These economic transactions must take place between the investor and the direct investment enterprise. When comparing countries in terms of foreign direct investment, relying on nominal figures alone can be misleading, as larger economies require greater amounts of investment and also have a higher capacity to attract it. Therefore, the volume of FDI should be assessed relative to a country's Gross Domestic Product (GDP), and countries should be ranked according to this indicator to determine which economies attract the highest levels of foreign direct investment.