Despite available tax incentives and legal benefits, some businesses in Georgia still prefer to operate in the shadow economy, a tendency largely driven by a lack of awareness and a fear of regulation, according to Jaba Gvelebiani, founding partner of Gvelebiani Law.
Speaking on the TV program Analytics, Gvelebiani noted that limited information and increasing regulatory pressure discourage entrepreneurs from formalizing their activities.
“Many entrepreneurs simply lack information about what comes next once they formalize their business. This fear is understandable; running an official business is not easy. Over the past five years, we’ve seen growing regulatory burdens and frequent legislative changes, which make formalization less attractive,” Gvelebiani explained.
He emphasized that raising awareness and promoting educational initiatives for small and informal businesses is essential to encourage transparency and economic inclusion.
According to Geostat, the shadow (unobservable) economy accounted for 13.6% of Georgia’s total economy in the second quarter of 2025, a decrease of 0.1 percentage points compared to the same period last year.
