The FINANCIAL — Eristavi Law Group is the first Georgian company to have been named the 2012 Best Banking and Finance Firm in Georgia by The World Finance Legal Awards.
Furthermore, David Eristavi, a partner at Eristavi Law Group, received special recognition as the Best Lawyer in Georgia.
“The London Stock Exchange along with World Finance explores the situations on legal markets throughout the world. This is the first time that Georgia has participated in this programme and it is noteworthy that it has been awarded in its first attempt,” said Managing Partner Revaz Beridze in his interview with The FINANCIAL.
Innovation, originality and quality of product, proof of market development and excellence in serving clients are the criteria that resulted in the company being awarded. Exactly these criteria help the company to support business development in the country.
Eristavi Law Group offers unparalleled legal representation across a comprehensive range of practice areas for both individuals and business entities with over 15 years of experience. The company has already expanded its practice to Batumi and plans to open offices in Kutaisi and other cities in Georgia.
Q. Please summarize the year 2011 in terms of business development. Also, what is your outlook for 2012?
A. Because of the ongoing crisis in the world, 2011 was a slightly trying year. Despite this a growing business trend is evident. There is also obvious activity of foreign companies with the desire to enter the Georgian market. Countries in the region, Ukraine, Iran, West European countries and Baltic countries are all interested in having businesses in Georgia. The economic, political and legal stability and simplified procedures in the country are the main components that have resulted in the decisions of so many foreign companies to enter Georgia.
As for the outlook for 2012, growth of interest in Georgia will continue. The entrance of foreign companies in Georgia is directly or indirectly connected to the availability of qualified legal service. So I expect the company to have a more busy and fruitful year. We are already holding negotiations with different foreign companies, new investors which are going to enter here.
Q. Eristavi Law Group expanded its practice to Batumi. Why did it become necessary to extend operations to Batumi?
A. The new office is easing business dealings between Turkish and Georgian businesses and facilitating a more productive business dialogue between the two countries in Adjara. Turkey is an important partner of Georgia. The flow of Turkish investment is large in the Adjara region. It is one of the top countries in terms of foreign trade with our country. This is one reason why we decided to open an office in Batumi. Another reason is that we have high expertise in transport and transport related issues – Batumi and Poti are regional transport hubs. From Batumi we also operate in Poti. Zurab Garuchava has joined the Batumi office as a local partner. He has an extensive background in international and transportation law and an impressive professional resume that includes positions as Head of Law Office at Poti Free Industrial Zone, Head of the Law Office at the Georgian National Transport Regulatory Commission in Tbilisi, Head of the Legal Division at the Georgian Maritime Transport Administration in Batumi, and senior lawyer at the Poti Sea Port in Poti.
By the end of 2012 we are going to open a new office in Kutaisi as well. Demand for qualified legal service is high everywhere, which we are taking into consideration. The fact that Kutaisi will become a parliamentary city will raise its activity as well. We try to follow such developments as they unfold in the country.
Q. Together with you, American law company HBSS is involved in the business development process in Georgia. What caused HBSS’s interest in cooperating with you?
A. Eristavi Law Group and HBSS have been partners since 2010. Our strategic partnership expands our capabilities both locally and internationally. We jointly offer our service to customers. We share common corporate values and have similar vision for conducting business, probably these were main determinants for HBSS while choosing local partners.
Q. The availability of credit for small and medium businesses in Georgia is low. That is one obstacle for business development in the country. In your opinion why do the banks not give cheap credit to small and medium businesses?
Improving the access to finance of small and medium enterprises is crucial in fostering entrepreneurship, competition, innovation and growth. Access to sufficient and adequate capital to grow and further develop their activities is a difficulty faced by many SMEs. This situation is compounded by the difficulties in accessing finance as SME financing is considered by many financial providers as a high risk activity that generates high transaction costs and/or low returns on investment. Moreover, SMEs need to meet the challenge of adapting to the changing financial environment and the increasing complexity and extent of corporate governance.
Small and medium businesses make up a very significant segment of our clients. From our side we offer affordable legal service to them. The cost of service depends on the specific case and its particulars and in some instances, especially on initial stage it is offered free of charge.
Q. One of the directions of your group is the taxation sphere. In the new tax code there are lots of mistakes and inaccuracies, economists are saying. How do you manage to protect your client’s interests given the situation?
A. We have strengthened the group who works on the tax issues. We have employed two tax lawyers thus bringing total number of lawyers in the firm to 20. They have huge experience in tax law and this experience was gained throughout the years of work both in public and private sectors. As for the new tax code lots of issues are much improved and clarified as compared to the previous one. The tax sphere is very complex and contains lots of peculiarities. It is not surprising that the code has some inaccuracies. But law is law and it needs to be followed. The best way is to have qualified advice on the stage when making decision or taking action, and that’s where we can be of enormous help for our clients. It is much easier to prevent a problem than overcome it.
We want to persuade people that the best thing is to avoid problems by seeking qualified advice from the very beginning but if they have a problem the best thing to do is to make full use of existing legal tools including taking problem to the court.
Q. As for investments, in your opinion do the investments being implemented in Georgia create such a supply to raise the country’s competitiveness?
A. Work aimed at attracting investments on one hand raised awareness about Georgia worldwide and on the other hand brought investments. In general there are several positive aspects of investment: integration into global economy, technology advancement, increased competition, improved human resources. In my opinion most of the investments made in Georgia where bearing in their most aspects mentioned above.
Q. The number of registration of transactions in the real estate market has increased by 25.8 percent. This is a record figure, and 2011 is considered a record-breaking year. In your opinion what caused such an increase?
A. The main reason for this increase is economic stability. Regardless of crisis the real estate market is still a place where people invest. Economic growth brings increase in welfare and subsequently logical desire to improve living conditions. Simplified procedures connected to property registration also help this growth. In the past several months were needed and several agencies to be visited to finalize purchase of real estate. Now the process has been significantly simplified through the Public Registry – one-stop-shop, it is the only place one has to visit in order to do real estate related transaction.
Q. It is said that the bankruptcy law is not ideal. Given the situation what would you advise to businessmen who want to annul their business?
A. The reason why a company might want to stop its activities is not always necessarily financial problems. In some cases when a company has achieved its purpose , it may want to stop its economic activities. If we talk about time frames necessary for closing business, it is obvious that it cannot be done overnight. Legal entity might have unfulfilled obligations towards other persons, including state. It takes time to have all interested parties having claims aware of a decision of closing business.
The construction sector, energy and mining, private enforcement, intellectual property and transport are the main fields we provide legal services in. The number of our customers in these sectors is the bigger portion of our overall pool of clients.