It is unlikely to worry anyone working in Silicon Valley, but the Caucasian state of Georgia has declared an ambition to turn itself into a tax-free zone for IT companies.

According to a Russian news site, Georgian Prime Minister Nikoloz Gilauri, the state wants to lure foreign software companies to use the country as a cheap development centre.

The country already gives indigenous companies tax-free status if they operate from special industrial zones in the cities of Poti and Kutaisi, but the new breaks are squarely aimed at outsiders.

Sandwiched between Turkey and Iran to the south and Russia to the north, Georgia’s current significant export industries are oil and gas.

Fresh from a military confrontation with Russian in 2008, Georgia is unlikely to get many takers from foreign companies. The sort of software skills that countries such as Georgia have to offer can be bought without incorporating there.

Even in countries without a recent history of conflict, perks such as low or no tax will probably only attract developers from the immediate geographical region. Large IT houses want long-term guarantees over taxation and governmental stability, neither of which Georgia is in a position to offer.