OPEN A BANK ACCOUNT IN TBILISI GEORGIA

    Open a Bank Account in Georgia. Relationships with Georgian Banks.

      Georgian banking system pros and cons

As you decide to move/expand your business to Georgia or open a startup in Georgia, you will most definitely need a Corporate Bank Account at Georgian Banks. Also, of course, you will most likely need a Georgian personal bank account.

Banking Sector is quite developed in Georgia. All commercial banks are accredited and controlled by the National Bank of Georgia. The services are advanced, and the modern design and functionality of internet banking and private banking are appealing. In case you manage to have an account with all services activated, you will not have a problem making transactions remotely.

There is a wide range of banks to choose from, the biggest of them being Bank of Georgia and TBC Bank, both suggesting security of financial transactions and a wide range of services, for years already. Both companies are listed on London Stock Exchange, thus, their activities are under strict control and review.

Georgian Banks also appeal to customers with the fact that Georgia it is not a party to the Common Reporting Standard (CRS) Automatic Exchange of Financial Account Information, thus Georgian Banks do not have the obligation to hand over any data automatically in the global system of automatic exchange of information, which results in a sense of more security for some of our clients.

However, Georgia plans to start the exchange of financial information by 2023 (thus, become a member of CRS). It means that most likely, there will be the first exchange of information in 2023 - namely the 2022FY.

       Bank account opening Procedure

The procedure of application for a bank account and its outcome varies, depending on the residency of the applicant, type of intended bank account (personal or corporate), type of business itself, and the way of the process - remote / in person.

Georgia is one of the rare states, that allows the opening of a bank account on the basis of the power of attorney, however, technically such a process does 't work in many cases and may require your physical visit to the bank discussed below.

Opening of a Georgian Personal Bank Account

       By a resident of Georgia

Any Georgian bank is open to serve tax residents of Georgia or to serve persons holding a residence permit (a tax residency and residence permit are two different notions, a Georgian residence permit grants you a right to stay in Georgia for the period on which it is granted, tax residency, on its end, makes you subject to taxation in Georgia, by living in Georgia for more than 183 days).

Opening a Personal Bank Account for a resident person, either through power of attorney or by a physical visit to a bank, will most definitely be a successful process. The only document needed for opening such a bank account is a Georgian ID card or foreigner's passport WITH a tax residency certificate issued by the Georgian revenue service, stating that the applicant is a Georgian tax resident.

In case you're using a power of attorney, a notarized and apostilled copy of your passport or an ID card will be needed (Apostille or legalization is needed if the POA is sent from abroad).

     By a non-resident of Georgia

       In-person

Normally, all Georgian banks allow opening a bank account for a non-resident physical person, if a person applies in person (not through power of attorney). No proof of address is required, only your passport. A simple KYC form, with a couple of questions, will be filled, either on your own or by the bank staff, depending on the bank you apply to. E-banking, digital (token), debit (Visa, Mastercard) cards - everything is easily obtainable.

      Remote Opening of a bank account in Georgia

The number of banks, willing to open bank accounts for non-residents via Power of Attorney, decreases each year in Georgia. There is almost no bank in Georgia where you'll succeed in opening a personal bank account via POA, irrespective of citizenship, except, TBC Bank, which is the only bank still allowing such practice, by the moment of writing this article.

In TBC, an extended KYC form is filled and a thorough AML check is conducted on the applicant, with which we can assist as well. Normally, we conduct a pre-approval process of the client with the bank, which minimizes the risks of failure of the application.

Despite TBC allowing the process, there are obstacles to getting ULL access to the bank account services and obtaining debit cards. Many of the ordinary bank services (such as internet banking) are still restricted for remote clients, even if the power of attorney grants full rights to all types of actions on behalf of the applicant. However, our experienced banking professionals are knowledgeable in the ways of overcoming such obstacles, remotely, without bothering our clients and having unnecessary expenses.

Also consider, that even our solution of getting full access to the services, sometimes turns out to be temporary and limited and ways of acquiring banking services remotely will be closed, as Georgia’s ongoing European integration process pushes the banking sector to implement more strict policies.

Moreover, even if we manage to open a bank account remotely, it doesn't mean it will not be closed. This may happen if a person receives big amounts of finances and refuses to show evidence legitimating this specific transaction, and /or immediately directs the received money elsewhere, again, without showing legitimacy.

      Opening of a Georgian Corporate Bank Account

       When the shareholder(s) is(are) resident(s) of Georgia

If the application on the corporate bank account is made by the company / individual entrepreneur, whose shareholder (each holder of 20%+ / self-employed) is a Resident of Georgia (determined above) there will be no problems with opening a bank account, including the case opening a bank account via power of attorney.

However, to have all services activated, the presence of the director(s) of the company may be required at the bank.         

       When the shareholder(s) is(are) non-resident(s) of Georgia

Opening a bank account for a company held by a non-resident person is a complex procedure in Georgia. The only Georgian bank with whom we work and who still opens bank accounts for such cases is TBC. 90% of other banks refuse the application almost automatically, the 10% of the banks (except TBC) start the process of checking the company, but in 1 or 2 days, inform the applicant about the refusal.

If a company is owned by a physical person(s) and they visit the bank in person - chances of success are very high. The procedure may take 1 day, without any restrictions. Consider the policy of Georgian Presence and legitimate transactions (discussed below), otherwise, the account may get closed.

If the application is made on the basis of the power of attorney and or the owner of the company is a foreign legal entity - the chances of the opening of a bank account are lower, becomes much longer and even
in the case of opening - not all the banking services will be activated remotely. In such a case, as mentioned, a visit from the director may be required by the bank.

However, as mentioned before in this case we have the same requirements even if the opening of the bank account is successful: accounts may still get closed if the business does not meet the requirements of Georgian Presence and No-Transit Account policy.

       No Transit Account Policy

What are the activities that the business pursues? - This is one of the main questions a bank will ask regarding a company. The bank wants to make sure, that the business you pursue, does not lead to any unlawful activities and, that it complies with the Anti Money Laundering policies. They will ask for information such as the website, contracts with counterparties, contracts with clients, and documents related to the presence in Georgia.

       Georgian Presence

As mentioned, one of the main prerequisites for opening a bank account in Georgia, the Georgian Presence, which can be substantiated by different pieces of evidence and arguments, is discussed below. the more link you have with Georgia, the more you'll have the chance to gain the trust of the banks and result in opening a corporate account.

Have Georgian Clients: In case your business already has Georgian Clients, there is a higher probability that the bank decides, that your presence is existent.

In case the business is oriented to deliver on International Market, it is highly advisable to comply with at least two of the following requirements:

• Have employees in Georgia;
• Have an office in Georgia;
• Have counterparties (i.e., sub-contractors) in Georgia.

The risk of closing a bank account can be lower with meeting the requirements, but there is no guarantee that the account gets opened, and if opened - that it does not close due to AML restrictions. Each case is individual and, in any case, the bank’s back office (who is absolutely unidentified), makes decisions based on the risks related to the Client.

Timeline. It may take somewhere between a week to a month and more, to open a Corporate Bank Account in Georgia for companies owned by non-residents, depending on how much additional requirements/documentation is demanded.

      Opening of a corporate bank account for a non-resident company in Georgia

Opening of Georgian corporate bank account for non-resident companies is very rare. Such bank accounts are considered very risky for the bank, so in 99% of cases, it is refused. There is a big list of documents required for such an opening but after submission of all of the documents - there is a very high risk of refusal.

Irrespective of residency (though non-residents have a little higher risk) there is a chance of closing of any type of bank account in case a suspicious transaction takes place and no respective proof of the legitimacy of the transaction is shown.

       Alternative: use of the Fintech Accounts

Some of our clients, use Fintech Bank, etc. They are very convenient, grant you your own account number, and charge low fees. They are accredited financial institutions (licensed electronic money institutions). Take, WISE and Buildering’s - both are controlled by the Financial Conduct Authority (FCA), Paysera - by the Bank of Lithuania respectively.

The only downside to this solution is that it is not possible to pay taxes to the Georgian Treasury System via Fintech Banks. However Georgian PERSONAL bank account can be used, the opening of which is pretty easy as discussed. Alternatively, we do provide the service of paying taxes on behalf of our clients.

To sum up, opening any type of bank account in person is much easy, and more effective, and increases the chances of opening while opening any type of bank account remotely, especially corporate bank accounts are hard and ineffective.

However, whichever type of bank account you need, irrespective of the way you choose to open it - our professionals are up-to-date with all the latest banking updates. We know all the "tips and tricks" to make the process smooth and less costly for you. We are also equipped with tools to help you maintain the outcome.