How to open a bank account in Georgia?
Georgian banking system pros and cons
There is a high demand right now to open a bank account in Georgia. Mostly it is related to the decision of the enterprise or of the physical person to move / expand business to Georgia, or open a startup in Georgia. In these cases one will most definitely need to open a Corporate / Personal Bank Account in Georgian Bank. Also, of course you will most likely need to open personal bank account in Georgia. However, even if you don't move to Georgia - it might be a safe harbor for your funds.
Banking Sector is quite developed in Georgia. All commercial banks are accredited and controlled by the National Bank of Georgia. The services are advanced, the modern design and functionality of the internet banking and private banking is appealing. In case you manage to have an account with all services activated, you will not have a problem of 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 customers with the fact that Georgia it is not party to 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 in some of our clients. However, Georgia has started exchange of financial information from 2023 (became member of CRS). It means that most likely, there had to be a first exchange of information in 2023 - namely of the 2022FY.
Procedure
Procedure of application for a bank account and its outcome varies, depending on 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 that rare states, that allows opening of a bank account on the basis of power of attorney, however, technically such process doesn't work in many cases, and may require your physical visit at 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, 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 physical visit to a bank, will most definitely be a successful process. The only document needed for opening such bank account is Georgian ID card or foreigner's passport WITH tax residency certificate issued by Georgian revenue service, stating that the applicant is 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. Simple KYC form, with couple of questions will be filled, either on your own, or by the bank staff, depending on the bank you apply. E-banking, digipass (token), debit (Visa, Mastercard) cards - everything is easily obtainable.
Remote Opening of a bank account
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 and Bank of Georgia, these banks 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 pre-approval process of the client with the bank, that minimizes the risks of failure of the application.
Despite TBC allowing the process, there are obstacles with getting the FULL access to the bank account services and with obtaining the 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 on all type of actions on behalf of the applicant. However, our experienced banking professionals know the ways of overcoming such obstacles, remotely, without bothering our clients and having unnecessary expenses. Contact us today!
Moreover, in Bank of Georgia we have a possibility to open a bank account without even sending a PoA - just via a videocall.
Opening of a Georgian Corporate Bank Account
When the shareholder(s) is(are) resident(s) of Georgia
If the application on 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 of opening 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 of 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 refusal.
If a company is owned by a physical person(s) and they visit the bank in-person - chances of success is very high. The procedure may take 1 day, without any restrictions. Consider the policy of Georgian Presence and legitimate transactions though (discussed below), otherwise, the account may get closed.
If the application is made on the basis of power of attorney and or the owner of the company is a foreign legal entity - chances of opening of bank account lowers, becomes much longer and even in case of opening - not all the banking services will be activated remotely. In such 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 a 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 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 the documents related to the presence in Georgia.
Georgian Presence
As mentioned, one of the main pre-requisites for opening a bank account in Georgia, is Georgian Presence, which can be substantiated by different evidences and arguments, discussed below. the more link you have with Georgia, the more you'll have the chance to gain the trust from 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, 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:
- (a) Have employees in Georgia;
- (b) Have office in Georgia;
- (c) Have counterparties (i.e. sub-contractors) in Georgia
The risk of closing a bank account can 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, 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
Opening of Georgian corporate bank account for non-resident companies is very rare. Such bank accounts are considered as very risky for the bank, so in 99% of cases it is refused. There is a big list of documents required for such opening but after submission of all of the documents - there is 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 legitimacy of transaction is shown.
Alternative: use of the Fintech Accounts
Some of our clients, use Fintech Bank Accounts such as WISE, Bilderlings, Paysera 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 Bilderlings - both are controlled by 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 into Georgian Treasury System via Fintech Banks. However Georgian PERSONAL bank account can be used, opening of which, is pretty easy as discussed. Alternatively we do provide service of paying taxes on behalf of our clients.
Summary
To sum up, opening any type of bank accounts in person is much easy, effective and increases chances of opening, while opening any type of bank accounts remotely, especially corporate bank accounts, is hard and possible to be opened only through our professionals.
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.
Authors: Giorgi Tsaguria, Mery Togonidze
