Opening a business bank account in Georgia can seem like a daunting task, but with the right information it can be a relatively easy process. In this article, I will provide you with some essential tips to make the process as smooth as possible. Keep reading to learn more!
The banking sector of Georgia is equal to 58,150,000,000 GEL and this is more than the size of Georgia’s GDP. Citizens of almost all countries can use banking services in Georgia.
Why citizens of almost every country? For the security of the country and the bank itself, it is completely impossible to open a bank account in the case of specific countries, and in some cases it is possible after checking all documents and data about individuals.
There are more than 15 commercial banks operating in Georgia, the largest of which are Bank of Georgia and TBC Bank, which have been offering financial security and a number of services for years. The shares of both companies are listed on the London Stock Exchange, and their activities are under strict control and review.
Opening a bank account general procedures
When you decide to start, move, expand your business, or do a startup in Georgia, you will definitely need to open a corporate bank account. Also, of course, you will most likely need a Georgian personal bank account. The banking sector is quite developed in Georgia. All commercial banks are accredited and controlled by the National Bank of Georgia. The service is advanced, the modern design and operation of Internet Banking and Private Banking is attractive. If you manage to activate the account with all services, you will not have a problem to make transfers remotely.
Receiving financial services and using banking products in commercial banks mainly starts with opening a Current account.
Current bank Account is a financial product that banks offer to deposit and dispose of your money. Organizations can open settlements and current accounts with banks.
The current account is the main account of the organization through which all cash transactions are made without limiting their list. Current accounts are opened in all cases when any transaction is attached. Current accounts include: foreign currency accounts; Loan accounts; Funds report as intended; Accounts due to payment features, etc. Organizations have the right to open a current account in any bank to store funds and make all kinds of payments, credit and cash transactions.
Banks and foreigners
The procedure for applying for a bank account and the chances of success in opening it vary, depending on the applicant’s residency, the type of bank account (personal or corporate), the type of business itself and the way the process is carried out in person.
The possibility of opening a bank account by foreigners in Georgia has existed for a long time. However, due to recent events in the world, process have changed slightly and tightened.
Georgia is one of the few countries that allows you to open a bank account on the basis of a power of attorney, however, technically such a process often does not work and may still require your visit to the bank, we will discuss this issue in more detail below.
Opening Business Bank account for foreigners
Let us consider cases of opening a bank account:
When the partner/partners are residents of Georgia/have a residence permit
If the application for a business bank account is submitted by a company/individual whose shareholder (each 20% + shareholder/self-employed) is a resident of Georgia, there will be no problem opening a bank account, including opening a bank account with a power of attorney.
However, if all the services are activated, it may be necessary to announce the director/directors of the company in the bank.
When the partner / partners are not residents of Georgia
Opening a bank account of a company owned by a non-resident person is a more difficult procedure in Georgia rather the first one. There are several Georgian banks that we work with and that still try to open bank accounts in such cases.
Part of the other banks reject the application almost automatically, 10% of the banks start checking the company, but inform the applicant about the rejection within 2 or 3 working days.
There is one more thing to consider : if the company is owned by an individual, (s) and they visit the bank in person – the chances of success are high. The procedure can last 5-7 working days without any restrictions. However, consider the “stay in Georgia” policy and the legitimacy of the transfers, otherwise the account may be closed.
If the application is made on the basis of a power of attorney and or the company is owned by a foreign legal entity – the chances of opening a bank account are reduced, it will become much longer and even if opened – not all banking services will be activated remotely. In such a case, as mentioned above, the bank may request a visit from the director.
Here, too, it should be noted that even if the account is opened successfully, the accounts may still be closed if the business does not comply with the “stay in Georgia” policy and / or violates the “non-transit bank account” policy.
What activities does the company carry out? – This is one of the main questions that the bank asks about the company. The bank wants to make sure that the business you are running does not run any illegal activities and that it complies with its anti-money laundering policies. They require information such as a website, contracts with contractors, contracts with clients, and documents related to presence in Georgia.
Presence in Georgia
As we have mentioned, one of the main preconditions for opening a bank account in Georgia is its presence in the country, which will be substantiated by the various evidences and arguments below. The more connections you have with Georgia, the more chances you will have to gain the trust of banks and as a result open and maintain a corporate account.
Requirements and documentations for opening a bank account
Let us consider what requirements or documents may be requested to open a business account in a Georgian bank. These are:
Having Georgian clients: If your company already has Georgian clients, it is more likely that the bank will decide that your presence in Georgia is real.
If the business is focused on providing services in the international market, it is advisable to comply with at least two of the following requirements:
A) have working staff in Georgia;
B) have an office in Georgia;
C) have contractors in Georgia.
The risk of closing a bank account can be reduced by meeting the requirements, but there is no guarantee that the account will be opened and if it is opened – it will not be closed due to AML restrictions. Each case is individual and in any case, the bank’s back-office (which is absolutely unidentified) makes decisions taking into account the risks associated with the client.
However, according to the latest regulations, the procedure for opening a bank account has become quite complicated.
Banks have introduced a 2-stage verification system, according to which, you first have to submit specific information and documentation for the review of your application, and after passing this stage, prepare additional required documents.
The information provided in the first stage includes relevant answers to the probabilistic questions (to which other questions may be added). These questions may be:
Questions you have to answer when opening a bank account for your business
1. Purpose of opening an account in Georgia.
2. What business connection does the company have with Georgia?
3. Business activities of the company in detail.
4. Name the contractors (in Georgia, abroad) if you have any;
5. Company Website, if you have any;
6. What transactions are expected on opened accounts (transfers / transfers)?
7. Where will the company have an office?
8. What will be the volume of turnovers?
9. Will it carry out transactions only in GEL or in foreign currency as well?
10. Will the company have international transactions as well? With Who? To what extent?
11. Where employees will be employed
If the bank gave you a positive answer after answering these questions, the documents to be submitted in the second stage are:
1. Extract from the business register;
2. Company charter;
3. notarized copy of the passports of partners;
Note that this data is constantly changing and additional material may be required. However, 3 weeks are provided as standard for document review only.
During this period, the bank will provide you with an accurate assessment of the documentation, whether the documents submitted by you are sufficient in content and whether their certification structure is maintained. It is noteworthy that the documentation can be reviewed only in the second stage.
Fees for foreign owned companies
As we have already clarified, the procedures have changed, as well as the fees. For example, TBC Bank will review your application for a fee of 500 GEL.
The Bank of Georgia has not yet imposed such fee. As Liberty Bank clarified, the fee for reviewing their documents is 120 GEL, as for Terra Bank, they name 100 GEL as the fee for the first stage.
Can foreigners open a business bank account in Georgia remotely?
Yes. It’s still possible for foreigners to establish a company and open a business account remotely. However, the recent changes make the process more complicated. For more information read: Remotely Form A Company & Open A Bank Account In Georgia
What to do? Our Suggestions!
Before arriving in Georgia, if your goal is to open a bank account, be sure to follow the procedures specified above and be prepared to submit additional documents. Also, pay attention to specify the amount of value associated with the bank opening procedures / their change during your visit to Georgia. Make sure you arrive with full documentation and be sure to consult a lawyer before applying to any bank in Georgia.
We hope you liked this article and will help you while requesting to open business bank account in Georgia. If you have any questions or if there is a specific topic that interests, then leave a comment below and we’ll make articles about most requested topics for you.