There's a lot of misinformation being spread regarding business accounts with Georgian banks, with some people saying it's "no longer possible for a business with 80% or more of foreign income to get a bank account in Georgia" and others claiming that for a Georgian high street bank to consider you, you'll need to have a Georgian among your board members.
I'm posting this because I successfully proved that these claims are all complete and utter BS, and that as of March 2020, Bank of Georgia does open accounts for foreign-owned entities, but you do have to have a real business and be able to prove it. (Anecdotal evidence suggests that the same is true for TBC, but I lack personal experience with them).
Background
I didn't start out with a ton of hope, as a few months ago I applied with all of the main banks and got a swift rejection from every single one.
And in every case, it was a straight-up rejection, not a request for more documentation, etc. The decision had been made and wasn't to be appealed.
But before giving up completely, I decided to get better prepared and try again, mainly because even though Transferwise and the likes are an option, if you have any actual business activities in Georgia (even as much as a single employee), not having a local business account is a nightmare for a number of reasons.
The Setup
So here's what I did, step by step.
1) Created a decent website for the company;
2) Drew up a detailed service agreement with the (foreign) business that most of my GE business's income would originate from;
3) Rented a small office in Tbilisi and hired 2 people. Made sure the employment contracts are solid, bilingual, etc;
4) Signed an agreement with a local accounting firm.
5) Had my accountant come to the bank with me, to be able to fill in the application in Georgian, rather than English.
I then brought all of these documents along, went to the bank to apply again, and insisted that the lady at the bank attach them to my application. She initially refused, saying something along the lines of "the back office will ask you if they think they'll need any docs. For now, you don't have to submit anything" ... which I knew from prior experience isn't true at all. She finally budged.
Now, probably most importantly of all, I applied for a GEL-only account. This, I believe, is crucial. I again got pushback from the bank employee, saying "... but USD & EUR are free to open", but managed to convince her at the end.
Just to be clear, I do plan on opening a USD account, but I believe it's much better done at a later date. That's because once the initial KYC is done, you can open new accounts as you please through the Internet Banking app, and it's instant & automated. And even if/when they do ongoing KYC/DD, you'll be in a much better position and with more leverage once you already have an account with transaction history. Until then (probably a few months), I'll simply use Transferwise for my USD needs and ship a bit of GEL from there to the BoG account each month to cover the local opex.
The reason why that's important is, of course, that these days banks are more afraid of USD than anything else. Losing correspondence banking for USD due to too many dodgy transactions would be a fatal blow to any bank, which makes their risk appetite virtually non-existent. But tell them that you don't want to have anything to do with USD, and suddenly they're welcoming you with open arms.
The Result
Went to the bank at 11am. Received an email with account details & internet banking instructions by 5pm the same day.
The bottom line is that whoever says stuff like "Georgian banks aren't accepting foreign-owned businesses any longer" either doesn't know what they're talking about or can't be bothered to put in the necessary work. The above shows that if you can demonstrate to the bank that you have a real business with real Georgian presence then they're still happy to do business with you. And personally, I consider it a good thing. What was happening in Georgia up until mid last year isn't sustainable by any stretch of the imagination, and had the banks continued to open accounts for anybody who bothers to ask, they simply wouldn't have remained in business for much longer. (At least not in any useful capacity)
Put in the work and you shall be rewarded 🙂
Hope someone will find this helpful!
I'm posting this because I successfully proved that these claims are all complete and utter BS, and that as of March 2020, Bank of Georgia does open accounts for foreign-owned entities, but you do have to have a real business and be able to prove it. (Anecdotal evidence suggests that the same is true for TBC, but I lack personal experience with them).
Background
I didn't start out with a ton of hope, as a few months ago I applied with all of the main banks and got a swift rejection from every single one.
And in every case, it was a straight-up rejection, not a request for more documentation, etc. The decision had been made and wasn't to be appealed.
But before giving up completely, I decided to get better prepared and try again, mainly because even though Transferwise and the likes are an option, if you have any actual business activities in Georgia (even as much as a single employee), not having a local business account is a nightmare for a number of reasons.
The Setup
So here's what I did, step by step.
1) Created a decent website for the company;
2) Drew up a detailed service agreement with the (foreign) business that most of my GE business's income would originate from;
3) Rented a small office in Tbilisi and hired 2 people. Made sure the employment contracts are solid, bilingual, etc;
4) Signed an agreement with a local accounting firm.
5) Had my accountant come to the bank with me, to be able to fill in the application in Georgian, rather than English.
I then brought all of these documents along, went to the bank to apply again, and insisted that the lady at the bank attach them to my application. She initially refused, saying something along the lines of "the back office will ask you if they think they'll need any docs. For now, you don't have to submit anything" ... which I knew from prior experience isn't true at all. She finally budged.
Now, probably most importantly of all, I applied for a GEL-only account. This, I believe, is crucial. I again got pushback from the bank employee, saying "... but USD & EUR are free to open", but managed to convince her at the end.
Just to be clear, I do plan on opening a USD account, but I believe it's much better done at a later date. That's because once the initial KYC is done, you can open new accounts as you please through the Internet Banking app, and it's instant & automated. And even if/when they do ongoing KYC/DD, you'll be in a much better position and with more leverage once you already have an account with transaction history. Until then (probably a few months), I'll simply use Transferwise for my USD needs and ship a bit of GEL from there to the BoG account each month to cover the local opex.
The reason why that's important is, of course, that these days banks are more afraid of USD than anything else. Losing correspondence banking for USD due to too many dodgy transactions would be a fatal blow to any bank, which makes their risk appetite virtually non-existent. But tell them that you don't want to have anything to do with USD, and suddenly they're welcoming you with open arms.
The Result
Went to the bank at 11am. Received an email with account details & internet banking instructions by 5pm the same day.
The bottom line is that whoever says stuff like "Georgian banks aren't accepting foreign-owned businesses any longer" either doesn't know what they're talking about or can't be bothered to put in the necessary work. The above shows that if you can demonstrate to the bank that you have a real business with real Georgian presence then they're still happy to do business with you. And personally, I consider it a good thing. What was happening in Georgia up until mid last year isn't sustainable by any stretch of the imagination, and had the banks continued to open accounts for anybody who bothers to ask, they simply wouldn't have remained in business for much longer. (At least not in any useful capacity)
Put in the work and you shall be rewarded 🙂
Hope someone will find this helpful!
