There are many reasons why foreigners are interested in opening an account with a bank in Georgia in 2022.
- First, it will help them facilitate and speed up settlements within the country.
- Second, we all know that it is more profitable to use payment instruments issued by the banks of the country where you are based to pay for services and withdraw cash.
- Third, banking services in Georgia are cheaper than in European and CIS countries.
- And most importantly, the country has all the qualities of an onshore jurisdiction!
Georgia offers very good conditions for conducting export-oriented business: low taxes, easy company registration process, and high reliability of the banking system. With all that in mind, many far-sighted non-residents decide to take advantage of this option and open a bank account in Georgia.
Banks of Georgia in 2022: 12 Years Without Bankruptcies
The security and stability of the Georgian banking system plays an important role in the decision to open an account here, especially for non-residents. Prudent people never opt for a bank unless they have sufficient evidence that their money is reliably protected and will not be transferred to an unknown destination or put under any threat.
Today, it is absolutely safe to open an account with Georgian banks as they all have a high level of capitalization and have demonstrated their reliability over many years. As of February 2022, there are 14 banks in Georgia, including 13 with foreign shareholders and only 1 bank fully owned by Georgian shareholders (the Bank of Georgia).
The number of bank branches as of February 2022 is 154. During 2021, their number decreased by 6, which is connected with optimization of costs due to the negative impact of the pandemic on the economy. However, this is the same number of bank branches that was functioning as of April 2020.
The banking system in Georgia has been showing a positive result for several years in a row, and its profit has been growing steadily. The last period when the banks sustained losses was 2009: the Georgian banking system declared a loss of 65.3 million GEL. However, it quickly bounced back and posted a profit of 156.27 million GEL a year later.
In the first year of the coronavirus, the Georgian banking system suffered significant losses (as probably the majority of businesses), but still managed to end financial year 2020 with a positive result (+99.3 million GEL). And in 2021, the total profit of Georgian banks exceeded the pre-crisis 2019 indicators by 54% (equaling 2.08 billion GEL).
In the first two months of 2022, the profit of Georgian banks amounted to 303.3 million GEL, which is 23.6% more than in the same period of 2021.
Stable returns in the banking sector naturally attract foreign investment in this area. If we look at the volume of investments received in 2021, the Financial Sector of Georgia occupies a leading position (38.5%), followed by the Tourism and Hospitality (20.0%) and Energy (13.6%).
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Deposit Insurance in Georgia in 2022
The deposit insurance system in the country was initiated relatively recently (on January 1, 2018). It followed the adoption of the relevant legislation, marking a positive step towards increasing the confidence and stability of the Georgian banking sector.
Thanks to the system launched in 2018, residents and non-residents can open an account with a bank in Georgia without fear to lose their money altogether when the bank goes bankrupt. However, the insurance system is still at its budding stage as it protects deposits in all Georgian banks only within the amount of 15,000 GEL (~$4,600). Deposit insurance law covers all types of deposits, current accounts, card accounts, term deposits and demand deposits.
Absolutely all Georgian banks are members of the deposit insurance system, so non-residents can open a personal account in Georgia in any of them without fear for their assets. And though the amount is relatively modest at the moment, we expect it to gradually increase. And, to end on a positive note, no Georgian bank has gone bankrupt in the last 10 years!
It should be noted that the following deposits are not subject to insurance:
- deposits access to which is limited by the legislation of Georgia (seizure of property, or deposits used as a loan collateral)
- deposits made by legal entities
- deposits made by the management of commercial banks
- deposits made by the bank shareholders that own 5% of shares and more, and their family members
Why Should a Non-Resident Open a Personal Account with a Bank in Georgia in 2022?
As the position of the Georgian jurisdiction in the field of international business is getting stronger and stronger (the country has been in the TOP-10 of Doing Business ranking for two years in a row), it attracts business people from all over the world, and especially those from neighboring countries. The main advantages of the Georgian jurisdiction include:
- simple company registration process: foreigners can set up a company in Georgia and start a business within 1 day. However, they almost never venture to do it on their own as there are two major obstacles here: knowledge of the Georgian language and a legal address they need to confirm. Fortunately, we have local agents who will easily help to overcome such difficulties.
- loyal tax system and tax benefits: the Georgian fiscal system is rightfully considered to be the best one in the region. Foreigners get a real opportunity to reduce the tax burden by registering an enterprise in the Free Industrial Zone of Georgia, creating an IT firm in the Virtual Zone, or opening an International Company.
- free access to the markets with more than 1 billion consumers for the producers licensed to sell under Made in Georgia label
- a large number of double taxation agreements and visa-free access for citizens from more than 100 countries. In addition, foreigners can stay in the territory of Georgia for 1 year without the need to apply for a visa.
The services provided by Offshore Pro Group will help you to significantly simplify the process of creating a legal entity in Georgia and save your time and resources.
Foreigners that open a personal account in a Georgian bank in 2022 will be able to do the following:
- credit their salary, dividends and other income to the account, including from other countries and electronic payment systems
- simplify the settlements within the country: a non-resident that opens a personal account with a bank in Georgia receives a plastic card of the international payment system, which can be conveniently used to make purchases in supermarkets or on the Internet, or withdraw cash
- purchase real estate in Georgia
- make payments to participants of the privatization auction in Georgia
- credit money from cryptocurrency exchanges
- make bank transfers in Georgia remotely
There is one more benefit for non-residents that open an account with a Georgian bank in 2022: they will be able to accelerate payments for goods and services. After all, transfers from other countries usually need to wait for several days, while a personal account with a bank in Georgia allows you to instantly transfer money.
A foreign businessman that has a personal account in a Georgian bank gets the opportunity to use other banking services:
- charge free money on the deposit account
- receive a debit payment card: Visa, MasterCard or American Express
- get a credit card
- obtain a loan against a deposit
- receive and send money transfers
- use online banking services
- open a multi-currency account
- change the currency
Also, foreigners can use premium packages of banking services, which include high interest rates on deposits, the issue of premium payment cards, an increased credit limit, a 24-hour concierge service, and individual service.
Open a Personal Bank Account in Georgia in 2022: Advantages for Non-Residents
A foreigner that opens an account with a leading Georgian bank in 2022 receives a lot of advantages:
- settlements with Georgian partners, as well as payment for goods and services, are accelerated
- commissions are reduced as the cost of financial services in Georgian banks is significantly lower than in the EU and many CIS countries
- high quality of service at an acceptable price: premium packages for individuals in Georgian banks are quite affordable
- the ability to remotely access accounts from anywhere in the world through online banking systems: Georgian banks actively use mobile and online banking
- no language barrier: most banks have employees who understand and speak Russian, English, French, Turkish and other languages
- no specific minimum balance on the account: Georgian banks do not require their customers to keep a certain amount on their personal account at all times
- increased level of confidentiality: foreigners that open a personal account with a bank in Georgia can rest assured that the information about cash flow will not reach the fiscal authorities of other countries. This is because Georgia is not yet a full-fledged participant of the CRS financial data exchange system. The first exchange of data is planned for 2023, and the country that will start the ball rolling is Germany.
A foreigner who has a personal account with a bank in Georgia receives more freedom of settlement in the country and benefits from a high level of funds protection. Moreover, the requirements applied to customers are much less stringent than in the European banks (for example, mandatory minimum balance to be kept on the account).
How to Open a Personal Bank Account in Georgia in 2022
Georgian banks are quite loyal to foreigners. However, in 2021 local financial institutions began to actively implement the AML/CTF rules. In this regard, the procedure for opening accounts by non-residents in Georgia has become more complicated.
Now all potential customers are required to go through KYC procedures and confirm:
- the purpose of account opening
- sources of origin of money and assets
- payment of all taxes on profits received
In connection with the above, non-residents will not be able to open an account in Georgia in 2022 with a foreign passport only, though it was quite possible a few years ago.
A non-resident usually has to submit the following documents to open an account with a Georgian bank:
- bank statement for the last six months
- a letter of recommendation from the servicing bank
- earnings statement
- marital status documents (marriage/birth certificate, etc.)
- documents that confirm ownership of assets
- contracts of lease or sale of real estate in Georgia
- documents confirming participation in the capital of a Georgian company
- employment contract
You will also need other documents that make it possible to find out where the money will come from and its origin, as well as the existence of links with Georgia. The above list is not final as the documents that banks require depend on the client’s individual characteristics.
Before you contact the bank, we strongly recommend you to schedule a meeting with our experts via online chat, WhatsApp, Signal, or through other messengers to get advice and assistance in opening an account. This will save you a lot of time and money and allow you to considerably simplify opening an account with a bank in Georgia.
We recommend that foreigners open a personal bank account with Bank of Georgia or TBC Bank. These two financial institutions control more than 70% of the country’s banking market and take the leading positions in the Georgian banking system by absolutely all important indicators: the size of the loan and deposit portfolio, the amount of assets and profits, and the number of branches.
It is common among Georgian banks to issue a payment card and provide access to online banking for customers. Thus, you will have a possibility to remotely control your cash flows and withdraw cash at ATMs around the world at any time. A personal account is often opened in several currencies at once, which makes it easier for a non-resident to make transfers.
Immediately after opening an account in Georgia, a non-resident or his proxy receives a contract for servicing the bank account. The document specifies the rights and obligations of the parties, service rates, and contains the account details. Georgia has adopted the international format of the IBAN bank account that consists of 22 characters and begins with the letters “GE”. The use of an international format speeds up transactions between foreign and Georgian banks.
An account in Georgia is one of the most affordable and simple instruments for those who want to access the international financial system and easily pay for the goods and services abroad. Send us a request to info@qwealthreport.com or contact us via live chat, WhatsApp, Signal, or other messengers, and we will help you open a personal bank account in Georgia in 2022.
