How opening a consumer bank account in Georgian bank by non-resident legal and natural persons?
The present legal guide serves to discuss the theoretical and practical issues of established standards and alternative ways of opening a desired type of bank account by a non-resident legal or natural person in the banks operating in the territory of Georgia.
The relevance of this topic is justified by the fact that, taking into account international standards and Georgian banking/financial regulations, it is one of the most controlled and transparent systems of cash circulation, which offers the most effective standard of consumer protection.
Taking into account the above, in the modern world, the process of digitalization of remittances, transfers, receipts or other types of bank transactions digitalization is actively underway, which is a matter of constant monitoring, observation and study, and in any case, it is the essential basis for solving the issue of registering a bank account of an interested individual or legal entity in Georgia.
Basic banking services and products in banks operating in Georgia
Receiving basic banking services and products in banking institutions operating in the territory of Georgia begins with the registration of a unique means of accounting of a person’s cash in the bank. During the initial registration, the bank and the user determine the desired bank account type, taking into account the purposes of its use.
In this regard, the Law of Georgia “On Approving Instructions on Opening Accounts in Banking Institutions and Conducting Operations in Foreign Currency” allows several types of bank account in Georgia registration, namely
the Law of Georgia allows several types of bank account in Georgia registration:
- Current bank account;
- Deposit bank account in Georgia;
- Correspondence bank account;
- Cash service bank account;
- Nominal ownership bank account.
Taking into account the legal objectives of this guide, attention will be focused on the main use account, in particular, the current bank account in Georgia, which is the only acceptable and suitable banking product for the effective implementation of entrepreneurial and/or non-entrepreneurial activities of a natural or legal person, although this does not exclude the possibility of registering another type of bank account if necessary.
A current bank account, by legal definition, is a bank account in which a person’s funds are recorded and which the client disposes of for making payments or for any other purpose. Taking into account the scope, goals and scope of business activity, the current account can be opened as:
- a single currency bank account, during which money is disposed of only in the national currency or in one specific currency, or
- a multi-currency bank account, It is possible to record funds in several currencies separately, which, despite the variety of currencies, at the same time represent one quantitative account;
This issue should be agreed upon before registering a bank account, taking into account the purpose of opening the account.
The second stage of the initial registration of bank account is devoted to the obligation of the interested individual or legal entity to submit relevant identification documentation.
The list of documents to be submitted for bank account by a non-resident legal entity includes:
- Application for opening an account
- An extract from the relevant register or another document that determines the legal status of a non-resident in accordance with the legislation in the country of the non-resident and
- A document confirming the identity of the person(s) authorized to open and dispose of the account and sample signature.
The mentioned documentation is spelled out and prescribed by the legislation, however, this does not exclude the possibility of establishing a request for submission of additional documentation by the banking institution. Based on this, the registration documentation of the bank deposit may not always be the same and may differ depending on the internal policy of the banking institution in Georgia.
Anti-money laundering and anti-terrorist financing bank standards in Georgia
For example, in order to open a bank account in Georgia, taking into account both international and national anti-money laundering and anti-terrorist financing standards, when a person submits a registration application, the bank additionally requires for non-resident legal entities the submission of relevant information, the submission of documents confirming the sources of both money and property of the beneficial owner of the entrepreneurial society or the beneficial partner owner. Proof of income is essential when registering a bank account and its veracity and authenticity are subject to examination and verification by the relevant specialist.
After the submission of the present documentation, the process of verification of the interested person and verification of the received documentation takes place, as a result of which a positive or negative response to the application is received. It is worth noting that banking institutions are not limited in the grounds of refusal to accept the application, and they are empowered by law to refuse registration of the application on the basis of suspicion of illegality and/or, moreover, the banking history of the interested person, the purpose of opening the account and/or other relevant circumstances.
This causes dissatisfaction among interested parties, although it is worth noting that such a high standard serves as a guarantee of preferential protection of the interests of other consumers, and such an approach is legally justified.
Summarizing the procedure for opening a bank account in Georgia
This article clearly shows that the process of registering a bank account in Georgia provides an opportunity to establish standards different from its theoretical and legal regulation rules. That is why, it is often the case when the interested person, despite the analysis of the preliminary legal framework, faces practical inaccuracies, which ultimately creates the impression of conducting bank account registration with a complicated model.
Nevertheless, a multi-currency consumer account is an indispensable tool for the effective implementation of business activities, which, at the same time, within the framework of the legislation, provides the possibility of simplifying the transparency of business activities and income monitoring.
 Order No. 2 4/04 of the President of the National Bank of Georgia – “On approval of instructions on opening accounts in banking institutions and conducting operations in foreign currency“.