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How to prove Substance in Georgia to work with Georgian banks


Until 2023, Georgia has not yet signed an agreement on the continuous and automatic exchange of data on clients of tax authorities from other jurisdictions under the CRS protocol. Therefore, many entrepreneurs are considering this country for opening a corporate account and doing business. In addition, in Georgia, in addition to the high level of confidentiality of banking operations, there are legal ways to reduce the tax burden. This interest could not have been overlooked by banking structures and the conditions for opening accounts for non-residents have become more stringent. In this article, we will analyze in detail the question of how to prove Substance in Georgia in order to work with Georgian banks.

What does the economic presence in Georgia mean?

Substance means that your company really does business in Georgia. Confirmation of this fact is necessary for banks and tax authorities in order to exclude the possibility of money laundering or tax evasion in the country.

In connection with the Anti-Money Laundering law, which Georgian banks rely on when deciding to close an account, Georgian companies with a non-resident beneficiary undergo a thorough check of the entire document flow and require substance on the territory of the country.These regulations were designed to prevent money laundering, financing, and the spread of terrorism.

Your economic activity and presence in the country must be officially proven - only in this case you can count on opening a corporate account in Georgia and not be afraid that it will be closed during the next check.

How to prove substance in Georgia?

Just a rented office or a place in a coworking space will not be a sufficient justification for proving an economic presence in Georgia. Based on the experience of our clients, we have compiled a list of measures that need to be taken (most often it is better to combine several of them):

Get a VOIP phone number that is connected to your smartphone.

  • In a bank check, your company number that starts with +995 will serve as sufficient justification. This service costs from 7 € per month.

Use the service of a local director.

  • We wrote in more detail about all the pros and cons of this method in this article.

Hire an accountant on the territory of Georgia.

  • If you conclude a contract with an accounting company in Georgia and it will deal with the maintenance and filing of reports, then the Georgian bank will have sufficient grounds for your substance, because it will see all the turnovers through the tax office.
  • You can learn more about the peculiarities of accounting in Georgia and the cost of accounting by clicking on the link.

Hire any other employee on the territory of Georgia.

  • The presence of employees on the territory of the country is considered by banks as the actual presence of the company. In addition, you can open a salary project in this bank, thereby dispelling all doubts.

Prepare the company's website in Georgian.

  • It will be enough to create a landing page, the main thing is that the domain is Georgian. Translation services are relatively inexpensive, and the domain is even cheaper.

Rent an office in the country.

  • Renting an office will cost a little more than making a website, for example, but if you make cashless payments through the company's account, then this will be a sufficient basis for the bank's compliance. Constant rental payments will help determine the real economic presence in Georgia. This also includes the option of renting a space in the coworking space.

Local contractors.

  • If you have an already formed business model, then this method will be quite difficult to implement. But if you have implemented 3 or more of the points that we described above, then Georgian banks may not pay attention to the lack of local counterparties.

Organizing a real economic presence of a company in the Georgian jurisdiction is especially important not only for opening an account, but also for a business that claims preferential taxation regimes. To understand which method suits you best and find Georgian counterparties without problems, organize accounting or rent an office on favorable terms, how to prove Substance in Georgia to work with Georgian banks - leave a request on our website, we will consult for free and find a unique solution to your problem.

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