A citizen of any country can become a beneficiary of a Georgian company. But it is more difficult for foreign-owned companies to get a corporate bank account in Georgia. In addition, it is important to understand the specifics of paying taxes using international agreements on the avoidance of double taxation in relation to the beneficiary and his country of residence. In this article, we will take a closer look at who the beneficiary is in Georgian legislation and explain the basic concepts associated with this status.

Who is the beneficiary

A beneficiary in the broadest sense is a natural or other legal entity that receives money or other benefits from a legal entity.

The beneficial owner can be the founder of the company or an appointed director, as well as any of the owners or beneficial owners. The main factors determining the beneficiary are the ability to actually control the business of the company and make a profit.

The beneficiary alone or the beneficiaries by general decision appoint the director of the company, who alone manages the company, is responsible for all business operations and can be replaced at any time by a similar decision.

Beneficiary in Georgian legislation

In Georgian legislation, the concept of a beneficiary has a similar meaning to the generally accepted one. But in Georgia, the beneficiary does not participate in the economic activities of the company, if he does not work in it. With regard to a legal entity, the beneficiary can be an individual with the following characteristics:

  • If it owns a legal entity;
  • If it controls it through ownership of shares;
  • If it has the right to vote in matters relating to governance;
  • If it owns the participatory interest through bearer shares or control by other means.

Here is an example: the only participant in a Georgian LLC is a company registered in Singapore. The 100% shareholder of the said Singapore company is a company registered in Cyprus, the 100% shareholder of which is citizen N. In this case, citizen N. is the ultimate beneficial owner of the Georgian LLC.

Georgian legislation obliges legal entities to have information about their beneficial owners, regularly update them and record them in documents. Among other things, it is necessary to store such information for at least 5 years.

The Public Registry in Georgia is available online and you can specify the beneficial owners of any Georgian company.

More information about the information that a legal entity must have about the beneficiary:

  • surname, name, patronymic or registered name of the organization;
  • residency information;
  • date of birth / foundation;
  • details, identity documents;
  • residential addresses \ legal address and actual residence;
  • taxpayer identification number.

As we wrote above, companies whose beneficiary is a non-resident need to go through a thorough check before opening a corporate account in a Georgian bank, we talked about what is needed for this in the previous article.

If the beneficiary is an individual who is a resident of a country with which Georgia has concluded an agreement on the avoidance of double taxation, he is taxed on dividends in only one country, depending on the terms of the agreement. That is, if you paid in one country, it is no longer necessary in another if there are no other conditions of the contract.

If you still have questions regarding who is the beneficiary in the Georgian legislation of status, then leave a request for consultation.

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