Open a sole entrepreneur’s or LLC’s account at a Georgian bank: what to do under Georgian law

What to do

1. Procedure: a sole entrepreneur’s or company’s account is opened on the basis of data on the assignment of a taxpayer identification number — registration comes first (Tax Code of Georgia, Art. 71); the account is opened under the anti-money-laundering procedure (and FATCA/CRS) (Law on the Activities of Commercial Banks, Art. 21¹); the bank must know its client, its activity and its money-laundering risk level (same law, Art. 21¹); the bank determines this itself and may request additional information (same law, Art. 21¹) — registry extract, charter or resolution, passport, data on beneficial owners, description of activity, contracts with clients, source of funds.
2. Refusal: the bank may refuse to open an account or to service it without any justification (Law on the Activities of Commercial Banks, Art. 21¹); refusal to provide tax residency information (FATCA/CRS) is grounds to refuse or close the account (same law, Art. 21¹). A bank cannot be compelled to open an account — the practical route is to supplement the file or apply to another bank.
3. Refusal because of citizenship: citizenship is a protected characteristic under the Law on the Elimination of All Forms of Discrimination (Art. 1), but that law applies to private individuals only if their conduct is not governed by another act that meets its anti-discrimination standards (same law, Art. 3) — and the bank’s right to refuse is set out in a special law, so the outcome of a dispute is unclear. Routes: complaints about discrimination are examined by the Public Defender (Ombudsman) of Georgia (same law, Art. 6); or a lawsuit in court for compensation of moral and material damage (same law, Art. 10).
4. After opening: the bank notifies the tax authority about the first account of a sole entrepreneur or company within 3 working days (Tax Code of Georgia, Art. 71); and until 2 working days have passed after the tax authority receives this information, it does not execute outgoing transactions (except tax payments) (Tax Code of Georgia, Art. 71).
5. Where to apply: bank (written request for the reason for refusal); another bank; Public Defender; court.
6. Evidence: registry extract and tax number, passport, charter or resolution, data on beneficial owners and source of funds, contracts or invoices, the bank’s written response.
7. Pitfalls: going to the bank before registering the sole entrepreneur or LLC — a tax number is required; expecting the bank to give a written reason for refusal — the law does not require one; treating a refusal of a citizen of a particular country as unlawful per se — the right to refuse is specifically provided for.

Be sure to check

• the bank’s right to request documents (KYC/AML) and to refuse without explaining the reasons
• typical document package for a sole entrepreneur’s or LLC’s account; the tax number is needed before approaching the bank
• notification to the tax authority and a pause on outgoing transactions after opening
• refusal on citizenship grounds — Public Defender or court, but taking into account the bank’s special right