Dateline: Tbilisi, Georgia I spent much of the flight from Kuala Lumpur to Istanbul reading a personal development a friend recommended to me. While I’m typically rather impatient when it comes to long tomes, I found this one fascinating. It’s the kind of book that you immediately want to recommend to everyone you know. That’s how powerful it was. And for quite some time now, I’ve been talking about the same effect for planting flags in Georgia. I’ve apparently even gotten a reputation for being “the Georgia guy”; a friend of mine who is moving here told his friends, only to be told “you must follow that Andrew Henderson guy”. I won’t re-hash how Georgia has quickly become highly capitalist and one of the most free economies in the world. Or how it’s one of my best countries in the world for business. Nor will I re-hash how I went from not buying real estate here, to buying a property of my own, which is currently under construction. Today, I want to talk about banking in Georgia.
How Easy is it to Open an Offshore Bank Account?
A lot of offshore banks around the world are facing big challenges right now. As high-tax jurisdictions continue their rampage against capital flight, countries like Belize have seen their international banking hubs severely impacted. One bank there has already gone under. It’s not that the banks themselves are always a problem — although some are — rather, the problem is that they are tax havens in the backyard of the United States. Occasionally, one of the less than professional bankers on some island allows a suspected terrorist to open an account there, and all hell breaks loose. Meanwhile, jurisdictions like Hong Kong are burying many foreign depositors in paperwork as they strive to join the tax lovers at the OECD, and most banks have increased their standards. (My clients and I use one bank that is still easy to deal with, but it’s a small bank and hard to get in without an introduction.) A jurisdiction like Georgia hasn’t seen such problems precisely because it’s not a tax haven, nor is it a large offshore financial center. It’s not even on the radar of the vast majority of people. So, what is the easiest way to open an offshore bank account here?
Why Georgia is a “new safe haven”
Several of my in-the-know clients have told me that they agree with my position on Georgia. I know several wealthy individuals who bank here and get top-notch service by depositing as little as $50,000. Service here reminds them of the “good old days” of private banking in countries like Hong Kong, where banks like HSBC are now impossible to deal with. In fact, as I have written before, it’s possible to open a bank account in Georgia with as little as $7 (actually, $8.38 at today’s exchange rates). The process at my favorite banks takes as little as ten minutes. If you’re a US citizen or have US indicia, you’ll be asked to fill out a few forms for the IRS, but that’s about it. You don’t need piles of paperwork or anything like that. You basically just show up with the cash in your wallet, make a minimal deposit, and get started. Once you’re in the door with a particular bank, opening additional bank accounts is quite easy. Georgian banks don’t offer remote account opening, but service, once you’ve opened at least one account, is good, and you can handle most account functions from home after you get set up. In fact, online banking for the Georgian banks I deal with is refreshingly simple. Almost stupidly simple. For as much as I love banking in Singapore, banks there sure do give you a lot of codes, PINs, and access numbers to remember. In Georgia, it’s simple. You can move money between Georgian lari, US dollars, and Euros in a single click. Exchange rate spreads at the bank are extremely small; if you’re making a really large deposit, you can get one-way spreads as little as 0.13% on the street. That means it costs $1.30 to change $1,000 from USD to GEL. Dirt cheap.
How to open a bank account in Georgia
You don’t need a lot to get started banking in Georgia. Far and away the biggest challenge will be flying to Georgia to appear in person. Once you’re there, however, the process is easy. There are so many banks here, but it’s the country’s business-friendly laws, rather than the specific policy of one bank, that makes the account opening process so easy. That said, there are some banks I’d suggest avoiding. On the one hand, I have a friend who is on the board of directors of a mid-sized bank and he told me that he’d feel comfortable depositing up to $10 million in his favorite two banks. On the other hand, he would be more careful in the smaller banks and avoid a few of them entirely. He and I are both fully confident in the best banks to manage our cash wisely; you just need to do your homework and choose the best bank for you. In addition to ease of opening, Georgian banks offer both ATM and debit Visa Electron cards that can be used anywhere in the world Visa is accepted. It’s also a great tool to have for booking travel online in Europe, as Electron cards incur lower transaction fees from cheap airlines. While bank fees here are rather low, interest rates are quite high. We’ve discussed how 5% interest rates on short-term US dollar term deposits aren’t out of the norm; and if you’re willing to bet on the Georgian lari, you can earn even higher yields. (Be aware that the currency has dropped 25% since I was here last December.) Opening an offshore bank account is an easy way to diversify your finances, and if you’re willing to get on a plane, I’d strongly consider Georgia for its ease of account opening and maintenance. I might even be so bold to say that it’s the best place to go right now if you’re looking to deposit a mid-sized sum. Banking, however, is just one of several flags I am planting in Georgia and recommend to you. Due to increased interest in bank accounts, companies, real estate, and investments in Georgia, I’m considering hosting a small mastermind event here next Spring to help clients who are interested in taking advantage of what I believe could be “the next America” or “the next Singapore”. If you’d be interested in working with me to plant flags and look at investments here, apply for a Strategy Call so we can determine your best options as part of a personalized and completely legal offshore plan.