Nominee director in Georgia

This service is no longer available. If you need a similar service in Georgia or analogue, please contact us at info@offshore-pro.info.

Our company can provide for an opportunity to enhance the confidentiality of your business in Georgia through the use of our nominee service. The cost of this service is US$ 2 500 per year. The payment is to be made to our bank account in a foreign bank. We also provide other services such as business company registration, opening personal and corporate bank accounts, and accounting support. Our employees are highly skilled lawyers and accountants who are fluent in English and very knowledgeable about the Georgian legislation. 

About nominee service in Georgia

Georgian laws do not forbid concealing the names of real company owners and directors. The nominee service is very popular among foreign business people as it allows veiling their connection to the company from their competitors as well as the regulatory authorities in their home countries. First and foremost, this service would be valuable for those who do not want they names to be associated with a foreign business.

The local legislation allows appointing as nominee directors and company constitutors both Georgian and foreign citizens. The nominee director and constitutor is most often one and the same person. Combining these two roles is also not prohibited by law.

In essence, the nominee service provides for the following: the company representative in Georgia performs actions strictly following the instructions given to him or her by the real owner. The nominee director can have a legal entity registered, or open a corporate account in the bank, or communicate with the Georgian state agencies, and so on.

Our clients usually apply for the nominee service for the following reasons:

• To keep the information about the real business owner off the public record: such record will contain the nominee director and constitutor’s detail;
• To enhance the level of confidentiality of the money flows in foreign countries;
• To have the opportunity to effectively run the business in Georgia without being personally present there;
• To increase profit from the deals made between the companies that the client owns in different countries (by having a VAT refund, for example, or using some other privileges the importer or exporter is eligible for);
• To open a business in a preferential taxation zone thus optimizing the tax payments;
• To gain access to the national small and medium-size business support programs.

Appointing a Georgian citizen director of the company brings some considerable benefits. For instance, a legal entity with a citizen of Georgia as its head will be able to open a corporate account within one working day. At the same time, Georgian banks are often cautious about foreign company constitutors. They will want to have their backgrounds carefully checked before opening an account for them, and this may take a whole week.

The responsibilities of the nominee representative and the real company owner in Georgia

An agreement between the beneficial owner and the nominee director/ shareholder will specify the responsibilities that the latter has. Usually these include the following:

• Company directorship;
• Promotion of the company interests;
• Finding solutions of any legal, taxation, and administrative problems that might occur;
• Appointing personnel with the concurrence of the beneficial owner and supervising their performance;
• Informing about any changes in his or her personal details;
• Abstaining from giving bribes or gifts as well as from making illegal offers to any third parties including government officials. Unless such actions do not violate local laws;
• Keeping record of all the expenditures as well as supporting documents. Please bear in mind that all the expenses that the nominee director incurs are to be compensated by the real owner on the condition that these expenses have been previously approved and agreed upon by the latter;
• Attending all business meetings and reporting to the real company owner.

Besides, the nominee director has no right to delegate his or her responsibilities to third parties. He or she shall perform their duties in good faith, acting in the interests of the company and in accordance with international and local laws including the anti-corruption laws. The most important thing is that the nominee director may not perform any action at all without instructions from the real owner. In order to sign a contract or make a bank transfer, for example, the former shall have a written permission from the latter to do so.

If the company incurs losses or damages due to the nominee director’s fault, he or she is obliged to compensate for these. In case the nominee director suffers losses or damages because of the real owner’s actions, the latter shall compensate the former for those. The beneficial owner shall also guarantee that his or her company will not be involved in any illegal business.

Sometimes there will be some special requirements that the beneficial owner will have for the nominee director. For instance, the company policy may forbid appointing anybody under 21 years of age to top positions. Or the type of the company business presupposes that it should be headed by a female or, vice versa, by a male.

The risks of using the nominee service in Georgia

The main risk that the real owner runs is losing the control over the company and its assets. Apparently, the nominee director has a possibility to take over the company. However, this is not quite so. There are factors and instruments that limit the nominee’s possibilities. These include the following:

• Limited access to the bank accounts for the nominee director. The real owner of the company is most often the one who takes charge of the cash flow management. With Internet and / or mobile banking, doing it is easy. After the corporate account has been set up, the real owner obtains all the logins, passwords, and password generation devices – on a personal visit to the bank or by mail;
• An nominee director employment termination agreement with an open date. Such an agreement gives the real owner a possibility to fire the director retroactively. Thus, should any undesired action on the part of the latter occur, it can easily be rendered unauthorized;
• A general power of attorney in the name of the beneficial owner signed by the nominee director;
• An irrevocable sale offer to the real owner of the company.

In addition to what have been said above, the risk of losing the business is even lower in Georgia if the local mentality is taken into consideration. Here people hold their reputation dear. Besides, who would want to lose a source of steady income? It is not easy at all to find a well-paid job in Georgia, and a fraudulent act on the part of the nominee director would quickly become infamous given the small number of population in this country. And anybody who has been found cheating will have serious trouble finding a new job.

Main points of the agreement with a nominee in Georgia

Cooperation between the real owner of the company and the nominee director is governed by an agreement that they sign. The agreement is made in English, and each party shall have a copy of it. If necessary, the agreement can be written in any other language.

The standard duration of such agreement is two years. It can be automatically prolonged for one year if neither of the parties gives a 120-day termination notice to the other party. The agreement can also be terminated without any explanation. In this case, it becomes void in 60 days after a written termination notification was issued.

Besides, the nominee is not allowed to receive gratifications or gifts from third parties if their cost exceeds 500 lari (around US$200). If this happens, the nominee director shall immediately inform the real owner.

Also, the person acting as the nominee director shall not have nominee directorship contracts with more than 10 other companies.

The agreement between the beneficial owner and the nominee director obliges both parties to keep the details of their cooperation confidential. The information pertaining to the following issues is not to be disclosed:

• The company accounting policy;
• CEO, manager, and employee details;
• Company structure;
• Company partners;
• Company activities and business plans.

The nominee director shall keep this and other information confidential for at least six months after the agreement expires.

The procedure of making a nominee agreement in Georgia

An application for the nominee service usually accompanies an application for company registration in Georgia. You do not have to come to Georgia in order to choose a nominee candidate. This can be done remotely if you specify the characteristics that the prospective nominee director should have: his or her sex, age, qualifications, etc.

The procedure of appointing a nominee director can be broken down into the following steps:

1. Send us an application for this service to e-mail: info@offshore-pro.info.
2. Fill out a small questionnaire for us to determine your needs.
3. Using any method, make a payment against the invoice to our account in a foreign bank.
4. Choose the candidate and sign an agreement with him or her (you can do it personally or by issuing a power of attorney).
5. Obtain a general power of attorney for company control transfer from the nominee director to you.

Apart from the nominee service, you may be interested in other services that we provide, such as opening a personal or a corporate account in a Georgian bank, having a business company registered in a Free Industrial Zone, or obtaining a virtual entrepreneur status. We provide all sorts of services related to establishing and conducting business in Georgia. Please contact us via e-mail: info@offshore-pro.info and our experts will get back to you as soon as possible to discuss all the details concerning your business activities in Georgia.