Secrets of Successful Business in Georgia: Nominee Services and Management

In Georgia, legal entities are obliged to provide information about the beneficiaries. In other words, it is not possible to be a secret owner of a company in Georgia. This ensures transparency for the tax authorities and guarantees security for the country.

However, some businessmen do not want to advertise their ownership of a company in another country. Then they find a way out through a nominal service.

Let's talk about what this service is and what opportunities are open to the nominal business owner in Georgia below.

What is nominal service in Georgia

The notion of nominal service was created by business owners for the security of personal data. It is understood that the real owner appoints a manager or general manager residing in Georgia and imputes to him the duties of the head of the firm. In fact, he will be in charge of the company's administrative operations, but on paper he is listed as the company's first officer.

By complying with certain requirements of the country in which such a company is registered, it is possible to conceal the identity of the real owner of the company legally.

When nominal service applies in Georgia

In addition to hiding personal information about the company owner, some entrepreneurs resort to nominal service for other purposes that help businesses thrive in Georgia.

• In those countries where foreign nationals are not allowed to be company owners, they put a resident of the country in charge.
• In Georgia tax regimes are not available for foreign business owners, unlike for residents of the country.
• In some countries personal presence of the head of the company is required.
• Not all countries allow ownership of more than one business.
• To avoid reputational risks for new businesses.

More often the use of nominal service is resorted to by those owners who do not want to get into public registries about business activities. With competent paperwork, it is difficult to prove nominee ownership.

Peculiarities of a nominal business owner in Georgia

To establish a nominee director of a company in Georgia, a contract is signed where the role, responsibilities, term, and non-disclosure information are stipulated.

Obligatory clauses in such an agreement are:

• prohibition of disclosure of accounting policies,
• prohibition of discussion of managers and employees,
• prohibition on disclosure of counterparties,
• A prohibition on discussing the business plan and the work of the firm as a whole.

In the section on the responsibilities of the parties, it is better to spell out the role of the nominee manager with the following clauses:

• appointed as the head of the company,
• is obliged to conduct activities not to the detriment of the company but for its development,
• must resolve the problems of the firm of legal and administrative nature,
• must deal with the search for employees, their training and control over the implementation of the goals set,
• is obliged to provide timely information on changes in personal details,
• is responsible for the keeping of accounting and tax records,
• Is obliged to keep the accounting records.
• has no right to shift responsibility to other persons,
• must agree all transactions, payment of contracts and monetary transactions with the beneficial owner.

At the same time, the Georgian law does not recognize the nominal service, so all legal responsibility will be the nominal owner of the company. Moreover, in some countries, for admitting the fact of obtaining benefits through a third party, you can fall under the article of the criminal code.

Each businessman decides for himself whether he needs to use the nominal service or not. It is not necessary to use this tool to own a successful business in Georgia. The government of the country is trying its best to create a favorable environment for foreign nationals to do business.

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