Banking in the Caucasus: Azerbaijan, Armenia, Georgia

We are customarily used to reading a lot about European banks while  the Caucasian banking sector is relatively less explored, although it has quite substantial potential to offer to businesses of various sizes and directions. In this article we will explore offshore banking of three countries in the Caucasus: Azerbaijan, Armenia and Georgia, and will understand the opportunities it has to offer to residents and non-residents.

Offshore banking in the Caucasus: an introduction to the banking system of Azerbaijan 

Azerbaijan is a country with a population of 9.5 million. The national currency is manat (AZN). Exchange rate as of 07.06.2020 is 1 USD = 1,7 AZN.

The banking system is two-tier. It is governed by the Central Bank of Azerbaijan, which regulates the activities of 26 banks operating in the country:

3“International Bank of Azerbaijan” OJSC
4“Azerbaijan Industry Bank” OJSC
5“Azer Turk Bank” OJSC
6“Bank Eurasia” OJSC
7“Bank of Baku” OJSC
8Bank “BTB” OJSC
9“Bank Respublika” OJSC
10“Premium Bank” OJSC
11“Bank VTB (Azerbaijan)” OJSC
12“Expressbank” OJSC
13“Gunay Bank” OJSC
14“Xalq Bank” OJSC
15“Kapital Bank” OJSC
16“Bank Melli Iran” (Baku Branch)
17“Muganbank” OJSC
18“Nakhchivanbank” OJSC
19“Yelo” OJSC
20“National Bank of Pakistan” (Baku Branch)
21“Pasha Bank” OJSC
22“Rabitabank” OJSC
23“TuranBank” OJSC
24“Unibank” OJSC
25“Yapi Kredi Bank Azerbaijan” CJSC
26“Ziraat Bank Azerbaijan” OJSC

Of which:

  • 2 banks are with state participation (“International Bank of Azerbaijan” and “Azer Turk Bank”);
  • 24 are private banks, of which 12 are with fully foreign capital ( 7 –  with 50-100% foreign capital and 5 – with less than 50% foreign capital) and 2 more – local branches of foreign banks.

The leaders of the banking sector in Azerbaijan are:

  • International Bank of Azerbaijan (leader in deposit and loan portfolio, assets and capital);
  • Kapital Bank (2nd place in terms of same indicators);
  • Pasha Bank (3rd place in terms of same indicators);
  • Xalq Bank (4th place in terms of same indicators).

Financial results of the banking system as of 01.06.2020:

  • assets – 31 260.8 million manats; 
  • liabilities – 26 701, 3 million manats; 
  • capital – 4,559.4 million manats; 
  • loan portfolio – 14 361 million manats;
  • deposits of individuals – 7,551 million manats;
  • net profit for 5 months in 2020 – 314, 5 million manats.

Note!!! Since the beginning of the year, the banking system of Azerbaijan has shown a positive upward trend (incremental outcome): 01.2020 – 49.4 million manats, 02.2020 – 97.9 million manats, 03.2020 – 163 million manats, 04.2020 – 156.1 million manats, 05.2020 – 314.5 million manats.

Offshore banking in the Caucasus in Azerbaijan: affordable services

Non-residents and residents can use a wide range of banking services. In particular, individuals can:

  • receive payment cards by means of Visa, MasterCard, AmericanExpress, UnionPay systems;
  • open deposit (rates in manats up to 9% per annum, in USD – 0.1%) and current (multicurrency) accounts;
  • use online banking services;
  • obtain a loan;
  • make a transfer;
  • use the services of deposit boxes;

as well as other services.

Foreigners will not be able to take out a consumer loan or mortgage, but they will be eligible to receive a loan secured by a deposit.

A wide range of services is also available to legal entities: business loans, deposits, factoring, documentary operations, settlement and cash services and others.

Deposit insurance system of Azerbaijan

In Azerbaijan, deposits of both residents and non-residents are protected in full, providing interest rate on deposits do not exceed:

  • 10% in national currency;
  • 2.5% in foreign currency.
Personal accounts
Free selection

of personal bank accounts abroad for
persons depositing €5000+. Expert services
based on 7+ years of experience in banking.

of personal bank accounts abroad for persons depositing €5000+. Expert services based on 7+ years of experience in banking.

We’ll contact you in 10 minutes

Confidentiality and CRS in Azerbaijan banks

It is possible to explore offshore banking in Azerbaijan, but it should be noted that since 2018 the country has been a participant in the automatic exchange of tax information. At the same time, the level of confidentiality among Azerbaijani banks is quite high. Since quite a long time now there have been no adverse news in relation to information leaks from local financial institutions.

Features of Azerbaijani banks and offshore banking in the Caucasus

A non-resident looking to use the services of Azerbaijani banks should consider the following factors:

  • deposits are usually opened only in manats and US dollars;
  • current accounts can be opened in all popular currencies;
  • there are no minimum balance requirements;
  • interest on deposits is not taxed (until February 1, 2023);
  • bank websites and the banking software interfaces are available in Azerbaijani, English and Russian;
  • IBAN (international bank account number) is used.

Offshore banking in the Caucasus: an introduction to the banking system of Georgia

Georgia is a small country that neighbors Azerbaijan and Armenia. Its population is only 3.5 million people. The national currency of Georgia is lari (GEL), exchange rate is approximately 3.0532 GEL/1 USD.

The banking system of Georgia is also two-tier. It is governed by the National Bank of Georgia, which regulates the activities of 15 Georgian banks:

1JSC “TBC Bank”
2JSC “Bank of Georgia”
3JSC “Liberty Bank” (Former JSC “Peoples Bank of Georgia”);  (Former JSC “AgroIndustrial Bank”)
4JSC “Basisbank”
5JSC “VTB Bank – Georgia” (Former JSC “United Georgian Bank”)
6JSC “Cartu Bank”
7JSC “ProCredit Bank” (Former JSC “Microfinance Bank of Georgia”
8JSC “Silk Road Bank” (Former JSC “BTA Bank”, Former JSC “BTA Silk Road Bank”, JSC “Silk Road”)
9JSC “Ziraat Bank Georgia”
10JSC “Isbank Georgia ”
11JSC “TeraBank”
12JSC “Halyk Bank Georgia”
13JSC” PASHA Bank Georgia”
14JSC” FINCA Bank Georgia”
15JSC” Credo Bank”

Out of the entire list, only 1 bank has Georgian capital, all the other banks are with foreign capital participation. The state does not parrticipate in any Georgian bank’s capital, or management.

Two banks are in the leading position in the Georgian banking system: TBC Bank and Bank of Georgia. They together comprise approximately 80% of the banking sector market. They have the concentration of significant share of all deposits, loans, and they also generate the most net profit.

Learn more about the prospects and instruments for doing business in Georgia.

Offshore banking in the Caucasus: financial performance of Georgian banks

The Georgian banking system can boast high stability, liquidity and high level of capitalization. The last time it was 2 years ago since a Georgian bank has dropped out of the market. However, the coronavirus pandemic negatively affected the performance of local banks (as of 01.06.2020):

  • assets – 49 448, 9 million GEL;
  • liabilities – 44 321, 9 million GEL; 
  • equity – 5 127, 5 million GEL; 
  • loan portfolio – 34 865.4 million GEL; 
  • deposits of individuals – 1 5 921.7 million GEL; 
  • Loss for 5 months in 2020 – -613, 4 million GEL.

Attention!!! The banking system of Georgia is still loss-making, due to the huge level of loss declared in March 2020 in the amount of 943.13 million GEL, while in other months Georgian banks operated with profit: January – 96 million GEL, February – 100.03 million GEL; March – 943 13 million GEL., April – 80.3 million GEL, May – 53.35 million GEL.

Offshore banking in the Caucasus: affordable services from Georgian banks

Banks of Georgia provide a wide range of financial services for both residents and non-residents. Individuals may benefit from the following services:

  • open a personal multicurrency account (usually: lari / $ / EUR / pounds sterling);
  • deposit funds (annual rates: in lari up to 10.5%, in USD – up to 3.5%, in EUR – 1%, in GBP – 1.9%);
  • receive a payment card of the Visa, MasterCard, American Express systems;
  • use online banking systems;
  • obtain a loan (mortgage is also available to non-residents),
  • other standard banking services.

Georgian banks are also prepared to provide companies with a full range of banking services.

Attention!!! It is difficult for a non-resident to open a personal account in a bank in Georgia, since many Georgian banks may show reluctance to work with non-residents. It has been increasingly more challenging to open a corporate account for a company where the founders are non-residents. However, we are ready to provide our clients with these exclusive services.

Deposit insurance system in Georgia

In Georgia, deposits and funds on the current and card accounts of resident and non-resident individuals are insured within the limit of 15,000 GEL. It should be noted, however, that next year the government plans to adapt banking legislation to European standards and start insuring deposits of legal entities as well. 

Confidentiality in banks of Georgia

Offshore banking in the Caucasus – this is what Georgian banks are about. The country is not a member of the CRS nor does it plan to participate in the automatic exchange of financial information in the near future. Thanks to this, Georgian banks can ensure a high level of confidentiality of financial information.

Offshore banking in the Caucasus: features of Georgian banks

Georgian banks practically do not differ from their counterparts from Azerbaijan; their features include:

  • widespread use of multicurrency accounts;
  • lack of foreign exchange regulation;
  • no requirement to “freeze” the minimum account balances;
  • IBAN – the international bank account is used;
  • the interface of banking websites and banking programs is mainly available in English, rarely in Russian;
  • it is difficult yet possible to open accounts for non-residents;
  • non-residents can be eligible for getting a mortgage loan;
  • interest on deposits is subject to a 5% tax.

Offshore banking in the Caucasus: an introduction to the banking system of Armenia

Armenia is the smallest country in the Caucasus in terms of population. It is home to about 3 million people. The national currency of the country is the Armenian dram (AMD), the rate is 1 USD = 484.35 AMD. The banking system of Armenia, like that of the two other countries above, is two-tier. It is governed by the Central Bank of the Republic of Armenia. There are only 17 commercial banks in the country:

1«Ameriabank» CJSC
3«Ardshinbank» CJSC
6«ArmSwissBank» CJSC
7«Artsakhbank» CJSC
8«Byblos Bank Armenia» CJSC
9«Converse Bank» CJSC
11«HSBC Bank Armenia» CJSC
12«InecoBank» CJSC
13«Mellat Bank» CJSC
14«UniBank» OJSC
15«VTB Bank Armenia» CJSC
17«ID Bank» CJSC

In Armenia, almost half of the banks (8 of them) have Armenian capital, the rest have a different share of foreign capital. There are no commercial banks under government control or influence.

The largest banks in Armenia: 

Ameriabank, Ardshinbank, InecoBank, ArmSwissBank and ACBA – CREDIT AGRICOLE BANK. 

Yet, it should be noted that in Armenia there is no concentration of a large share of the banking market in any one bank.

Offshore banking in the Caucasus: financial performance of Armenian banks

As of June 1, 2020, Armenian banks recorded the following results:

  • assets – 5 926 635,5 million AMD;
  • liabilities – 5 054 737.0 million AMD;  
  • equity – 871,898.5 million AMD; 
  • deposit portfolio – 3 429 388 million AMD; 
  • loan portfolio – 3 812 851 million AMD.  

Offshore banking in the Caucasus: what types of services are provided by Armenian banks?

The entire range of banking services is presented in Armenian banks. Here individuals can:

  • open a current multicurrency account in all major currencies;
  • place free money on a deposit (rate in AMD – up to 10%, in USD – up to 4.5%, in EUR – up to 2.5%);
  • get payment card: Visa, MasterCard, Maestro, ArCa (national payment system);
  • obtain a loan, mortgage;
  • make an international transfer;
  • take advantage of the full range of remote banking tools.

Similarly, financial services for legal entities are fully available in the Armenian banks.

It should be noted that offshore banking in the Caucasus is well implemented in Armenia, since local banks do not set obstacles for non-residents and open accounts for them without any major hindrances.

Deposit insurance system in Armenia

The Deposit Guarantee Fund protects the deposits of individuals and entrepreneurs, both residents and non-residents, limited as follows:

  • for the national currency – 10 million AMD;
  • for foreign currency – 5 million AMD.

Confidentiality, CRS and Armenian banks

Banks of Armenia are responsible for keeping banking secrecy. In addition, the country is not a participant in the automatic exchange of financial information, which ensures an increased level of data confidentiality.

Specific characteristics of Armenian banks and offshore banking in the Caucasus

Armenian banks provide a wide range of services to both legal entities and individuals, residents and non-residents. The features of local banks include:

  • loyal attitude towards foreigners;
  • banks’ websites and interfaces are mostly available in Russian and English languages;
  • lack of obligation to have a deposit of a minimum balance on the account;
  • multicurrency accounts are opened in the most popular global and regional currencies;
  • interest on deposits is subject to a 10% tax;
  • bank accounts are in the international IBAN format.

Offshore banking in the Caucasus: comparison

The banking systems of Azerbaijan, Armenia and Georgia are practically comparable in all significant aspects. In all countries, the systems are two-tier and small number of banks operate in the market, most of which are foreign. Yet, there are a number of features in each country that you should pay attention to when looking for the most optimal offshore banking in the Caucasus:

Availability of state and foreign banksThere are 2 state banks, half of banks with foreign capitalThere are no state banks, almost half of banks with foreign capitalThere are no state banks, almost all banks with foreign capital (only 1 with Georgian)
Deposit ratesIn manats up to 9%, In USD – up to 0.1%In AMD – up to 10%, In USD – up to 4.5%, In EUR – up to 2.5%In GEL – up to 10.5%, In USD – up to 3.5%, In EUR – up to 1%, In GBP – up to 1, 9%
Taxation of % earning on depositsNoneYes, 10%Yes, 5%
Participate in CRSYesNo, and does not planNo, and does not plan
Availability of a deposit guarantee fundIn full scale, provided that the rate on deposit does not exceed 10% in AZN and 2.5 foreign- th currencyfor the national currency – 10 million AMD; for foreign currency – 5 million AMDup to 15 000 GEL 
Availability of banking servicesA wide range of services (most of all there is a choice of payment cards, but deposits are only in manats and USD)Full range of services A wide range of services (non-residents can get a mortgage)
Banking market concentrationThere are 5 large banksNot explicit2 banks comprise almost 80% of the market

Each of the above countries has everything necessary to provide quality services to non-residents. Nevertheless,  while in some of the countries access is easy and without any hindrances, in others – you need to specifically search and explore the banks which are ready and able to work with foreigners. If you are planning to start a business in either Armenia, Azerbaijan or Georgia, write to us at and we will select the jurisdiction that best suits your requirements.

What does a non-resident need to open a personal account?

To open a personal account for a non-resident in the banks of Azerbaijan, Armenia and Georgia, it is sufficient to have a foreign passport and fill out a client’s questionnaire. It should be noted that in absolutely all of the above countries, you can open a personal account remotely.

Which countries are CRS members?

Of the above countries, only Azerbaijan is a participant in the automatic exchange of financial information, Georgia and Armenia have not yet announced any plans to undersign the CRS.

In which country the deposit rates are the highest?

The highest rates of all the above countries are in Armenia, for example, here you can place a deposit in EUR at 2.5% per annum. But it should be noted that in Armenia all interest on deposits is subject to a 10% tax.

Need a consultation?

Please read other interesting articles at portal:

Please help us make the portal even more informative, up-to-date, and valuable for you and your business.

Your email address will not be published.