Fund administration is a multifaceted process involving the support of a fund's daily operations, financial accounting, asset valuation, and ensuring regulatory compliance. As Georgia's investment climate matures, professional fund administration has become critical for both local and international investors. Effective administration ensures transparency, builds investor trust, and significantly mitigates operational risks. This service is particularly vital for asset management companies that require an independent and qualified partner to manage internal fund processes efficiently, allowing them to focus on investment strategies.
What Does Fund Administration Cover?
Fund administration services encompass all technical and legal aspects necessary for the seamless functioning of an investment vehicle:
- Accounting and Financial Reporting: Recording all fund transactions in compliance with International Financial Reporting Standards (IFRS).
- Net Asset Value (NAV) Calculation: Periodic and accurate determination of the value of fund units, which is crucial for investor entry and exit.
- Regulatory Reporting: Preparation and submission of periodic reports to the National Bank of Georgia (NBG) and ensuring compliance with local mandates.
- Investor Registry Maintenance: Recording information about fund participants, processing subscriptions, redemptions, and managing distributions.
- Tax Compliance: Planning and declaring the fund's tax obligations in accordance with the Tax Code of Georgia.
- Audit Support: Coordinating the annual external audit process and preparing all necessary documentation for auditors.
Common Scenarios Requiring Fund Administration
Professional administration is essential in several scenarios: 1) When a new investment fund is established and the manager wishes to outsource operational functions; 2) When an existing fund expands, making asset valuation and tracking more complex; 3) When attracting international investors who demand an independent administrator for transparency and verification; 4) When the National Bank of Georgia tightens regulatory requirements, necessitating specialized expertise; 5) For funds with complex structures, such as those holding real estate or private equity, where precise accounting of diverse assets is required.
Georgian Legal Framework
Investment fund activities in Georgia are governed by several key legislative acts. Primarily, the Law of Georgia on Investment Funds defines the types of funds, their creation, and management rules. In the administration process, the Tax Code of Georgia is also vital, as it sets specific regimes for different fund types. Furthermore, sub-legislative acts issued by the National Bank of Georgia detail the reporting forms and deadlines. It is also important to note the Law of Georgia on Facilitating the Prevention of Money Laundering and Terrorism Financing, which mandates strict monitoring by administrators.
Step-by-Step Process
The service begins with an analysis of the fund's structure and investment policy. This is followed by the setup of accounting systems and the creation of a reporting model tailored to the fund's specific needs. The third stage involves managing daily operations: calculating NAV, validating transactions, and processing investor requests. Periodic regulatory reporting and tax consultations are conducted. In the final stage, annual financial statements are prepared, and cooperation with external auditors is managed to ensure a clean audit report.
Why Find a Specialist on Legal.ge?
Legal.ge features experienced lawyers and financial consultants with deep knowledge of Georgian investment legislation. Our platform allows you to connect with verified experts who will assist you at every stage of fund administration, ensure compliance with National Bank requirements, and protect you from legal and financial risks. Whether you are launching a new fund or optimizing an existing one, find your specialist on Legal.ge to ensure professional oversight of your investment activities.
Updated: ...