Georgia has long attracted international capital with its open investment environment and streamlined regulatory conditions. That environment is now changing. New foreign investment screening rules – introducing mandatory pre-transaction notifications for qualifying foreign investors – took effect in early 2025. Companies that proceed without notifying the designated authority risk having transactions suspended, voided, or subjected to enforcement action.
Georgia's investment legislation now requires foreign investors in designated sectors to submit a formal notification to the relevant state authority before completing an acquisition or establishing a qualifying presence. The obligation applies when an investor's direct or indirect ownership reaches or exceeds the prescribed threshold in a covered sector. Non-compliant transactions may be reviewed, conditioned, or unwound after the fact.
This alert covers who is affected, which sectors and thresholds trigger the obligation, the compliance deadline, and the immediate steps international companies should take now.
What changed – the regulatory development and effective date
Georgia's investment legislation was amended to introduce a structured foreign investment screening mechanism. The changes entered into force in the first quarter of 2025.
Before this amendment, foreign investors in Georgia operated under one of the region's most permissive investment regimes. There was no general pre-closing notification requirement for inbound foreign acquisitions. The new rules change that position directly.
The amendment establishes a notification-based screening system administered by a designated government authority. The authority has the power to review transactions, request additional disclosure, and – in defined circumstances – refer a transaction for further examination. Investors are not required to obtain advance approval in every case. However, the notification itself is mandatory and must be filed before the transaction closes.
The change aligns Georgia with a broader regional and global trend. A number of CIS and Eastern European jurisdictions have introduced similar mechanisms in recent years. For investors accustomed to Georgia's previously unrestricted entry conditions, the shift requires an immediate reassessment of deal timelines and documentation procedures. Failure to account for the notification window when structuring a transaction can delay closing by several weeks or longer.
Georgia's capital markets legislation and securities offering rules remain in place alongside the new screening obligation. A transaction that involves the issuance of securities. including an IPO, a prospectus-based placement. Alternatively. The establishment of an investment fund. may now trigger both the prospectus and disclosure obligations under securities legislation and the new notification requirement under investment screening rules. Both tracks must be managed in parallel.
Who is affected – threshold criteria and covered business categories
The notification obligation applies to foreign investors – including foreign legal entities, individuals, and beneficial owners – who acquire or increase ownership in Georgian companies or assets above prescribed thresholds.
The following categories are the primary focus of the screening regime:
- Acquisitions of ownership interests in companies operating in sectors designated as strategically significant – including energy, infrastructure, telecommunications, and financial services
- Transactions in which a foreign investor reaches or exceeds a qualifying ownership threshold – typically a minority stake sufficient to confer material influence or control
- Greenfield investments or joint ventures where the foreign party's contribution exceeds the value threshold set in the amended legislation
- Reorganisations, mergers, or asset transfers that result in a foreign person acquiring indirect control over a covered Georgian entity
Investors based in jurisdictions that Georgia has designated as presenting elevated review risk face additional scrutiny. This category is defined by reference to sanctions regimes, geopolitical considerations, and bilateral treaty status. Investors operating through intermediate holding structures – for instance, a fund domiciled in one jurisdiction but ultimately controlled from another – must assess beneficial ownership carefully. The screening authority looks through corporate structures to identify the ultimate foreign beneficiary.
The listing requirements and disclosure obligations relevant to securities offerings are a related but separate track. A foreign investor participating in an IPO or structured securities offering in Georgia must satisfy both the prospectus requirements under capital markets rules and the new screening notification if the resulting ownership interest meets the threshold criteria. Advisers should not treat these as mutually exclusive compliance streams.
For clients with exposure to Georgian banking and financial services assets, the interaction between banking regulation and the new screening rules adds further complexity. Our analysis of banking and finance legal services in Georgia addresses the regulatory overlay between financial sector licensing requirements and the investment screening mechanism.
To receive an expert assessment of how the new screening rules apply to your investment in Georgia, contact us at info@ferrazwhitmore.com.
What to do now – immediate actions and compliance timeline
International companies with existing or planned investments in Georgia should treat the following as priority actions.
Review your current Georgian holdings. Determine whether any existing ownership positions fall within a covered sector and at or above a qualifying threshold. The new rules do not apply retrospectively to completed transactions, but any planned increase in an existing stake. including through follow-on investment, exercise of options, or conversion of debt – may trigger the notification obligation.
Map your deal pipeline against the covered sectors and thresholds. For transactions in negotiation or due diligence, identify at the earliest stage whether the target operates in a designated sector. Build the notification window into the transaction timeline. Attempting to restructure around the obligation after heads of terms are signed creates delay and legal risk.
Assess beneficial ownership and holding structure. If investment is made through a fund, a special purpose vehicle, or a multi-layered holding chain, identify the ultimate foreign beneficiary now. The screening authority applies a look-through approach. Restructuring a holding chain after a notification issue is identified is costly and may not resolve the exposure.
Prepare notification documentation in advance. The notification process requires disclosure of the investor's identity, ownership structure, the nature of the transaction, and – in covered sectors – information about the investor's activities in other jurisdictions. Gathering this information takes time. Investors who have not assembled a compliance-ready documentation set will face delays at the filing stage.
Coordinate securities and investment screening compliance tracks. Where a transaction involves a securities offering, an investment fund structure. Alternatively. Any IPO-related placement, confirm that the prospectus and disclosure obligations under Georgian capital markets legislation are addressed alongside the screening notification. Treating these as separate, sequential processes creates gaps.
The practical window for filing and receiving confirmation before a closing date means that most transactions will require notification to be submitted at least several weeks before the planned completion date. For transactions in sensitive sectors, advisers should build in additional time to respond to any requests for supplemental information from the screening authority.
Our capital markets practice in Georgia covers the full range of regulatory compliance requirements for foreign investors, including interaction between investment screening, securities law, and cross-border transaction structuring. For a parallel perspective on enforcement trends in adjacent markets, our alert on investment screening developments in Russia provides useful regional context.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our team combines Portuguese civil law expertise with English common law tradition to deliver cross-border legal solutions in capital markets regulation, foreign investment compliance, and cross-border transaction structuring. We advise international investors, investment funds, and in-house legal teams on Georgian and broader CIS market entry, screening obligations, securities offering requirements, and disclosure compliance. The firm's CIS and Asia-Pacific practice includes practitioners with experience before regulatory authorities in Georgia, the wider South Caucasus region, and high-growth emerging markets. Engaging a lawyer in Georgia with regional and cross-border experience is essential when investment screening timelines interact with deal execution pressure. As an international law firm serving the Georgian market, Ferraz & Whitmore provides coordinated advice across the investment screening, capital markets, and banking regulatory tracks that now apply to foreign investors. To discuss how the new notification requirements apply to your transaction, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.