Alert: important development in recognition of trusts and foundations in Georgia for Chinese-resident clients

Effective: April 2027

Georgian regulatory practice has shifted materially in how it treats foreign trusts and foundations held by Chinese-resident clients — a development that directly affects succession structures, family wealth arrangements, and cross-border asset holdings organised through Georgian entities or accounts.

Until recently, Georgian authorities applied a relatively permissive approach to recognising trust and foundation structures established under foreign law, provided underlying assets were properly declared and the beneficial ownership chain was documented. Recent administrative guidance and emerging court practice have introduced a stricter disclosure and registration framework for such structures when the beneficial owner or settlor is a Chinese tax resident. Structures that were previously treated as transparent holding arrangements may now require formal registration or re-characterisation under Georgian civil law, which does not natively recognise the common-law trust concept.

Chinese-resident clients who hold Georgian bank accounts, real property, or company interests through a foreign trust or foundation should treat this development as requiring immediate review. The most directly affected arrangements are: discretionary trusts with Georgian assets or account relationships; foundations registered in low-disclosure jurisdictions used to hold Georgian real property; and structures where the beneficial owner holds Georgian tax residency concurrently with Chinese tax residency. Clients who have established Georgian tax residency as part of a relocation strategy face an additional compliance layer, as their Georgian-sourced and foreign-sourced income disclosures may now interact with the structure's recognition status.

Recommended steps:

• Review whether your trust or foundation structure has any Georgian nexus — bank accounts, real property, shareholdings in a Georgian entity, or a Georgian-resident trustee or director.
• Obtain a current-state legal opinion from Georgian-qualified counsel on whether the structure meets the updated disclosure and registration requirements.
• If re-characterisation or registration is required, assess the timeline: Georgian administrative procedures for recognising foreign structures can take several months, and acting before any tax audit cycle begins is advisable.

[CTA: Speak to our team — info@vetrovpartners.com | WhatsApp/Telegram: +7 (983) 510-38-76. Vetrov & Partners coordinates cross-border structuring matters with trusted Georgian-qualified counsel. Enquiries are handled in confidence.]

This alert is for informational purposes only and does not constitute legal advice. Vetrov & Partners is a Russian-qualified law firm. For matters governed by Georgian or other foreign law, we collaborate with trusted counsel in the relevant jurisdiction. Contact info@vetrovpartners.com for advice on your specific situation.

— Nino Beridze Contributing Regional Analyst — Georgia, Vetrov & Partners vetrovpartners.com/contributions/