Competition law and merger clearance in Georgia: what in-house counsel need to know

Unlike the European Union's ECON Regulation, which sets consolidated worldwide and EU-internal turnover thresholds that most multinationals track as a matter of course, Georgian merger notification rules operate on a different and less widely monitored framework. For in-house counsel managing acquisitions that touch the South Caucasus, this creates a concrete compliance risk: a transaction that does not trigger filing obligations in Brussels, London, or Frankfurt may nonetheless require clearance from the Georgian National Competition Agency before closing. Georgia's competition framework has matured considerably since the adoption of its Law on Competition, and enforcement has grown more deliberate. This guide sets out the five practical steps in-house counsel should follow when assessing whether a transaction involving Georgian assets or Georgian-market revenues requires merger clearance.

Before running the threshold analysis, gather the following information for every party to the transaction – acquirer, target, and each entity within their respective groups:

• Annual turnover generated in Georgia (gross revenues from Georgian customers or from goods and services delivered in Georgia), for the most recent completed financial year
• Total worldwide turnover for each group, same period
• The parties' combined and individual market shares in any product or service market in which both are active in Georgia
• A description of all Georgian-registered entities within each group, including minority shareholdings above ten per cent
• Details of any prior notification or clearance proceedings before the Georgian National Competition Agency involving the same parties

Georgian competition law assesses concentration at the level of the group, not the individual transacting entity. A foreign acquirer whose Georgian subsidiary generates modest turnover must nonetheless aggregate the turnover of its entire group when applying the thresholds. In-house counsel who perform this check only at the subsidiary level regularly underestimate the jurisdictional exposure.

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Georgian merger control legislation sets two alternative financial thresholds, both of which must be tested:

• Combined Georgian turnover threshold: the combined annual turnover of all parties to the concentration, generated in Georgia, exceeds a prescribed level.
• Individual Georgian turnover threshold: at least two of the parties each independently meet a lower prescribed Georgian-turnover figure.

Where either set of conditions is satisfied and the transaction constitutes a "concentration" within the meaning of Georgian competition law – broadly, an acquisition of control, a merger, or the creation of a full-function joint venture – a pre-closing notification obligation arises. The obligation applies regardless of whether the acquirer is a Georgian entity or a foreign company with no registered presence in Georgia, provided the jurisdictional turnover figures are met.

Note: Georgian competition legislation has been amended on several occasions, and the specific threshold figures are subject to revision by secondary regulation. Counsel should verify the current figures directly with the Georgian National Competition Agency or with qualified Georgian counsel before relying on any threshold published in secondary commentary.

The market-share overlay: even where the turnover thresholds are not met, the Georgian National Competition Agency retains jurisdiction to review concentrations where the parties' combined market share in a Georgian product or geographic market exceeds the level prescribed by regulation. For transactions in concentrated Georgian sectors – financial services, retail energy, telecoms infrastructure, and port logistics among them – a market-share analysis is prudent regardless of turnover.

Not every acquisition of shares or assets triggers a notification obligation. Georgian law requires that the transaction result in a "concentration" – typically defined as the acquisition or change of control over a business or a decisive influence over competitive behaviour.

Key control tests to apply:

• Does the acquirer obtain the ability to appoint or dismiss the board, or to exercise a veto over material commercial decisions?
• Does the transaction involve the acquisition of assets sufficient to constitute a business capable of operating independently in a market?
• Is the joint venture "full-function" – that is, does it operate on a lasting basis as an autonomous economic unit, rather than performing a specific ancillary function for its parents?

Intra-group restructurings – transfers of shares or assets between entities under common control – do not ordinarily constitute a concentration and do not trigger notification. However, the test for "common control" under Georgian law may differ in detail from the analysis familiar to counsel accustomed to EU or UK merger control. A reorganisation that is clearly exempt under EU rules should be tested independently against the Georgian definition before closing.

If the thresholds are met and the transaction constitutes a concentration, the parties must notify the Georgian National Competition Agency before completing the transaction. The key procedural steps are:

• Prepare the notification package. The notification form requires a description of the transaction structure, the parties' activities in Georgia and globally, market share data, and financial information. Supporting documents include constitutional documents, group structure charts, audited financial statements, and the principal transaction agreement (or a sufficiently detailed summary if the agreement is not yet finalised).
• Submit to the Georgian National Competition Agency. Notification is made to the Agency directly. There is no pre-notification consultation requirement analogous to the European Commission's state-of-play meetings, although informal engagement with the Agency before filing is possible and sometimes advisable in complex cases.
• Observe the standstill obligation. Georgian merger control is subject to a suspensory regime: the parties may not close the transaction until clearance is granted or the review period expires without a decision. Closing before clearance – gun-jumping – constitutes a violation and may attract fines.
• Phase I review. The standard review period runs from the date on which the Agency acknowledges a complete notification. For unproblematic transactions, clearance is typically granted within this Phase I window. Transactions raising competition concerns may be subject to an extended Phase II review or to conditional clearance requiring structural or behavioural remedies.
• Respond to information requests promptly. The review clock may pause if the Agency issues a formal request for additional information. Delays in responding extend the pre-closing period and can affect transaction timetables. Build information-request response capacity into the deal timeline from the outset.

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Georgian competition law does not formally distinguish between sectors, but in practice the Georgian National Competition Agency has applied closer scrutiny to concentrations in markets where the Georgian economy is structurally concentrated: banking and financial services, telecommunications, retail food distribution, fuel distribution and storage, and port and logistics infrastructure. Foreign investors acquiring businesses in these sectors should conduct a full market-definition exercise before the notification is filed, rather than relying on a high-level market description.

Regulated sectors carry a second layer: a merger clearance from the Georgian National Competition Agency does not substitute for any sector-specific licence transfer or regulatory consent required by Georgian banking, telecoms, or energy regulators. Both tracks must be managed in parallel. In-house counsel co-ordinating a regulated-sector acquisition should map all regulatory consents – competition clearance, licence transfer, foreign investment notification if applicable – and identify which, if any, can proceed in parallel and which are blocking.

A recurring question for in-house counsel managing global transactions is whether a foreign-to-foreign acquisition – a German group acquiring a Dutch target, neither of which has a Georgian subsidiary – can nonetheless trigger Georgian notification obligations. The answer depends on whether the transaction meets the Georgian turnover thresholds when group revenues from Georgian customers are included.

If the target's group derives revenues from selling goods or services into Georgia, those revenues are potentially counted toward the Georgian turnover figures even if the target has no locally registered entity. The same applies to the acquirer group. Counsel reviewing the jurisdictional analysis in complex multi-party or multi-market deals should include Georgia on the filing checklist when either party operates in the South Caucasus, even without a local corporate presence.

Cross-border structuring note for clients with Russian interests: for companies that have restructured operations through Georgian entities as part of broader regional or cross-border arrangements, the competition filing obligation interacts with the overall transaction structure. Whether the Georgian component requires standalone notification or is part of a wider multi-jurisdictional filing should be assessed early. Vetrov & Partners, working with qualified Georgian counsel, can support this analysis for clients where the transaction also involves Russian-law elements.

Failure to notify a notifiable concentration, or closing in breach of the standstill obligation, exposes the parties to sanctions under Georgian competition law. The Georgian National Competition Agency has authority to impose fines on the parties, to require divestiture of the acquired assets, and, in principle, to declare the transaction invalid.

Beyond the direct sanctions, unnotified concentrations create ongoing legal uncertainty for the acquirer: title to the acquired assets or shares may be challenged, and any contractual arrangements entered into as part of the transaction may be called into question if the concentration is subsequently found to have required clearance. For in-house counsel managing post-acquisition integration, an unresolved competition filing creates a contingent liability that will arise in subsequent due diligence processes, whether in refinancing, onward sale, or group restructuring.

Note: the Georgian National Competition Agency's enforcement posture has developed over time, and the frequency and scale of fines for gun-jumping may differ from the enforcement environment with which counsel are familiar in EU jurisdictions. This does not reduce the legal risk – it affects only the probability of detection. A compliance-oriented approach is to treat Georgian merger control as a binding obligation from the date thresholds are met, regardless of enforcement history.

• Establishing a company in Georgia: a step-by-step guide for foreign investors (/jurisdictions/georgia/company-formation/)
• Regulatory licensing and sector permits in Georgia: what foreign companies need to know (/jurisdictions/georgia/regulatory-licensing/)
• Tax structuring for foreign businesses in Georgia (/jurisdictions/georgia/tax/)
• Enforcement of foreign judgments and awards in Georgia (/jurisdictions/georgia/enforcement/)

Q: Do Georgian merger notification thresholds apply to a foreign-to-foreign transaction where neither party has a registered company in Georgia?

A: Yes, in principle. Georgian competition law assesses jurisdiction based on the revenues that the parties' groups generate from Georgian customers or from activities carried out in Georgia, not solely on the basis of registered presence. If the combined Georgian-market turnover of the groups meets the applicable threshold, a notification obligation may arise even in a transaction between two non-Georgian entities with no Georgian corporate footprint. Counsel should include Georgian-market revenues in the jurisdictional analysis for any cross-border transaction in which either party operates in the South Caucasus.

Q: How long does merger clearance in Georgia typically take, and how should in-house counsel factor this into a transaction timetable?

A: For transactions that raise no substantive competition concerns, Phase I clearance from the Georgian National Competition Agency is typically obtained within the standard statutory review period following acknowledgement of a complete notification. More complex transactions, or those in concentrated sectors such as banking, telecoms, or fuel distribution, may be subject to an extended review or conditional clearance. In practice, the most common source of delay is the information-request process: the review clock pauses when the Agency issues a formal request, and it restarts only when a complete response is received. In-house counsel should build a realistic information-request buffer into the signing-to-closing timeline – particularly for transactions in regulated sectors – and should ensure that the data-room preparation includes all information that the notification form is likely to require.

Q: What is the relationship between Georgian merger clearance and any sector-specific regulatory consent required for the same transaction?

A: Georgian merger clearance from the National Competition Agency is a competition-law proceeding only. It does not substitute for, and does not run in parallel with, any sector-specific regulatory consent required under Georgian banking law, telecommunications legislation, energy regulation, or other licensing frameworks. For a transaction in a regulated sector, both tracks – competition clearance and sector consent – must be managed separately, and either may be the critical path to closing depending on the sector and the specific transaction structure. In-house counsel should map all required Georgian consents at the outset of the transaction and identify which, if any, are legally blocking and which can proceed simultaneously.

Vetrov & Partners is a Russian boutique law firm established in 2009 and recognised by Pravo-300 for eight consecutive years. The firm advises foreign companies and investors on cross-border matters involving Russia and the broader post-Soviet region, working with qualified local counsel in each relevant jurisdiction.

For matters touching Georgia, the firm coordinates through a network of contributing regional analysts with direct Georgian practice experience. This guide was prepared with the support of Nino Beridze, Contributing Regional Analyst for Georgia, whose work covers business relocation, tax structuring, and regulatory compliance for foreign investors in the Georgian market.

The firm's Regulatory & Licensing practice advises inbound foreign clients on jurisdictional analysis, filing obligations, and regulatory strategy across the region. Enquiries: info@vetrovpartners.com | WhatsApp / Telegram: +7 (983) 510-38-76 | t.me/vitvetcom

This publication is provided for informational purposes only and does not constitute legal advice under Russian or any other applicable law. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Vetrov & Partners is a Russian-qualified law firm. For matters governed by foreign law or requiring local admission in another jurisdiction, we collaborate with trusted counsel in the relevant jurisdiction. For advice regarding your particular situation, please contact info@vetrovpartners.com.

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