A practical guide to charitable and philanthropic structures in Georgia under the Law on Entrepreneurs (2021)

Foreign families with assets in Georgia or planning to establish a philanthropic presence there face a structural question that has become materially more nuanced since Georgia's Law on Entrepreneurs came into force in 2021. The legislation did not merely consolidate prior corporate law — it introduced distinct treatment for non-entrepreneurial (non-commercial) legal entities, clarified the registration pathway for foundations and associations, and altered the governance requirements that determine whether a charitable structure operates within or outside the tax-privilege regime. For wealth advisers and family offices guiding clients with cross-border interests spanning Georgia, Russia, or other CIS-adjacent jurisdictions, understanding what the 2021 Law permits, requires, and prohibits is the necessary starting point for any philanthropic structuring exercise.

A structured checklist of initial considerations will save significant time during registration and governance design. Before engaging Georgian counsel, an adviser should confirm the following with the beneficial family:

• Purpose clarity: is the philanthropy oriented toward asset preservation and family legacy (foundation model), community benefit and public programmes (association or fund model), or both?
• Beneficiary scope: are beneficiaries primarily Georgian residents, or does the structure intend to make international grants?
• Governance preference: will family members hold board seats, or is a professional trustee or supervisory council model preferred?
• Source of funding: is the endowment seeded from Georgian-source assets, foreign transfers, or both — and have the currency control implications been reviewed?
• Tax residency of the founders: are the founding individuals Georgian tax residents, non-resident foreign nationals, or a combination?
• Operational horizon: is this intended as a perpetual vehicle or a time-limited project fund?

Confirming these six points before engaging Georgian registration counsel will determine which legal form is appropriate and which registration pathway applies under the 2021 Law.

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The Law on Entrepreneurs (2021) distinguishes sharply between entrepreneurial legal entities (partnerships, limited liability companies, joint-stock companies) and non-entrepreneurial legal entities. Charitable and philanthropic vehicles fall exclusively within the non-entrepreneurial category. Within that category, Georgian law recognises three principal forms relevant to philanthropic activity.

The first is the non-entrepreneurial (non-commercial) legal entity — the general statutory vehicle for organisations whose primary purpose is not profit distribution. This is the workhorse form for charities, foundations, and civil society organisations in Georgia. It may conduct ancillary commercial activity provided that any resulting profit is directed entirely toward the entity's stated non-commercial objectives. A critical feature introduced or clarified under the 2021 framework is that the founders retain no residual claim to distributed assets during the entity's lifetime; the governing charter must specify this irrevocability.

The second form — available within the broader non-entrepreneurial category — is the foundation structure, which is particularly suited to endowment-based philanthropy where a capital sum is set aside for defined purposes. Georgian law does not draw as rigid a distinction between "foundation" and "association" as some civil law systems do; the differentiation is primarily a function of the charter and governance documents rather than a separate statutory registration category.

The third relevant form is the cooperative, which is seldom used for purely philanthropic purposes but may be relevant where the philanthropic mission overlaps with mutual benefit among a defined membership — for example, cultural preservation cooperatives or social enterprise hybrids. For most wealth-structuring clients, this form will not be the primary option.

The practical consequence of this taxonomy is straightforward: foreign families wishing to establish a Georgian philanthropic vehicle will almost invariably register a non-entrepreneurial legal entity, with the charter tailored to reflect either a foundation-type (endowment-governed) or association-type (membership-governed, programme-driven) operating model.

Registration of a non-entrepreneurial legal entity in Georgia is administered through the National Agency of the Public Registry (NAPR). Under the 2021 Law framework, the registration procedure has been streamlined relative to prior practice, but several documentation requirements remain material for foreign founders.

The founding documents must include a charter (statute) setting out the entity's purposes, governance structure, the rights and obligations of founders and members, decision-making procedures, asset-disposition rules on liquidation, and the prohibition on profit distribution. The charter must be prepared in Georgian; certified translations from other languages are acceptable for submission alongside the Georgian original but the Georgian text governs.

For foreign national founders, identity documentation must be notarised and apostilled (for Hague Convention member states) or legalised through the relevant diplomatic channel. Georgia is a party to the Hague Convention, which simplifies this step for founders from most EU member states and a number of post-Soviet jurisdictions.

A registered address in Georgia is required. This may be a genuine operational address or a registered office address provided through a licensed Georgian service provider. For endowment-only foundations with no Georgian operational presence, a registered office arrangement is standard.

The NAPR registration process, once documents are submitted in proper form, typically completes within one to three business days for straightforward applications. More complex structures — particularly those involving foreign founder chains, multi-layered governance, or unusual asset-transfer provisions — may require additional review time or a preliminary legal opinion from Georgian counsel.

A state registration fee is payable; the amount is nominal by international standards and should be confirmed at the time of application as administrative fees are subject to periodic adjustment.

Governance design is where the 2021 Law has the most practical relevance for wealth-structuring purposes. The legislation requires non-entrepreneurial legal entities to have at minimum a management body — typically a board of directors or an executive director — responsible for day-to-day operations and legally binding decisions. For larger or more complex entities, a supervisory council (analogous to a supervisory board in civil law corporate structures) provides an additional governance layer with oversight functions.

For wealth-structuring clients, the governance architecture serves dual purposes: it must satisfy Georgian legal requirements, and it must reflect the family's control preferences. Several configurations merit consideration.

A founder-controlled board places family members directly in management and supervisory roles. This preserves operational influence but requires that board members be available to execute Georgian legal formalities — or that a power of attorney be granted to Georgian-resident counsel or a trusted local representative. The 2021 Law does not prohibit non-resident board members; however, practical operational continuity favours at least one Georgian-resident signatory on the management body.

A professional trustee model — where an independent Georgian fiduciary or law firm acts as executive director or holds a majority on the supervisory council — offers distance from day-to-day administration and may be preferable for families who prioritise discretion and wish to avoid direct public-registry visibility of beneficial family members. Georgian law requires disclosure of the management body in the NAPR register, but beneficial ownership disclosure obligations for non-entrepreneurial entities differ from those applicable to commercial entities; advisers should verify the current disclosure regime at the time of establishment.

A hybrid model — family members on the supervisory council, professional management on the executive body — is frequently the most workable structure for cross-border families and represents the approach most commonly recommended in recent Georgian practice.

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Under Georgian tax law, the tax treatment of a non-entrepreneurial legal entity depends on whether it holds recognised "public benefit organisation" (PBO) status. This status is granted by the Revenue Service of Georgia on application and is not automatic upon registration.

Organisations holding PBO status benefit from exemption from income tax on grants, donations, and membership fees received, provided those receipts are used for the stated charitable purposes. Ancillary commercial income — revenue generated from activities that are incidental to the charitable mission — is subject to income tax under the standard regime. Capital gains treatment and the tax consequences of endowment investment income should be analysed separately; Georgian tax law in this area continues to develop, and specific structuring decisions warrant a current tax opinion from Georgian tax counsel.

For foreign founders, an important practical point is that PBO status affects the tax deductibility of donations made to the entity by Georgian-resident donors. This may or may not be a material consideration depending on the family's donor base; for many endowment-funded philanthropic clients, the PBO status question is primarily a compliance and reputation point rather than a funding-model driver.

Entities without PBO status are subject to standard Georgian income tax on all receipts, including donations and grants, which makes this status broadly desirable for any genuinely philanthropic vehicle. The application process involves submission of documentation confirming the entity's purposes, governance structure, and compliance with the statutory criteria for public benefit activity; Georgian legal counsel should manage this application concurrently with or shortly after the NAPR registration.

Families with philanthropic interests in Georgia who also hold assets or residency connections in Russia, other CIS-adjacent jurisdictions, or the EU face several cross-border dimensions that require co-ordination between Georgian and other-jurisdiction counsel.

The primary structuring questions at the cross-border level concern the origin of endowment capital, the treatment of foreign-source grants and donations under Georgian law, and the interaction between Georgian and foreign tax residence rules for founding family members.

Regarding endowment capital: foreign currency transfers into Georgia for the purposes of founding or capitalising a non-entrepreneurial legal entity are generally permissible under Georgia's liberal currency regime. Georgia does not maintain the capital controls characteristic of several neighbouring jurisdictions, which is a material practical advantage for families funding a Georgian philanthropic vehicle from foreign-held assets. Transfers should be properly documented at both the sending and receiving end; for transfers originating from jurisdictions with their own reporting obligations — including Russia and most EU member states — compliance at the source jurisdiction should be confirmed before transfer.

Regarding cross-jurisdictional grant-making: a Georgian non-entrepreneurial legal entity may make grants to foreign organisations or individuals, subject to applicable Georgian foreign-exchange regulations and the provisions of its charter. If cross-border grant-making is a core function — for example, a family endowment supporting institutions in multiple countries — the charter should expressly authorise this activity, and the governance procedures for approving international grants should be explicitly designed.

Regarding the interaction with Russian law for families with Russian assets: foreign nationals of Russian origin establishing Georgian philanthropic structures should be aware that Russian currency control legislation may affect the permissibility and reporting obligations associated with transfers from Russian accounts or Russian-held assets to a Georgian vehicle. This is not a Georgian law question but a Russian law question that requires specific advice from Russian-qualified counsel before any cross-border transfer is executed. Vetrov & Partners advises on the Russian-law side of such structures and can coordinate with Georgian counsel on the overall architecture.

Q: Can a foreign national be the sole founder of a Georgian non-entrepreneurial legal entity under the 2021 Law?

A: Yes. Georgian law does not require a Georgian-national or Georgian-resident founder for non-entrepreneurial legal entities. A foreign national may be the sole founder, provided that the required registration documentation — including identity documents — is properly apostilled or legalised and the charter meets the statutory requirements. In practice, having at least one Georgian-resident representative with authority to act before the NAPR and other Georgian authorities simplifies ongoing administration materially.

Q: What documents are required to register a charitable foundation in Georgia?

A: The core registration package for a non-entrepreneurial legal entity in Georgia under the 2021 Law framework typically includes: the signed charter (in Georgian), the founding decision or minutes of the founding meeting, identity documents of the founders (apostilled or legalised for foreign nationals), confirmation of the registered address in Georgia, and the completed NAPR registration application with payment of the registration fee. Where the governance structure includes a supervisory council or professional management body, the appointment decisions and acceptance confirmations for those roles should also be included. Georgian counsel should compile and verify the package before submission.

Q: Does a Georgian charitable structure need to pay taxes on donations it receives?

A: Not automatically. A non-entrepreneurial legal entity that has obtained public benefit organisation (PBO) status from the Revenue Service of Georgia is exempt from income tax on donations, grants, and membership fees received and applied to its charitable purposes. An entity without PBO status is subject to standard Georgian income tax on all receipts, including donations. For most foreign-family philanthropic vehicles, obtaining PBO status is therefore a priority step in the post-registration phase. Ancillary commercial income remains taxable regardless of PBO status, and investment income treatment should be confirmed with Georgian tax counsel.

• [Asset Protection in Georgia: An Overview for Foreign Families](/jurisdictions/georgia/asset-protection/)
• [Private Wealth and Structuring Options in Georgia](/jurisdictions/georgia/private-wealth/)
• [Tax Residency and Relocation to Georgia: A Practical Guide](/jurisdictions/georgia/tax-residency/)

Vetrov & Partners is a Russian boutique law firm established in 2009, recognised by Pravo-300 for eight consecutive years and listed as a trusted adviser by the German Consulate General in Novosibirsk.

The firm's asset protection and cross-border structuring practice advises internationally mobile families and wealth advisers on multi-jurisdictional structures, with particular focus on Russia and the broader post-Soviet region. For Georgian-law matters, the firm works in close coordination with qualified Georgian counsel; Russian-law elements — including currency control, CFC reporting, and cross-border transfer structuring — are handled by the firm's own team.

We are a Russian-qualified law firm. For matters governed by Georgian or other foreign law, we collaborate with trusted counsel in the relevant jurisdiction.

Enquiries: info@vetrovpartners.com | WhatsApp / Telegram: +7 (983) 510-38-76 | t.me/vitvetcom

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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.

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