Investing in Georgia: A Due Diligence Guide

Define the investment and your limits

Write an investment brief before viewing opportunities. State what you intend to buy, what return or use you seek, the expected holding period and how much cash you can commit. Identify the currency in which you judge your result and the amount of loss or delay you can absorb.

Distinguish the asset from the pitch. Buying shares is different from buying a company’s equipment or property. A loan with collateral is different from ownership. For an unfinished development, identify which rights exist today and which depend on future construction or approval.

Set conditions for proceeding. Examples include clear title, independently verified revenue, an acceptable contract and funding sufficient for an adverse scenario. Choose who can decide to stop. An attractive presentation should not make previously agreed conditions disappear.

Verify the seller, the asset and restrictions

Obtain current records for the exact property or business. NAPR provides registry information, including extracts and services concerning property rights, obligations, public-law restrictions and tax pledges or mortgages. Have a qualified independent adviser determine which records are relevant; a single document may not answer every question.

Match identifiers across the documents, contract and physical asset. Check the seller’s identity and authority, the owner named in the record, and any representative’s powers. For a company, ask about shareholders, directors, existing agreements and obligations. If you are buying shares, establish what liabilities remain in the company.

For property, check boundaries, access, registered use and whether the physical condition matches the paperwork. For a development, ask for the applicable approvals, delivery obligations and remedies. A registry entry does not replace technical inspection or verification of the construction plan.

Confirm land classification before committing. Agricultural land ownership is governed by a separate organic law with restrictions and specified exceptions affecting foreign ownership and some foreign-controlled entities. A building on a parcel does not remove the need to check the parcel’s legal category.

Do not use a suggested nominee or an informal arrangement as a shortcut around eligibility. Obtain a clear explanation of what rights you would actually have and whether the proposed structure is lawful.

Check the evidence behind the income story

Ask what proves the income: signed agreements, actual payment records, invoices, operating accounts and tax records where relevant. Identify the period covered. Separate historical receipts from forecasts, and distinguish gross revenue from money left after operating costs.

For a rental, examine the assumed occupancy, price, vacancy, management charges and maintenance. For an operating business, look at customer concentration, staff, suppliers, leases and the dependence on the current owner. Ask what revenue or contract access changes when ownership changes.

Compare the same measure across opportunities. An asking price is not a completed transaction, a projected yield is not realised cash flow, and a revenue figure is not profit. If the seller cannot explain the calculation, do not supply favourable assumptions on their behalf.

Keep an evidence log. For each important input, record the document, date, owner of the information and any gap. Label an unverified figure as unknown. It is better to recognise missing evidence than to hide it inside a precise-looking spreadsheet.

Count acquisition, ownership and exit costs

Start with the price, then add costs relevant to your transaction: independent legal and technical review, translations, registration, financing and currency conversion. Obtain dated quotations and state whether fees include all expected work or only an initial review.

Model the holding period separately. Include maintenance, repairs, insurance, management, utilities you bear, vacancy, staff or business administration where applicable. Ask a tax adviser about your particular income and transaction. Do not transplant another investor’s tax assumptions into your own calculation.

Add the exit. Consider selling costs, professional work, settlement, possible taxes, outstanding debt and carrying costs until completion. Include the cash you may need if a sale takes longer than planned.

Use a simple structure: net operating cash flow equals receipts minus operating costs and applicable taxes; deduct financing outflows for cash available to equity. Assess the final sale proceeds separately after debt and disposal costs. This is a planning method, not a prescribed accounting treatment.

Keep the base currency consistent. If receipts, debt and your personal spending are in different currencies, make the exposure visible rather than letting conversion assumptions hide it.

Test three scenarios and your funding capacity

Build a baseline, a favourable case and an adverse case. Change the assumptions that can hurt the result: weaker demand, lower receipts, higher costs, repairs, delayed completion or a longer exit. Explain why each change is plausible and which inputs remain uncertain.

Use the adverse case to test cash needs, not just a final percentage return. An asset can require additional funding long before it is sold. Ask whether you could meet commitments if payments stop for a period or expected refinancing is unavailable.

Use numbers only when their origin is visible. If you make an illustrative assumption, label it as yours and do not present it as a Georgian market forecast. Record the date, currency and sensitivity of each material input.

Define a stopping point for negotiations: a price ceiling, an unresolved title issue or a funding gap you cannot accept. Decide what evidence would change your view. A scenario exercise should inform the decision rather than simply produce a persuasive chart.

Control the contract, payment and exit

Ask independent counsel to explain the transaction sequence in plain language: conditions before payment, documents before transfer, completion, registration where relevant and what happens if a condition fails. Verify payment instructions independently using a trusted contact method.

For a deposit or advance, understand refund conditions, deadlines and remedies. Check who receives the money and how the arrangement relates to the asset. Do not infer protection from a familiar company name, an attractive office or an unsigned promise.

Discuss any shareholder arrangements, management contracts, occupancy agreements or financing alongside the purchase document. These may affect control, cash flow and the ability to sell. Understand consent requirements and obligations that survive the transaction.

Plan the exit before signing. Identify potential buyers, documents you must preserve and events that would trigger a review. Do not assume property ownership grants a residence permit or a passive investment authorises you to work; those have separate rules and assessments. If residence is part of your plan, check Article 15(j) of the current Law on the Legal Status of Aliens separately: it provides a short-term permit route for qualifying non-agricultural property with market value exceeding USD 150,000 equivalent in GEL, with the value established by a certified assessor accredited by the Georgian Accreditation Centre. This is an application route with separate conditions, not an automatic result of a purchase.

Your decision checklist