KYC/AML expectations Western investors test for

Right at the end of a Western fundraise, after the term sheet is signed and the legal docs are drafted, the investor's operations team runs KYC (Know Your Customer) and AML (Anti-Money Laundering) checks before the wire goes out. For Georgian-incorporated companies, this is the single most common late-stage stall. The deal is done; the lawyers are happy; the money is parked in escrow; someone in operations is waiting for a document you don't realize you need.

This primer covers what they're actually checking, what they will ask for, and how to set up your Georgian entity now so the check takes hours instead of weeks.

What KYC/AML actually is

KYC is the investor's obligation to identify the legal entity they're sending money to and the natural persons who ultimately control it. AML is the related obligation to confirm that the money isn't being moved to facilitate proceeds of crime, terrorism financing, or sanctions evasion. FATF Recommendations — fatf

The fund doesn't do this because they're suspicious of you. They do it because their LPs, their bank, and the regulators of every jurisdiction they touch require them to. The fund manager who skips KYC loses their license; the bank that wires unverified money loses its correspondent relationships. The whole apparatus pushes the friction down to you.

What gets requested

Every fund's checklist looks slightly different, but the items below appear in 90% of them. Have them ready as PDFs in a single folder before you start a fundraise.

Entity documentation

• Certificate of incorporation / registration — from NAPR (napr.gov.ge). Georgian extract is fine; some funds want an apostilled English translation.
• Articles of incorporation / charter (განცხადება, წესდება) — the active version, not a draft.
• Good standing certificate — proving the entity is current on filings and not under dissolution. NAPR issues this on request.
• Tax registration — TIN from Revenue Service Georgia (rs.ge).
• Register of shareholders / cap table — current, signed by an authorized officer.

Beneficial ownership (UBO)

This is the harder half. Every individual who owns ≥25% (in some funds ≥10%) of the equity must be documented. The FATF threshold is 25%; the EU's AMLD6 pushes lower in some cases. FATF Recommendations — fatf

For each beneficial owner:

• Passport or national ID (some funds want both)
• Proof of address dated within 90 days (utility bill, bank statement, government letter)
• Source of funds declaration if they made the initial capital contribution
• A signed self-certification of tax residency

Georgian founders are often surprised that they are beneficial owners requiring this documentation. You are. Your spouse, if jointly holding shares, is. Your early investor at 30%, is.

AML screening

The fund runs each beneficial owner against sanctions lists (OFAC, EU, UN), politically-exposed-person (PEP) databases, and adverse-media searches. If anyone in your cap table appears on any of these lists, expect questions. Being a PEP isn't disqualifying but triggers enhanced due diligence — additional documentation, sometimes a phone interview.

Source-of-funds

For larger raises, the fund needs to understand where the company's prior money came from. Georgian grant programs (GITA, EU) are clean. Bank loans are clean. Founder savings are clean if documented. Cash from undocumented sources is not clean and will stop a wire.

How Georgia's infrastructure meets these requests

The Georgian regulatory environment is broadly FATF-aligned and improving. The National Bank of Georgia's AML/CFT framework follows international standards; the Public Registry is digital; tax records are accessible. National Bank of Georgia — AML guidance — nbg.gov.ge

Specific friction points US investors flag:

• Apostille of Georgian documents. Georgia is a Hague Apostille Convention signatory. NAPR documents can be apostilled at the Ministry of Justice. Plan 3–7 working days; do it before you need it.
• Notarized English translations. Some funds want sworn translations from a Georgian notary. Find a translator the notary already works with; this saves a week.
• Bank reference letters. Tier-1 Georgian banks (TBC, Bank of Georgia) will issue these on request. The letter should state account standing, account opening date, and authorized signatories.
• Beneficial-owner declarations. Have a template ready in English. The signature should be notarized; apostille if the receiving fund requests it.

What to do before you start a fundraise

Treat this as a 2-week project that happens before you send the first cold email to a fund.

1. Pull every entity document from NAPR. Save them as PDFs with English filenames.
2. Get apostilled English translations of the certificate of incorporation, charter, and most-recent extract. Even if a fund doesn't request them, you'll need them eventually.
3. Build a beneficial-owner folder for every person at ≥25%. Passport scan, proof of address, signed self-certification, source-of-funds note.
4. Run yourself through OFAC and EU sanctions lists. Free public databases. If anything matches anyone in your cap table, identify it now and prepare the explanation.
5. Document grant inflows. For every grant LocalCo received, save the award letter, disbursement records, and any reporting you filed back.
6. Open a Tier-1 bank account if you don't already have one. The first KYC question is "where's the money going?" and "into our crypto wallet" is the wrong answer.

What changes with a Delaware flip

A Delaware C-Corp is subject to FinCEN's Beneficial Ownership Information (BOI) reporting under the Corporate Transparency Act. Within 30 days of incorporation (90 days for entities formed pre-2024) you file BOI for every UBO. This is non-negotiable; failing to file is a federal offense. FinCEN — BOI reporting — fincen

The good news: once BOI is filed and the C-Corp is operational, US investor KYC on the entity is fast because the data is already in the system. The Georgian individual UBOs still need their own documentation, but the entity is a known quantity.

The Georgian-specific gap

The biggest pattern: a Georgian founder has all the right documents but they exist as paper certificates, handwritten Georgian-language notes, or PDFs in three different email threads. The KYC delay is almost always administrative — not regulatory.

The fix is mechanical. One folder. Everything PDF, English-named, apostilled where needed. Done before anyone asks.

Take this to your attorney

The paired one-pager has the questions to bring. AML/KYC work is one of the few areas where a Georgian attorney's local relationships (NAPR, banks, translators, notaries) save you real weeks. Use them.