International groups including Greenpeace, Human Rights Watch, and Amnesty International have said that if the law is passed without changes it might force them to close their offices in Russia.
Putin's proposals would do away with a clause in the draft law that would require foreign NGOs to re-register as de facto Russian legal entities.
Instead, Putin proposed that they could operate through Russian branches and only inform authorities they exist.
Putin also said that criteria for registering Russian NGOs should be made clearer.
The president's proposals were sent to the State Duma which is due to consider the draft law in its second reading later this month.