Employer of Record or Your Own Georgian Company: How to Hire a Team in Georgia

A foreign business that wants people working in the country of Georgia has three routes. It can engage them as contractors, usually individual entrepreneurs who invoice it. It can use an employer of record, a Georgian company that employs the people on its own payroll and supplies their work under a service contract. Or it can register its own Georgian LLC and employ them itself. The third usually takes a few weeks and is the only one that gives you the employment relationship itself and access to the Virtual Zone and International Company tax statuses. For one or two people on a trial the light routes are usually right; for a team you intend to keep, the company usually is.

Three ways a foreign business can hire a team in Georgia

What an employer of record is under Georgian law

The Labour Code does not use the term employer of record, and we found no Georgian statute written for the arrangement. It is built from two ordinary contracts: an employment contract between the provider and the worker, and a service contract between the provider and you. The provider is the employer in law. It carries the Labour Code duties, withholds income tax and pension contributions, files the monthly return, and charges you its cost plus a fee per person. You direct the daily work. That works, and it leaves four things to the contracts.

• Rights in the work: under the Law on Copyright and Related Rights the economic rights in what an employee creates within their duties belong to the employer unless agreed otherwise, and here that is the provider. Your ownership rests on a written assignment from the provider and on its contract with each employee.
• Ending a role: the Labour Code requires a lawful ground and, in defined cases, notice and compensation. You can end the service contract by notice; the provider must still end the employment lawfully. Read who bears that cost.
• Foreign nationals: for a person without a permanent residence permit, the Law on Labour Migration has the local employer apply for the right to work, ties it to that employer and requires a written fixed-term contract. The applicant is the provider, the decision can take up to 30 calendar days, and a later move to your own company needs a new application.
• Proof: ask each month for evidence that the salaries were declared and the tax paid, and read the provider's own registry extract before you sign.

Contractors work until the relationship looks like employment

A contractor in Georgia is typically an individual entrepreneur, often on the 1% Small Business Status, who invoices you and files their own monthly declaration. The arrangement is sound when the person runs a business: several clients, their own tools and hours, a defined deliverable. It is fragile when it is employment under another name: one payer, fixed hours, your equipment, your management. A relationship reclassified as employment loses the 1% treatment for the periods concerned and raises the question of who should have run payroll. Since 1 March 2026 a foreign national without a permanent residence permit also needs a right-to-work authorisation to work in Georgia as a self-employed person. The Law, as amended in 2026, does not cover a foreigner who works for a non-resident in connection with that non-resident's activity outside Georgia, and the Government's rule narrows this for an individual entrepreneur who needs a residence permit to stay. Check each foreign contractor before the first invoice. Our articles on the 1% regime for developers and on hiring a first employee go deeper.

A team without an entity can create a permanent establishment

The Code counts the activity of a person authorised to act for you in Georgia, and management of your enterprise by someone acting in its name or interests for more than three months. A country manager fits that wording most closely. The Code also lists what does not count, including preparatory or auxiliary activity and a place used only to prepare or sign certain contracts in your name, so a sales role needs reading against the text. A developer writing code to a brief is further from it, but a whole team working for one foreign company from one office is harder to call auxiliary. Where a permanent establishment exists, the profit attributable to it is taxable in Georgia. Your home country asks a mirror question under its own law and any treaty; take advice on both sides.

What only your own Georgian company can do

• Hold the employment contracts: you choose, direct, promote and dismiss within the Labour Code.
• Own the work by default: the economic rights in what employees create within their duties belong to the employer, your company, unless the contract says otherwise.
• Apply for Virtual Zone status: for software developed in Georgia and sold abroad, exported IT income is exempt from profit tax and dividends are taxed at 5%. The status is granted on an application and the exemption is tested on substance.
• Test International Company status: for an established IT business with a track record, which may be the group's, that brings a real team and payroll. It means 5% on distributed profit and 5% income tax on salaries, and is granted by Government decree.
• Be the local employer for foreign hires, applying for their right to work in the company's own name. At the time of writing the Government's rule asks the employer for Revenue Service proof of turnover of at least GEL 50,000 a year per foreign applicant, except a company up to three months old with no more than three foreign employees.

The price is a company to run: a charter, a director, a registered address, monthly bookkeeping and payroll returns, annual statements and, if you leave, lawful terminations followed by a liquidation that takes months.

The headcount and time horizon at which your own company wins

An employer of record charges per person per month, so its cost grows with headcount and time: four people for two years is ninety-six monthly fees on top of the salaries. A company's running cost is mostly fixed and does not multiply with each hire. As a rule of thumb, not a rule of law: for one or two people and less than a year, use a provider or contractors. For three to five people, or any plan that runs beyond a year or two, register the company. For software built in Georgia for export, register the company at any headcount: the tax statuses are closed to you without it.

1. 1

   Order the parent's legalised documents first: its registry extract, its constitutional documents, and the decision to found the subsidiary and appoint its director, apostilled or legalised and translated into Georgian.

2. 2

   Register the LLC, confirm access to its Revenue Service profile and open the bank account.

3. 3

   Set up payroll before the first salary, and prepare written employment contracts that place the work product with the company.

4. 4

   Move each person on an agreed date: the provider's contract ends, the company's begins, and accrued leave and notice are settled in writing. For each foreign national, file the company's right-to-work application early enough to be decided before the switch.

5. 5

   Have the provider assign to you, in writing, everything created during its term, and only then end the service contract.

What this article does not answer

It does not tell you whether your people in Georgia create a permanent establishment under your home country's law, or how your home country taxes a Georgian subsidiary; those need advice on both sides. Direct employment by the foreign company with no Georgian entity is a fourth arrangement left out here: who files the employee's income tax, and whether the employee's desk becomes your taxable presence, should be settled before the first salary. We register Georgian subsidiaries for foreign parents, set up payroll and employment contracts, and assess Virtual Zone eligibility in writing. We do not act as an employer of record.