Georgia has quietly become a serious talent market for international employers. Tbilisi alone now has 600+ technology companies and a software-development workforce that has roughly doubled since 2019. For European and American companies, the question is no longer whether to hire here — it is how to do it cleanly. There are three real options, and the right one depends on the size of the team and the time horizon.
Option 1: Hire as independent contractors
The simplest path for one or two roles. The Georgian individual registers as a small business entrepreneur (1% tax on turnover under GEL 500,000) or as an individual entrepreneur (standard 20% income tax), invoices the foreign company in USD or EUR, and the company pays from abroad.
Watch-outs:
- If the relationship has the substance of employment — fixed hours, integration into the foreign team, no independent client base — the Georgian Revenue Service can re-characterise. See our independent contractor glossary entry on the substance-over-form test.
- Contractors have no severance, leave, or social security protections under the Georgian Labor Code. That is fine for genuine contracting but creates retention issues at scale.
Option 2: Use an Employer of Record (EOR)
For 1-20 employees where the foreign company does not want to register a local entity, an EOR (Employer of Record) is the standard answer. The EOR is the legal employer in Georgia, handles payroll, taxes, and labour-law compliance, and invoices the foreign company for the burdened cost plus a fee.
Several global EORs operate in Georgia. For comparison of the major platforms, see our Deel comparison and the broader alternatives index. Pricing typically runs $400-$650 per employee per month on top of the actual employment cost.
Option 3: Register a Georgian entity
For teams above 15-20 people, or where the work involves Georgian customers, IP creation tied to the local entity, or eligibility for Virtual Zone Person (zero corporate tax on foreign-source IT income) or International Company status, registering a Georgian LLC becomes the right answer. Registration takes 1-2 business days through the National Agency of Public Registry.
Standard employment then runs under Georgian law — see the employment contract requirements, wage payment rules, and the severance rules under Articles 47-48.
The tax envelope
For a Georgian employee paid GEL 5,000/month gross:
- 20% personal income tax withheld
- 2% pension contribution withheld (employee share)
- 2% pension contribution paid by employer
- No social security contributions in the EU sense
The total employer cost is GEL 5,100 (2% pension), and the employee receives GEL 3,900 net. The HourSquare Georgia salary calculator handles bidirectional gross-to-net for any amount, including the higher-tax-rate scenarios for non-resident directors.
For broader context on the Caucasus tech labour market, the OECD Eurasia Competitiveness programme publishes regular labour-market briefs covering Georgia, Armenia, and Azerbaijan.