ProximaEOR Logo
Knowledge Base & Legal Clarifications

Frequently Asked Questions

Clear, transparent, and direct legal answers for international enterprises seeking to establish a team or corporate presence in Georgia.

Employer of Record in Georgia

What is an Employer of Record in Georgia?

An Employer of Record (EOR) is a local legal entity that acts as the formal employer for your staff in Georgia for tax and compliance purposes. While your company directs the employee's daily work and technical supervision, the EOR assumes legal responsibility for the employment contract, payroll processing, and adherence to the Labor Code of Georgia. Learn more about our EOR services.

Can a foreign company hire in Georgia without establishing an LLC?

Yes. By utilizing an EOR service, foreign companies can legally hire full-time employees in Georgia without the cost, compliance risks, and administrative burden of registering and maintaining their own local corporate subsidiary.

Who is the legal employer when using an EOR?

ProximaEOR acts as the formal legal employer. We sign the formal employment agreement with the local candidate, assuming responsibility for statutory compliance, payroll, and tax remittance under Georgian jurisdiction, while your company retains full operational control over their work product.

How are employment contracts prepared?

Employment contracts are drafted bilingually (Georgian and English) to ensure full compliance with the Labor Code of Georgia. They explicitly cover mandatory statutory terms like working hours, leave entitlements, and permissible probation periods.

What are the risks of contractor misclassification?

Misclassifying a de facto full-time employee as an independent contractor can result in severe tax penalties and legal liabilities. If a contractor works fixed hours, uses your equipment, and operates under direct corporate subordination, Georgian authorities may legally reclassify them as an employee. Using a properly structured Employer of Record arrangement can help reduce worker misclassification risks, subject to the actual employment relationship and applicable law. Learn more about independent B2B arrangements.

How long does EOR onboarding typically take?

Standard onboarding typically takes 2 to 3 business days. This estimated timeline depends on the specific employment arrangement and the candidate promptly providing all necessary identification, tax documentation, and executing the requisite legal agreements.

Who manages payroll and taxes?

When acting as the EOR, ProximaEOR manages local payroll operations. We calculate and withhold personal income tax from the employee's gross salary and remit statutory pension/social contributions as required by law. Employer-side contributions (where applicable) are treated as employer/pass-through costs and billed accordingly.

How are paid leave and employee benefits handled?

We administer statutory leave according to local labor laws, which mandate at least 24 working days of paid annual leave, at least 15 calendar days of unpaid annual leave per year, and track local public holidays. Compensation for temporary incapacity for work (sick leave) is calculated based on specific statutory formulas.

How are employment terminations managed?

Terminations are executed in strict accordance with the Labor Code of Georgia. The EOR manages the statutory notice periods and mandatory severance calculations. Clients remain financially responsible for covering the required notice pay and statutory severance required to legally sever the employment relationship.

Who owns work-related intellectual property?

Subject to the final signed agreements, your company retains ownership. Our EOR employment agreements incorporate specific Intellectual Property (IP) assignment and Non-Disclosure Agreement (NDA) clauses designed to formally transfer work product rights to your foreign entity.

Remote Setup & PoA

Can I register a company in Georgia entirely remotely?

Yes. The Law of Georgia on Entrepreneurs permits 100% foreign ownership of an LLC, and the incorporation process can be executed remotely via a Power of Attorney (PoA). You must sign a bilingual PoA draft before a local notary in your country, have it apostilled (or legalized), and courier the physical hard copy to our office in Tbilisi. Learn more about our registration services.

Does a Georgian LLC require a local resident director?

No. Unlike many European jurisdictions, Georgian corporate law does not require a local resident director. A foreign citizen can be the sole shareholder and the sole director of a Georgian LLC simultaneously, while actively residing in another country.

Banking & FinTech

Can you open a traditional Georgian bank account for me remotely?

A standard Power of Attorney used for incorporation is generally insufficient to automatically open a corporate bank account. Top-tier Georgian banks mandate stringent AML/KYC procedures, typically requiring either a specific secondary corporate PoA or remote video verification with the foreign director. We assist with applications, but bank approval is never guaranteed.

What if a Georgian bank refuses my application?

A traditional local bank account is not a strict legal requirement to operate a Georgian company. The Revenue Service generally permits foreign entities to utilize international digital FinTech platforms (such as Wise or Payoneer) to conduct business, though onboarding remains subject to each provider's independent compliance policies.

Tax Regimes

Does every freelancer qualify for the 1% Small Business Status (SBS) Tax?

No. Georgian tax law explicitly prohibits certain professions from utilizing the 1% SBS regime. Consulting, legal, medical, and financial advisory services are strictly excluded and remain subject to the standard 20% flat income tax rate. Permissible activities (such as IT services) are taxed at 1% up to 500,000 GEL in gross annual turnover. If turnover exceeds this limit, the 3% rate applies to the relevant taxable income beginning from the start of the month in which the threshold was exceeded, through the end of the calendar year.

Is there a universal 0% Corporate Tax for an LLC?

No. Under Georgia's 'Estonian Model', only retained and reinvested corporate earnings are exempt from corporate profit tax (0%). Withdrawing profits as dividends triggers a 15% corporate profit tax (calculated on the grossed-up distribution) alongside a 5% dividend withholding tax. Read more about Georgian tax structures.

Pricing & Fees

What are your exact fees for setting up an LLC or an IE?

We offer transparent pricing for standard corporate setups:

  • Remote LLC Registration (620 USD): Includes PoA drafting, tax portal registration, and a physical legal address in Tbilisi for the first 12 months. (Government registry fees are billed separately).
  • Remote IE Registration (450 USD): Includes the complete registration process for an Individual Entrepreneur, plus formal Revenue Service submission for Small Business (1%) status. (Government registry fees are billed separately).

* Note: Bank account application assistance (180 USD) and ongoing monthly accounting services are billed separately. See our Pricing page.

If I pay for an initial consultation, is it deducted from the service fee?

Yes. Our standard introductory video consultation fee with a senior legal advisor is 50 USD. If you formally engage our firm for company registration or Employer of Record (EOR) services, this amount will be fully credited against your final invoice.