Georgia is one of the world’s oldest nations that adopted Christianity. It also has a long history of wine production, dating back over 8,000 years. The country is known for its hospitality and tradition of welcoming guests as a ‘gift of God’. Because of this, Georgia offers an open and supportive economic environment to new businesses.

Positioned at the crossroads of Europe and Asia, it opens the doors to a vast consumer market. It also benefits from the Middle Corridor route connecting China with the EU. The GDP growth has been quite steady over the last twenty years, growing at the average rate of 5.6% from 2003 – 2023. Tourism remains a key driver of economic growth in the country.

  • The GDP for 2024 is approximately USD 33 billion.
  • Primary exports include wine, hazelnuts, tea, copper ores, ferroalloys, medications, crude oil, mineral water, nitrogen fertilizers, etc.
  • As of 2024, the median age of Georgia’s population is 37 years.
  • The official language is Georgian (one of the world’s oldest languages), spoken by over 86% of the population. However, there are approximately 14 languages spoken in the country, including English, Russian, Assyrian, Svan, and Urum.
  • Georgia is amongst the top three countries in the World Bank’s Business Ready (B-READY) Ranking (2024).
  • As of 2022, the country’s literacy rate stands at 100%. 
  • About 63.6% of the population is of working age (15-64 years).
  • The local talent is quite skilled in the IT and technology sector, particularly in software development and related services.

The country welcomes new businesses offering a flat corporate tax rate (CIT) of 15%. Unlike many other countries, it’s not a progressive rate, which makes compliance quite simple. It’s also much lower than the global average of 23% – 25%.

Also, the country has many Free Trade Agreements with the EU, China, and CIS countries. Notable ones include Deep and Comprehensive Free Trade Area (DCFTA), the Free Trade Agreement (FTA) with the European Free Trade Association (EFTA), and trade agreements with CIS countries such as Armenia, Azerbaijan, Belarus, and Kazakhstan.

These FTAs have reduced tariffs and trade barriers, fostering economic cooperation. As a result, Georgia has expanded its export markets and attracted foreign investment, leading to its integration into the global economy. The government has also taken a keen interest in the progression of the English language, making it a mandatory part of the school curriculum.

So, language is not a barrier here, and you can find a skilled workforce with whom you can easily communicate. Georgia also has visa-free agreements with many countries, including those in the European Union, the United States, and others. These agreements make it easy for tourists, business travelers, and digital nomads to visit the country without obtaining a visa.

This policy has led to a significant rise in tourism. Just last year, Georgia had 5.79 million foreign visitors, a 4.1% increase year over year. Tourism revenue reached $3.6 billion.

Given its strategic location, business-friendly environment, and a skilled workforce, Georgia presents a number of opportunities for new businesses looking to expand in the region. The best way to do that without incurring HR expenses and workforce troubles is to hire independent contractors. How do you find and hire independent contractors in Georgia? Keep reading to know.

What Are Independent Contractors in Georgia?

Independent contractors are self-employed individuals or freelancers who provide services under a contractual arrangement. They are not considered the employees of the organization; they work independently on their own schedules.

Key Features of Independent Contractors in Georgia

Here are some of the key features that distinguish the contractors from employees in Georgia.

  • Do not receive any benefits like health insurance, pension contributions, or paid leave.
  • They operate under a service contract rather than having an employment agreement with the client.
  • Independent contractors have complete control over where, how, and when they complete their tasks.
  • They must register as individual entrepreneurs and pay their own taxes.

Key Differences Between Employees and Independent Contractors in Georgia

The classification of an employee and independent contractor goes beyond the label. It has legal, tax, and social security implications. Here is a comparison of the employees and independent contractors, and the features that set them apart in Georgia.

Legal Relationship

As per the Labor Code of Georgia, employees work under an Employment Contract with their employer, whereas the independent contractors were under a Service Contract or a Freelance Contract.

Autonomy

The employees have no autonomy over their work schedules, tasks, and place of working. The independent contractors, though, have complete control over how, when, and where they do the job.

Taxes and Benefits

The employer withholds the employees’ taxes and Social Security Contributions, but the independent contractors have to pay and file their own taxes. They also have to manage their pension contributions and are not given any statutory benefits (unless personally arranged). The employees, however, are entitled to paid leaves, pension insurance, and sick leave.

Termination

The independent contractor’s contract can end as per the terms of the agreement. They don’t have any legal protections in Georgia. The employees, however, are covered by the Georgian labor laws, which include protection against wrongful dismissal.

Expensive Misclassification Mistakes

In Georgia, misclassifying an independent contractor as an employee or vice versa can have severe implications. The employer may have to pay the unpaid income taxes, social security contributions, and penalties.

Then, the workers can sue the employer to claim their unpaid benefits, such as severance pay and other benefits, or in case of wrongful termination. The government may reclassify the workers and impose further penalties on the company.

How to Avoid Misclassification?

The key to avoiding the risks of misclassification is to ensure that you classify the workers as employees or independent contractors the right way. If your company controls their work schedule, gives them the tools, and supervises their work, they are better classified as employees. Similarly, when a worker operates independently, sets their own hours, and works with multiple clients, they are considered independent contractors.

Also, don’t undermine the importance of a clear written contract. The contract is your blueprint for the work structure, payment terms, and responsibilities of the worker, and it can be greatly helpful in classifying the employees and independent contractors.

Advantages of Hiring Independent Contractors in Georgia?

If you are looking for cost-effective solutions for hiring skilled talent in Georgia, the independent contractors offer a number of advantages.

Reduced Costs

Independent contractors pay their own taxes and social security benefits. They are also not liable for paid leave or other benefits, greatly reducing HR overhead costs.

Flexibility

Unlike a full-time workforce, which you must keep engaged all year, independent contractors can be hired as and when needed. They are ideal for meeting short-term demand and specific projects.

Also, their termination isn’t as regulated or formal as the regular employees. It’s a flexible and hassle-free solution for businesses entering the Georgian market.

Skilled Workforce

Georgia is a growing and thriving tech hub. It’s a prime destination for digital marketing, software development, and cybersecurity. So it’s easy to find tech professionals here, and most of them are fluent in English, Russian, and other languages, which makes it an ideal market for hiring talent.

Simplified Legal Compliance

To hire independent contractors, you don’t have to register as a local entity in Georgia. You can also hire the local workforce while operating remotely. So there’s little red tape to deal with. Then, independent contractors have simpler contracts compared to the Employment Contracts. They have a very few legal requirements.

Labor Laws in Georgia

The labor laws in Georgia are quite flexible. However, you must still comply with the Georgian Labor Code and tax regulations to avoid financial penalties and legal consequences.

  • The Contract Structures: The employees work under an Employment Contract, as per the Georgian Labor Law. The contract includes details about the statutory benefits for the employees.

    The independent contractors, on the other hand, work under a service contract, which is a civil law agreement. It gives them a lot more flexibility and freedom, but it doesn’t provide the employment benefits and protections.

  • Rights & Legal Protections: The employees are entitled to paid leave, sick leave, and severance pay. Whereas there are no such benefits for independent contractors.

    Also, the employer has to justify the reason for dismissing an employee, and this must be followed by a notice period. There is no such protection for independent contractors. Their contract can end as per the agreed terms.

  • Working Hours & Overtime: The standard working hours in Georgia are 40 hours a week or 8 hours a day. Time spent working above these hours may be considered overtime. Employees must be paid for these extra hours unless agreed otherwise. Also, the employees are entitled to an hour of unpaid break for each work day.

  • Minimum Salary: There’s no strict requirement to meet the minimum pay standard in Georgia (it also hasn’t been updated for a long time now). Today, the wage rates are determined by market forces and individual employment agreements.

    So there’s a fair pay system where the pay is negotiated for each setting and individual. These payments are made on a monthly basis.

  • Leave Policies: Employees are entitled to 24 days a year of paid annual leave, and many employers also provide sick leave. Then, 126 days of paid maternity leave is also allowed. In case of complications or multiple births, the employees may take up to 143 days.

  • Termination Laws: The notice period varies for the employees based on the reason of termination. If the employee is being terminated due to misconduct, no notice period has to be served.

    If the employee is dismissed for business-related reasons, they must serve a notice period of 30 days, and severance pay also applies. The severance pay is at least a month’s salary in case of unjust dismissal.

  • Contract Terms: Independent contractors negotiate the payment terms, deadline, and delivery schedules by themselves. There is no Labor Law protection for them, and all disputes are resolved under the Civil Law.

Taxes for Independent Contractors

Independent contractors pay their own income taxes, at 20% of their revenue in Georgia. If they are registered as individual entrepreneurs, they qualify for a 1% turnover tax. 

The client or company does not withhold their taxes, and the contractor must pay the taxes themselves. These payments will be made to the Revenue Service of Georgia, RS.GE.

Independent contractors can also register as individual entrepreneurs. If the annual revenue is less than 500,000 GEL or USD 180,000, they are qualified as small businesses and are liable to pay 1% tax on the turnover instead of the 20% income tax.

If their income exceeds 500,000 GEL for two consecutive years, the tax rate will increase to 3% of the turnover.

Value-Added Tax (VAT)

Independent contractors are also required to register for VAT if the annual revenue exceeds 100,000 GEL (USD 36,040). The standard VAT rate is 18%.

Social Security & Pension Contributions

Also, the independent contractors do not automatically become part of Georgia’s Pension Fund. They can, however, become a part of the scheme by making voluntary payments.

Payment Methods for Independent Contractors in Georgia

You can pay independent contractors in Georgia using multiple payment methods.

Bank Transfers

It is the most common method for paying independent contractors in Georgia. The banks in Georgia, such as TBC Bank, Bank of Georgia, and Liberty Bank, accept USD, EUR, and GEL currencies.

Online Platforms

Online payment platforms like Revolut, Wise, and Payoneer also work well in the Georgian market. Wise is widely used for making International transfers. The platform has a low fee and can support multiple currencies. Payoneer is also often used for international payments, but has high withdrawal fees.

Cryptocurrency Payments

Some independent contractors and freelancers accept crypto payments, like Bitcoins, Ethereum, and USDT, in lieu of their services. These are transferred to their accounts on platforms like Binance.

Top Independent Contractors Providers in the Georgia

The best way to find and hire talented individuals in Georgia is to approach the Independent Contractor Platforms. Here’s our list of the top five independent contractor providers in Georgia.

Remote People

Remote People homepage new

Remote People provides contractor hiring services in Georgia, enabling companies to engage local talent without establishing a legal entity.

The service covers contract compliance under Georgia labor regulations, management of tax obligations, and support for multi-currency payments such as AMD, EUR, and USD. Onboarding is streamlined, giving employers the assurance that payroll and legal requirements are fully managed.

Deel

Deel Homepage new

Another quite popular platform for hiring, managing, and paying independent contractors in Georgia is Deel. Deel looks after the compliance matters and provides complete services in over 150 countries.

It provides global payroll management, immigration and visa assistance, and global IT services. It houses over 250 experts to provide guidance and assistance to new businesses.

Globalization Partners

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Globalization Partners (G-P) operates in over 180 countries, providing PEO and EOR services. With G-P, you can hire the local Georgian workforce without setting up a local entity.

There’s integrated support on the platform, like tax compliance, payments, and support in multiple currencies. They also conduct background checks, offer visa support, global mobility, and payment support.

Velocity Global

Velocity Global Homepage new

Velocity Global operates in over 185 countries. It has a clear and transparent pricing model and offers HR support and hiring solutions so businesses can expand quickly. 

The key services include global EOR, payroll management, contractor management, and immigration support. It provides complete assistance in finding qualified contractors and managing the agreements with them. They ensure compliant onboarding support and payment processing.

Remote

Remote homepage

Remote is a global employment solution provider that provides services in over 82 countries. However, it has contractor management services in over 170 countries. The platform ensures you remain compliant with labor laws for hiring, onboarding, managing, and paying your workforce.

Expand and Succeed with Independent Contractors in Georgia

Whether you want to minimize the overheads or go with a flexible solution to hiring in Georgia, hiring independent contractors is the best way to start. By partnering with the independent contractor providers, you can allocate your time and resources to your business goals and let them do the hard work.

While you work on equipping yourself for the market, setting up your presence, and planning your business goals, the independent contractor providers will find you the best match for your business needs.

We at Remote People can help you find and connect with the right individuals just as per your requirements. Plus, you can get our services at 60% of the regular price, making things more cost-effective for you. Contact us today and let us handle the workforce for you so you can focus on the big picture.