As Georgia continues to position itself as a business-friendly jurisdiction and a regional hub for investment and innovation, hiring foreign employees by local companies is becoming increasingly common. Georgian labor and immigration laws establish a clear, albeit straightforward, framework for employing foreign citizens.
This article outlines the key legal requirements for hiring foreign employees in Georgia. It covers visa and residence permit obligations. It also includes employment contract requirements and tax considerations.
Legal Framework and Equal Treatment Principle
The employment of foreign nationals in Georgia is governed by a combination of immigration, labor, and tax legislation. Under the Labor Code of Georgia (the Labor Code), foreign nationals are afforded the same labor rights and obligations. As Georgian citizens, unless otherwise provided by specific laws or international agreements.
This principle of equal treatment applies regardless of whether the foreign employee performs their work on the territory of Georgia. Or remotely from a foreign country under an employment relationship with a Georgian employer.
Thus, foreign employees benefit from equal protection in matters such as wages, working conditions, and termination rights. And access to dispute resolution mechanisms.
Immigration Requirements: Visas and Residence Permits
If the Georgian employer intends to employ a foreigner who will perform their obligations from the territory of Georgia. The following immigration requirements will apply to such employees:
Entry and Visa Regime
Georgia offers a liberal visa regime. Citizens of over 90 countries can enter and stay in Georgia for up to one year without a visa. However, if a foreign national intends to work and reside in Georgia for a permitted duration under the visa regime. They must secure a long-term immigration visa (D1 category visa) before entering the country, unless exempt by nationality.
Individuals arriving in Georgia for employment or commercial activities receive the D1 category visa. It typically serves as the basis for obtaining a residence permit.
Residence Permit for Employment
To lawfully work in Georgia for an extended period, foreign nationals must apply for a Residence Permit for Work Purposes. The residence permit can be issued for a term ranging from 6 months to 1 year, with the possibility of extension, and may ultimately lead to a long-term or permanent residence status. The application shall be submitted by the foreigner to the Public Service Development Agency (the SDA) either online or in person through the Public Service Halls. The key documents for obtaining a work residence permit include: (i) a valid passport copy; (ii) employment contract; (iii) proof of legal entry into Georgia; (iv) receipt confirming payment of the application fee.
The SDA typically reviews the application within 30 calendar days. However, expedited review options (10 or 20 days) are also available for an increased fee.
Employment Contract and Labor Rights
Georgian law does not impose any restrictions on the types of employment contracts that can be concluded with foreign nationals. The employment contract can be concluded in verbal or written form. However, it shall be taken into account that if the duration of the employment relationship exceeds 1 month, it is necessary to conclude an employment contract in writing.
Under the Labor Code, the employment agreement shall include the following essential terms:
- The identity of the parties;
- Position and job description of the employee;
- Commencement date and, if applicable, the term of employment;
- Working hours and rest periods;
- Remuneration and payment frequency, and
- Termination conditions and notice periods.
While there is no requirement that the contract be in the Georgian language, it is advisable to prepare bilingual agreements to ensure mutual understanding. In case of a legal dispute, the Georgian-language version may take precedence in court or administrative proceedings.
Registration of Employment with the Ministry of Health
Georgian employers are also required to register foreign nationals employed on the territory of Georgia with the electronic portal of the Ministry of Internally Displaced Persons from the Occupied Territories, Labour, Health and Social Affairs of Georgia (the MOH). This obligation arises under labor migration monitoring regulations and serves the purpose of tracking and analyzing employment trends involving foreign nationals in Georgia.
Georgian employers’ obligation to submit information through the MOH electronic portal only applies to foreign employees who: (i) are not citizens of Georgia; and (ii) physically perform work on the territory of Georgia under an employment agreement with a Georgian employer. In contrast, the MOH does not consider foreign nationals working remotely from abroad for Georgian employers as part of the labor migration system, so they are not subject to this registration requirement.
Furthermore, Georgian employers must update the MOH electronic portal each time there is any change to the employment conditions, such as:
- Modifications to salary, position, or working hours;
- Changes in the terms of the contract; or
- Termination of the employment agreement.
Failure to comply with this registration or to update the information in a timely manner may result in administrative liability for the employer.
Taxation and Social Contributions
Personal Income Tax
Foreign employees are subject to Georgia’s standard flat-rate personal income tax of 20% on employment income. Employers are responsible for withholding and remitting the tax to the Georgia Revenue Service on a monthly basis.
Pension Contributions
Georgia’s mandatory pension contribution scheme generally applies to: (i) Georgian citizens; (ii) foreign citizens with permanent residency in Georgia; and (iii) stateless persons residing in Georgia.
Thus, foreign nationals without permanent residency status are exempt from mandatory pension contributions. However, such employees may opt into the scheme voluntarily. Employers do not have to make pension contributions for exempt foreign employees unless they agree otherwise.
Double Taxation Treaties
Georgia has signed double taxation treaties (the DTTs) with numerous countries. These treaties aim to prevent both Georgia and the employee’s country of residence from taxing the same income. Where applicable, foreign nationals may benefit from tax exemptions or tax credits in accordance with the relevant treaty provisions.
Employers and employees are advised to review the specific DTT applicable to their jurisdiction and consider filing for tax residency certificates or treaty exemptions when needed.
In conclusion, Georgia offers a business-friendly and transparent legal environment for employing foreign nationals. By following the procedures outlined above, including securing appropriate immigration documentation, entering into compliant employment contracts, and fulfilling tax and registration obligations, employers can lawfully and efficiently integrate foreign talent into their operations.