Employer of Record (EOR) vs setting up your own entity in Georgia: Which is better?

Introduction

You're expanding your company into Georgia. Exciting, right?

Let’s talk about leadership for a second. Not the LinkedIn-inspirational-post kind. The real kind, where you’re staring down a hiring roadmap in a country like Georgia, trying to figure out if you should go full-in with your own entity or play it smarter (read: safer) with an EOR.

And you know what? You’re not wrong to hesitate.

Because on one hand, building your own local entity feels like the “strategic” thing to do. It screams permanence. Control. Executive-level stability.

But it also screams months of legal setup, new tax filings, surprise payroll penalties, and yes, more local HR processes than your current team can probably stomach.

On the other hand, EORs let you move fast. Like, “hire senior engineers in Tbilisi by next Tuesday” fast.

But they raise real questions for people who actually care about culture, control, and long-term planning:

• Are you giving up too much oversight?

• What happens if you switch from EOR to entity later?

• Will your hires feel like second-tier employees?

These aren’t abstract concerns. They’re the kind of questions that keep CEOs, COOs, and Heads of HR on edge, especially when hiring remote teams in cost-effective markets like Georgia.

This article walks you through exactly what it looks like to build a full employment experience in Georgia without having to build an entire company from scratch.

If you’re weighing the EOR route vs going all in, this is your field manual.

Understanding Employer of Record (EOR) in Georgia

Let’s start with the basics.

An Employer of Record (EOR) in Georgia is a third-party company that legally employs your team on your behalf. They handle the paperwork, contracts, payroll, taxes, and compliance, so you can focus on scaling your business without setting up a local entity.

You still manage the day-to-day work, but the EOR carries the legal and administrative load.

If you want to hire fast in Georgia without navigating local bureaucracy, an EOR is the shortcut.

Why companies use an EOR in Georgia

1. Compliance management

Georgian labor laws are clear, but they still require accuracy and local expertise. An EOR ensures your hires are fully compliant, from social taxes to mandatory benefits, without you having to dig into the legal code.

2. Rapid market entry

You don’t need to register a company, wait weeks for approvals, or worry about paperwork. You can onboard employees in days, not months.

3. Talent pool access

Georgia’s tech and support talent is growing fast. Using an EOR helps you tap into this pool immediately, while others are still figuring out where to begin.

What’s the tradeoff?

The biggest downside? You don’t have full control. While the team works for you, the legal employer is the EOR. That can complicate things if you want to roll out custom contracts or long-term incentive plans.

Still, for many companies, that’s a small price to pay for the speed, flexibility, and low overhead. And if you're just testing the waters in Georgia, it’s often the safer bet.

Setting up your own entity in Georgia

Do you want full control? Then setting up your own legal entity in Georgia might sound like the right move. It’s a longer path, but for companies planning to build long-term operations, it can pay off.

Here’s what the process actually looks like.

Step-by-step: How to register a company in Georgia

1. Choose your legal structure — Most international companies choose an LLC.

2. Prepare documentation — This includes passports, director details, and a translated power of attorney (if applying remotely).

3. Register the company — You can do this in person or via a representative. Online options exist, but they often require local legal help.

4. Open a business bank account — Some banks ask for local proof of address or tax registration.

5. Register for taxes — Once set up, you’ll need to register with the Revenue Service and start filing VAT and income taxes.

For a more detailed breakdown, here’s how to open an LLC in Georgia.

Legal compliance: what you’ll need to manage

Once your entity is live, you’re responsible for all local obligations, employment contracts, tax payments, social contributions, and more. It’s not overly complicated, but it does require constant attention..

How long does it take?

Realistically, 2 to 4 weeks if you’re doing everything properly, and that’s assuming you don’t run into delays with banking, translations, or POA certifications. It’s manageable, but slower than hiring through an EOR.

Why do companies choose this path?

1. Direct operational control

You can set your own rules, structure employment contracts however you like, and make long-term decisions without going through a third party.

2. Potentially lower costs at scale

For larger teams or permanent operations, running payroll and HR in-house can become more cost-effective than paying per-employee EOR fees.

What’s the catch?

1. Regulatory compliance

Get one detail wrong, like missing a tax deadline or misclassifying a role, and you’re exposed to penalties. There’s no safety net like there is with an EOR.

2. Complexity and red tape

You’ll need local legal, accounting, and admin support to stay compliant. That means hiring or contracting professionals before you even hire your team.

3. Slower go-to-market

Even if things run smoothly, you’ll always be 3-4 weeks behind the EOR route. That can make a difference if you’re trying to move fast.

Setting up your own entity isn’t a bad idea. It just depends on your goals. If you’re ready to commit and want full control, go for it. But if speed, flexibility, and reduced liability matter more right now, EOR might still be the smarter first step.

Cost comparison: EOR vs own entity in Georgia (country)

Let’s talk money.

Because let’s be honest, your hiring decision in Georgia probably comes down to cost. You don’t want a bloated setup just to hire two engineers. But you also don’t want to pay a premium forever if you're building a team of 30.

Here’s how the numbers stack up.

What does an EOR cost in Georgia

Team Up charges €199 per employee/month for full EOR coverage in Georgia.

Here’s what the cost to use an EOR in Georgia includes:

• Legally employing the worker

• Payroll processing

• Payroll tax calculations and filings

• Salary disbursement

• Social contributions (pension, income tax)

• Compliance with Georgian labor laws

• Contracts, documentation, HR admin

Annual cost per employee: €199 × 12 = €2,388

No setup fees. No legal retainers. No mandatory add-ons. You only pay when someone is hired and active.

Let’s run the math.

Employees	Monthly Cost	Annual Cost
1	€199	€2,388
5	€995	€11,940
10	€1,990	€23,880
20	€3,980	€47,760

You stay lean. You get compliance built-in. And your team’s onboarded in days, not weeks.

What does it cost to set up and run your own entity?

Now let’s compare.

Setup fees (one-time):

• Company registration: €100

• Legal support + translations: €500–€1,000

• Power of attorney (for remote setup): €100–€200

• Bank account setup + tax registration: free to €100

Total setup cost: ~€700–€1,400

Ongoing administrative costs (per month):

• Accountant: €200

• Payroll processing (external or in-house): €75

• Legal review (occasional): ~€50

• HR time/admin: €100 (if you're doing it manually)

Total: ~€425/month regardless of team size

Add payroll taxes

Assuming a gross salary of €2,000/month:

• Employer pension: 2% = €40

• Income tax withholding: 20% = €400

• Total tax-related processing: €440

• You’re responsible for withholding, filing, and paying every month

So how does this play out at different team sizes?

Hiring 1 employee

Category	EOR	Own Entity
Setup cost	€0	€1,000 avg
Annual admin cost	€2,388	€5,100+
Time to hire	Days	3–4 weeks
Risk & liability	Low	High

Hiring 10 employees

Category	EOR	Own Entity
Setup cost	€0	€1,000 avg
Annual admin cost	€23,880	€5,100 + salary mgmt = ~€6,000–€7,000
Time to hire	Days	Weeks
Risk & liability	Low	High

Entity setup can get cheaper as you scale. But unless you’re running a full office with 20+ employees, the cost advantage is slim, and the time, complexity, and legal risk outweigh the savings.

TL;DR: Which one’s cheaper?

• Hiring <10 employees? EOR wins. It's cleaner, faster, and removes compliance checklist headaches.

• Hiring 20+ long-term? You might break even with your own entity—but only if you're ready to handle payroll, tax filings, and HR admin locally.

And if you mess up tax compliance? That savings disappears real fast.

Choose what’s worth more: control or clarity.

Talent acquisition & management in Georgia

You’re not expanding into Georgia for the weather, you’re here for the people. The developers, designers, support teams, and analysts. But how you access and manage that talent depends entirely on whether you use an EOR or set up your own entity.

Let’s unpack what changes when you choose one path over the other.

Accessing the talent pool in Georgia

Here’s the good news: the talent pool for employer of record services in Georgia is deep and growing.

Georgia’s workforce is young, tech-savvy, and multilingual. You’ll find strong candidates in development, customer success, finance, design, and marketing. But unless you’re plugged into the local hiring scene, you might miss them.

That’s where EOR services help. At Team Up, we don’t just onboard your hires; we help you find them through our vetted talent pool. No job boards. No ghosting. Just pre-qualified people ready to work.

Setting up your own entity means hiring from scratch: building local employer branding, sourcing, screening, and handling offer letters yourself. It’s doable, but slower.

How employer of record manage payroll taxes in Georgia

If you’re using an EOR, payroll taxes are off your plate. Literally.

Your EOR provider in Georgia calculates, withholds, and files everything on time:

• 20% personal income tax

• 2% employer pension contribution

• 2% employee pension (also deducted)

• Any special compliance reporting

You just approved the monthly summary and paid one invoice.

With your own entity, you’re responsible for managing payroll taxes directly or hiring a local accountant to do it. That includes staying updated on tax law changes, filing correctly with the Revenue Service, and ensuring all deductions are properly withheld.

Get it wrong, and you’re on the hook for penalties.

Hiring contractors: EOR vs direct contractor hiring in Georgia

Here’s where things get tricky.

Hiring independent contractors in Georgia sounds flexible, but it’s risky without proper classification. If your contractor looks and acts like a full-time employee, same hours, responsibilities, same reporting lines, the tax office might disagree.

Using an EOR? You skip this entire mess.

• Contractors can be transitioned to compliant employees

• You avoid misclassification

• You protect your company from fines, back taxes, or bans

Hiring direct contractors under your own entity means you carry the liability. You’ll need tight contracts, proof of independence, and ongoing review to ensure compliance.

Is the flexibility worth the legal risk? Only if you're sure you’re doing it right.

Compliance & legal risks in Georgia

Here’s the thing most companies learn too late: hiring someone is easy, until the tax office shows up.

Georgia is a business-friendly country, but it’s not a free-for-all. If you’re hiring without a local legal structure or without an Employer of Record (EOR), you’re opening the door to unnecessary risk.

The legal risks of hiring in Georgia without an Employer of Record

Let’s say you hire a remote Georgian worker and pay them as a contractor through your home country. Sounds simple, right?

Now imagine this:

• That worker files a local tax return and lists you as their employer.

• Georgia’s Revenue Service sees a foreign company making payments with no legal presence.

• You’re flagged for non-compliance: no tax registration, no social contributions, no employment contracts.

The result?

• Back taxes

• Penalties

• Potential bans from hiring in the country again

If you think that’s rare, it’s not. And the more visibility you gain (think local LinkedIn hiring or sponsored job posts), the more likely you are to get flagged.

That’s why so many companies use an EOR from the start.

Employer of Record vs PEO in Georgia

Let’s clear this up, because the terms get thrown around interchangeably.

• EOR (Employer of Record) becomes the full legal employer. They handle everything: contracts, payroll, taxes, compliance, benefits. You manage the work. They manage the legal risk.

• PEO (Professional Employer Organization) is a co-employment model. You still need to set up a local entity in Georgia. The PEO handles HR admin, but the legal liability stays with you.

So if you don’t have a local entity in Georgia, PEO is off the table. EOR is your only compliant option.

What benefits must an Employer of Record provide in Georgia?

At a minimum, the EOR must follow all Georgian labor laws. That includes:

• Paid vacation leave (usually 24 working days/year)

• Sick leave (partially reimbursed through social tax)

• Public holidays (17 official days)

• Pension contributions (2% employer + 2% employee + 2% state)

• Employment contract in Georgian (legally required)

These aren’t optional. If you're using an EOR, these are handled automatically.

If you're hiring directly through your own entity, you’re responsible for tracking and providing every single one and updating them as laws evolve.

Employee benefits & workplace setup for employees hired via employer of record in Georgia

Hiring someone isn’t only a signature on a contract; it’s what comes next. Do they get the right benefits? Do they have a proper setup to work from? Are you, as the employer, actually responsible for providing that laptop?

Let’s break it all down.

What benefits do employees get when using an Employer of Record in Georgia?

When you use an EOR, you’re not guessing what’s required; you’re covered.

Employee benefits when using Employer of Record services in Georgia include:

• Paid annual leave (minimum 24 working days per year)

• Sick leave coverage

• Paid public holidays (Georgia has 17)

• Pension contributions (2% from the employer, 2% from the employee, and 2% from the government)

• Legally compliant employment contract in Georgian

Team Up handles all of this, so you don’t have to worry about what’s mandatory, optional, or up for debate.

With your own entity? These benefits are still required. You’ll just need to manage them manually across payroll, contracts, and HR.

Workspace setup for Employer of Record employees

Do Employer of Record employees work remotely in Georgia?

Most of the time, yes. Especially in tech, support, and creative roles. Remote-first setups are common, and Georgia has the infrastructure to support it.

But what about workspace options?

With Team Up, you can choose:

• Fully remote (home-based)

• Shared coworking spaces (we partner with local hubs in Tbilisi and Batumi)

• Private office setups (for hybrid or team-based structures)

You decide what works for your team. We handle the admin.

Setting up your own entity means leasing space directly and managing everything from contracts to utilities. Not a dealbreaker, just more complexity.

Equipment policies for remote EOR employees in Georgia

Who provides the laptop? The headset? The second monitor?

Here’s how it usually works:

• Through an EOR, You decide if you want to provide equipment. We help manage the procurement, delivery, and policy documentation.

• With your own entity: You’re responsible for asset purchase, ownership, maintenance, and local delivery.

Whether it's a bring-your-own-device policy or full tech setup, equipment policies for employees hired via Employer of Record in Georgia are flexible, but they need to be clear.

If you don’t define ownership and support terms, you risk confusion later (especially if someone leaves or relocates).

We’ve built optional policies into our EOR onboarding process to keep this simple and compliant.

Making the right choice for your business

So, EOR or entity?

You’ve seen the costs. You understand the compliance risks. You know what it takes to manage payroll, benefits, equipment, and remote teams in Georgia.

Now it comes down to one thing: what’s your business actually trying to do here?

Use an EOR if...

• You need to hire fast

• You don’t want to deal with Georgian labor laws or payroll filings

• You’re testing the market or launching a small team

• You want someone else to handle compliance, contracts, and HR headaches

• You value flexibility over full control

For startups, scale-ups, or global companies running lean teams, EOR is the faster, safer move.

You get full operational control without the legal responsibility. And with Team Up, you're not just getting a payroll provider, you’re getting a local partner who knows how to navigate Georgia’s system inside and out.

Set up your own entity if...

• You’re building a long-term presence in Georgia

• You plan to hire 20+ employees and want to control every detail

• You have the legal and accounting resources to manage local compliance

• You’re okay with a slower, more complex setup phase

• You want your own name on the contracts

This route makes sense for bigger, permanent operations. It comes with more control, but also more responsibility.

Still unsure?

You don’t have to decide right now. In fact, many companies start with an EOR to hire their first 5–10 people, then transition to their own entity once they’ve validated the market and built local traction.

That way, you get speed without skipping steps.

And when you're ready to scale or make the shift, Team Up can help you transition smoothly, with no disruptions, no lost talent, and no legal gaps.

Georgia is open for business. The only question is: how do you want to enter?

Conclusion

There’s no universal “best” way to enter Georgia’s market.

There’s only the right move for where you are now, and where you're trying to go.

If speed, flexibility, and low risk matter most? Go with an EOR.

If control, permanence, and scale are your priorities? Build your own entity.

But whatever path you choose, don’t half-guess your way into a new country.

That’s how companies get stuck, paying penalties, losing talent, or redoing paperwork they didn’t need to file in the first place.

Team Up works with founders, HR leads, and ops teams who want to skip the confusion and get to hiring, legally, fast, and with a local partner who actually knows the rules.

So here’s your next step:

Talk to us.

Tell us what you're building.

We'll tell you what works.

And if you're not ready to hire yet?

You’ll still walk away smarter than when you clicked this article.