PEO vs Employer of Record (EOR) in Georgia: Which is right for your organization?
- Natia Gabarashvili
- Oct 6
- 7 min read
Table of contents:
Introduction
Expanding into Georgia sounds exciting until you hit the wall of HR acronyms. PEO, EOR, co-employment, legal employer, the terms blur together fast.
Many companies assume they’re interchangeable, but in reality, the models solve very different problems.
Here’s the challenge: Georgia has a strong talent pool and competitive labor costs, but the hiring rules are complex.
Do you set up your own entity and work with a PEO, or do you skip the entity and hire through an EOR?
Choosing the wrong path can slow down market entry, expose you to compliance risk, or inflate costs.
This guide breaks down the differences and helps you decide which model actually fits your expansion into Georgia.
What is a PEO in Georgia?
When companies look at Georgia as a hiring destination, one of the first questions they run into is: how do we actually employ people? That’s where the Professional Employer Organization (PEO) model often enters the conversation. But before choosing it, you need to understand what it covers and, more importantly, what it doesn’t.
1. The Core Definition
A Professional Employer Organization (PEO) in Georgia is a service provider that helps you co-manage HR functions such as:
Running monthly payroll
Drafting compliant contracts
Administering benefits and leave
Maintaining employee records
Handling routine labor filings
Think of it as outsourcing your HR administration while you keep business control. But unlike an Employer of Record (EOR), a PEO does not become the legal employer.
Instead, the employment relationship remains directly between your company and your employees.
2. Entity Requirement in Georgia
Here’s the non-negotiable: you cannot use a PEO unless your company already has a registered LLC or branch office in Georgia. This includes:
Incorporating with the Georgian National Agency of Public Registry
Obtaining a local tax identification number
Setting up a bank account for salary payments
Registering under labor codes and social fund contributions
Only after completing these steps can a PEO step in to manage HR functions. In other words, a PEO makes HR easier, but it doesn’t solve the challenge of market entry.
3. Liability and compliance risk
Another area of confusion: compliance responsibility. With a PEO in Georgia:
The PEO can advise on labor law, payroll deductions, and reporting requirements.
But if there’s an inspection or dispute, your company carries the legal liability.
Non-compliance with Georgia’s labor code — such as missing social contributions or misclassifying employees can result in fines directed at your entity, not the PEO.
This is a sharp contrast to the EOR model, where the provider assumes the role of legal employer and therefore takes on direct liability.
4. When a PEO makes sense in Georgia
PEOs are most effective when:
You’ve already invested in setting up a subsidiary and don’t want to build a full in-house HR department.
Your headcount is growing, and you need scalable HR processes without hiring extra admin staff.
You want local expertise to ensure contracts and policies align with Georgian labor law and cultural expectations.
In short, a PEO is not an entry strategy; it’s an efficiency tool for companies already operating in Georgia.
What is an Employer of Record (EOR) in Georgia?
Georgia is quickly becoming a hotspot for global hiring thanks to its favorable tax policies, skilled workforce, and strategic location between Europe and Asia. Yet for foreign companies, the barrier has always been the same: setting up a legal entity is time-consuming, expensive, and full of regulatory complexity.
That’s where the Employer of Record (EOR) model offers a practical alternative.
1. The core definition
An Employer of Record (EOR) in Georgia is a third-party provider that officially becomes the legal employer of your local staff. In practice, the EOR takes responsibility for:
Drafting and issuing compliant employment contracts
Running payroll in Georgian Lari (GEL)
Withholding and paying income taxes and social contributions
Providing statutory benefits such as paid leave and pension payments
Filing compliance documents with the Georgian Revenue Service
Meanwhile, your company directs the actual work: project management, performance reviews, and day-to-day operations.
2. The advantage of no entity setup
Without an EOR, hiring in Georgia means registering a Limited Liability Company (LLC), opening a bank account, enrolling with the tax office, and appointing a local director. This process can take several months and requires ongoing compliance management.
With an EOR, you bypass that. You can hire employees in a matter of days through the EOR’s pre-established Georgian entity. This speed is especially critical in competitive industries such as IT and fintech, where losing weeks to bureaucracy can mean losing talent to competitors.
3. Who benefits most from an EOR?
EORs aren’t a one-size-fits-all solution — they shine in specific scenarios:
Pilot teams: When you want to test the Georgian market with 5–10 employees before committing to incorporation.
Fast market entry: For startups that can’t afford months of setup delay.
Distributed hiring: If you want to hire individuals in multiple regions of Georgia without worrying about state-level compliance variations.
Risk management: If you’re cautious about permanent establishment (PE) risk, EORs provide a compliant framework that protects you from tax exposure.
4. Why companies choose EOR in Georgia
According to regional HR consultancies, global businesses are increasingly turning to EOR solutions in Georgia because:
Time to hire is reduced by 70–80% compared to entity setup.
Compliance risk is transferred — the EOR, not the client company, is responsible for local labor law obligations.
Scalability is easier — companies can start small and only move to an entity once headcount or investment justifies it.
5. Key insight
Think of EOR as both a compliance shield and a speed lever. It’s not just about outsourcing HR admin, it’s about enabling global teams to act quickly while staying within the boundaries of Georgian law. For companies with lean teams or market-entry ambitions, it’s the only model that combines legality with agility.
Key differences between PEO vs EOR in Georgia
At a glance, PEOs and EORs both promise to “take HR off your plate.”
But under the surface, they solve very different problems, especially in Georgia, where compliance rules, tax obligations, and entity setup can quickly become roadblocks.
The table below highlights the core differences so you can see where each model fits.
PEO vs EOR in Georgia: Quick comparison
Category | Employer of Record (EOR) | Professional Employer Organization (PEO) |
Entity requirement | No local entity required; you hire through the EOR’s Georgian entity. | You must establish and maintain your own LLC or branch in Georgia. |
Legal employer | The EOR is the legal employer of record. | Your company remains the legal employer. |
Compliance liability | The EOR assumes responsibility for payroll, taxes, and labor law compliance. | Compliance remains with your entity; the PEO supports but doesn’t absorb risk. |
Speed to hire | 10–14 days; employees can start almost immediately. | 2–3 months, depending on entity registration, banking, and tax setup. |
Costs | Bundled per-employee monthly fee (covers payroll, benefits, filings). | Lower monthly fees but higher upfront costs for entity setup and ongoing admin. |
Scalability | Ideal for pilot teams, lean expansion, and market testing. | Works best for established companies scaling to 50–100+ employees. |
Immigration support | Limited but possible via EOR sponsorship. | Dependent on your entity’s capacity to sponsor work visas. |
Why these differences matter
If your goal is fast, compliant entry, EOR removes entity setup from the equation.
If you’re building large operations with a permanent base, a PEO becomes more practical after incorporation.
Compliance is the dealbreaker: with EOR, the liability sits with the provider; with PEO, it stays with you.
Pros and cons of EOR and PEO in Georgia
Deciding between a PEO and an EOR in Georgia isn’t about finding the “perfect” option — it’s about choosing the one that matches your goals, budget, and risk tolerance. Each model comes with trade-offs. Here’s a closer look.
Employer of Record (EOR)
Pros
Fast setup: Onboard employees in 10–14 days without waiting on registrations.
No local entity required: Skip the cost and admin of creating an LLC or branch in Georgia.
Compliance risk offloaded: The EOR carries responsibility for payroll, taxes, and labor filings.
Cons
Higher monthly cost per employee: Bundled fees include compliance and admin, which add up at larger headcounts.
Less efficient at scale: Once your team grows past 50–100 employees, running through an EOR may cost more than establishing your own entity.
Professional Employer Organization (PEO)
Pros
More control once the entity is set up: You own the employment relationship and filings.
Integration with in-house HR systems: PEOs can plug into your existing HR workflows for smoother day-to-day management.
Cons
Entity setup required: You can’t use a PEO without first registering a legal entity in Georgia.
Compliance risk remains with you: If tax authorities or labor inspectors find issues, your company is liable.
Slower to first hire: Entity setup, banking, and registrations can take months.
Which path should you choose, EOR or PEO?
The choice between an EOR and a PEO in Georgia isn’t about which model looks better on paper; it’s about which one fits your current stage and long-term plans. Both approaches can get you where you want to go, but the timing and trade-offs are different.
Choose EOR if…
You want to enter the market quickly. EORs can hire and onboard your first employee in under two weeks.
You’re not ready to set up a Georgian entity. Skip incorporation costs, banking, and tax registrations until you know the market works for you.
You’re starting lean. For teams under 20–30 employees, an EOR is often cheaper and far less risky than building a subsidiary from scratch.
Choose PEO if…
You already have a Georgian entity. A PEO won’t solve entry barriers — you need your own registered business first.
You’re planning to scale big. Once you’re hiring 50–100+ employees, running payroll through your own entity with PEO support can be more cost-efficient.
You want more direct control. With a PEO, you retain responsibility for compliance, giving you tighter oversight (but also more liability).
Conclusion
When it comes to global hiring in Georgia, PEO vs EOR isn’t about one being “better” than the other; it’s about which model lines up with your stage of growth, your risk tolerance, and how fast you want to move.
If you need speed and compliance coverage without the hassle of opening an LLC, an EOR is the clear choice.
If you already have an entity and want to streamline HR while scaling headcount, a PEO can keep you efficient.
The real win is choosing a model that doesn’t slow down your expansion.
Team Up helps companies hire compliantly in Georgia and across the Caucasus, Eastern Europe, and beyond.
Talk to us to see whether an EOR or a PEO is the right fit for your next market entry.
