Georgia Country EOR for SaaS Companies: How to Hire Developers Without a Local Entity
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Georgia Country EOR for SaaS Companies: How to Hire Developers Without a Local Entity
An employer of record Georgia Country SaaS arrangement lets you hire developers in Georgia (the country) without opening a local company. The EOR becomes the legal employer. It signs Labour Code contracts, runs payroll, withholds the 20% personal income tax and pension contributions, and files with the Revenue Service. You direct the work and own the code.
Picture a Berlin SaaS startup that needs three backend engineers in Tbilisi before its next release. Opening an LLC means registration, a corporate bank account, payroll setup and monthly filings. An EOR can often have a signed developer working within 1-2 weeks of an accepted offer.
That speed matters most to teams testing a new market or a new hub. It also suits founders who are not yet sure Georgia will become a long term base. This guide covers how the model works, what Georgian law fixes in the contract, and where it beats or loses to other hiring routes.
What an Employer of Record Means for a SaaS Company
An employer of record is a Georgian entity that legally employs your developer on your behalf. Your company never appears on the employment contract. The EOR holds the payroll registration with rs.ge and carries the employer obligations under the Labour Code of Georgia.
The EOR Carries the Legal Employer Role
The EOR handles everything a Georgian employer must do by law. That typically includes:
Contracts drafted under the Labour Code, in Georgian or bilingual form
Payroll paid monthly in GEL to a local bank account
Withholding of the flat 20% personal income tax at source
Pension contributions at 2% from the employer and 2% from the employee
Termination handled under Georgian notice and severance rules
What Stays With Your SaaS Company
You keep full control of the product and the people building it. The developer joins your Slack, your sprint planning and your code review. You decide on:
Daily tasks, priorities and roadmap
Salary level and performance bonuses
Hiring decisions and team structure
Repository access and security policies
The EOR invoices you monthly for gross salary, employer costs and its service fee. Your finance team books one foreign supplier invoice instead of running Georgian payroll.
Why SaaS Teams Choose This Over Contractors
Many SaaS firms start by paying Georgian developers as contractors. That works for short projects. For a developer who works full days on your product for a year or more, a proper employment contract offers clearer IP assignment, paid leave and lower dispute risk. A broader talent management strategy usually moves core engineers onto employment once they become essential to the product.
How to Hire Remote Developers in Georgia Through an EOR
The Revenue Service expects employers to withhold income tax and pay it by the 15th of the following month. That single deadline shapes the whole EOR workflow. Payroll runs, filings and your monthly invoice all orbit around it.
From Signed Offer to First Payday
Most EOR onboarding follows the same sequence:
You select the candidate and agree salary and start date.
The EOR drafts the Labour Code contract and your IP terms.
The developer signs and provides ID and bank details.
The EOR registers the employee for payroll and pension.
The first salary is paid at month end, with tax filed by the 15th.
If you want a ready shortlist first, an IT staff augmentation partner can source candidates before the EOR contract stage.
Contract Terms Georgian Law Already Fixes
Some terms are not negotiable, so plan your offer around them. The Labour Code sets:
Annual leave of at least 24 working days, paid
Probation of up to 6 months
Standard working week of 40 hours
Written contracts for anything beyond short engagements
Your own policies can go above these minimums, never below.
Developers Who Are Not Physically in Georgia
An EOR in Georgia employs people who live and work in Georgia. If your developer is moving to Georgia from Russia, Ukraine or India, they typically become a Georgian tax resident after 183 days in any continuous 12 month period. Read the Georgia residency requirements for tax purposes before you finalise their start date, since residency status affects how their income is reported.
Outsourcing vs Outstaffing: Which Model Fits a SaaS Product Team
Factor | Outsourcing | Outstaffing via EOR |
Who manages daily work | Vendor's project manager | Your engineering lead |
Who the developer works for | Vendor, on many clients | Only your product |
How you pay | Fixed price or per milestone | Monthly salary plus fee |
Code ownership | Set by vendor contract | Assigned through EOR contract |
Knowledge retention | Leaves with the vendor | Stays inside your team |
Best fit | Defined, bounded projects | Core product development |
When Outsourcing Is the Better Call
An EOR is the wrong choice if you have no engineering manager to lead the developer. A first time founder with a non technical background often gets better results by outsourcing a defined MVP build. An agency brings its own architect, QA and delivery process.
Outsourcing also suits work with a clear end date. A three month payments integration or a mobile app rewrite rarely justifies a Georgian employment contract, a probation period and severance exposure.
Where EOR Sits Within Outsourcing and Outstaffing
Outstaffing is the broader category. Some outstaffing vendors employ the developer themselves and lease them to you, which keeps the person tied to the vendor. An EOR arrangement is cleaner. The developer is hired for your team specifically, and you can often move them to your own Georgian entity later.
That exit path matters for growth planning. A London SaaS company with eight Tbilisi engineers on EOR might open its own LLC in year two. It can then transfer staff without rehiring. The best employer of record services state transfer terms in writing from day one, so the move does not trigger a buyout fee.
Compliance, Payroll Tax and IP Ownership Under a Georgia EOR
Georgia taxes employment income at a flat 20% personal income tax. Your EOR withholds it from each developer's gross salary every month. The EOR also handles the funded pension system, where the employee and employer each contribute 2% and the state adds its own share. That is the payroll core. A SaaS company also has to think about two quieter risks: tax exposure abroad and code ownership.
Who Owns the Code Your Developers Write
Your developer signs an employment contract with the EOR, not with you. By default, rights to work created on the job sit with the employer, which is the EOR. Your service agreement must pass those rights on to your company.
A two-link chain closes the gap:
Employment contract assigns all work product from the developer to the EOR.
Service agreement assigns everything the EOR receives to your company, automatically and without extra payment.
Confidentiality terms cover source code, customer data and roadmap details in both documents.
A Berlin fintech learned this during due diligence for its Series A. Investors spent three weeks checking whether code from two Tbilisi engineers belonged to the startup. A single missing assignment clause delayed the round. Fixing the paperwork took a day. Finding the gap took the time.
Permanent Establishment Exposure in Georgia
A Georgian developer who writes code creates little tax risk for a foreign parent. A Georgian employee who negotiates and signs customer contracts for you is a different case. That activity can create a permanent establishment, which may make part of your profit taxable in Georgia.
Keep developer roles technical. Sales, pricing approval and contract signing should stay with staff outside Georgia. If you plan to hire a Tbilisi-based account executive, take local tax advice first.
What the Labour Code Requires
The Georgian Labour Code sets minimum terms your EOR must apply. These are the standards that shape a developer's contract:
Working week of 40 hours, with overtime paid at a higher rate.
Paid annual leave of 24 working days.
Probation of up to 6 months, agreed in writing.
Termination with notice and severance when the employer ends the contract.
These rules make EOR the wrong fit for one case. Say you want a developer for a two-month sprint with no long-term commitment. A service contract with a registered Individual Entrepreneur may suit you better than employment. Employment protections assume an ongoing relationship.
Onboarding a Developer Through a Georgia EOR, Step by Step
A typical first hire runs 10-15 business days from signed offer to first working day. Most of that time goes to contracts and payroll setup, not legal registration. Each step below has a clear owner.
Steps 1-3: Agreements and Offer
Define the role and package. You set the job title, gross monthly salary in GEL, start date and equipment budget. Agree on gross, not net, so the 20% income tax and pension contribution are clear from the start.
Sign the master service agreement. This one-time contract with the EOR covers fees, IP assignment, liability and transfer terms. Legal review usually takes 3-5 business days.
Issue the employment contract. The EOR drafts it under Georgian law, often bilingual in Georgian and English. The developer signs electronically within 1-2 business days.
Steps 4-6: Setup and First Payroll
Collect the developer's documents. The EOR needs an ID, a personal tax number and a Georgian bank account for salary. Georgian citizens usually have all three already.
Prepare equipment and access. You or the EOR ship a laptop, then you grant repository, cloud and SSO access. Plan this for the week before day one.
Run the first payroll. The EOR invoices you, pays the net salary and files withholding with the Revenue Service by the monthly deadline.
Where Delays Usually Happen
The legal steps rarely cause problems. Delays come from slow internal approvals and laptop shipping. Customs clearance for imported hardware can add several days. Buying the laptop locally through the EOR avoids that. A Warsaw SaaS company cut its onboarding time from 15 to 9 business days this way. For the full payroll cycle after onboarding, see our [payroll management services](https://www.gegidze.com/payroll-management-services-in-country-Georgia Country).
EOR vs Own Entity vs Contractor: The Real Cost Picture
Factor | EOR | Your own Georgian LLC | IE contractor |
Time to first hire | 10-15 business days | 4-8 weeks incl. bank account | 3-5 business days |
Upfront setup | Service agreement only | Registration, address, bank, accountant | None for you |
Ongoing overhead | Monthly fee per employee | Bookkeeping, filings, HR admin | Invoice processing |
Employer liability | EOR | Your LLC | None (service contract) |
Labour Code protections | Full | Full | None |
Misclassification risk | Low | Low | Moderate if full-time and controlled |
Usual break-even | 1-8 developers | 8-10+ developers | Short projects |
A Worked Payroll Example
Take a senior backend developer on a gross salary of 8,000 GEL (about 2,750 EUR) a month. The figures below use rates as of 2026. Confirm any change on rs.ge.
Employee pension (2%): 160 GEL, deducted before income tax.
Income tax (20%) on the remaining 7,840 GEL: 1,568 GEL.
Net salary paid: 6,272 GEL (about 2,150 EUR).
Employer pension (2%): 160 GEL, added on top of gross.
Your monthly cost is about 8,160 GEL, plus the EOR fee and any benefits. Georgia has no separate employer social tax beyond the pension contribution. That keeps the gap between gross salary and total cost narrow compared with most EU countries.
When Your Own Entity Becomes Cheaper
EOR fees grow in a straight line with headcount. Entity costs are mostly fixed. Somewhere around eight to ten developers, most SaaS companies find an LLC cheaper per head. The [comparison of EOR and setting up a local entity](https://www.gegidze.com/post/employer-of-record-vs-setting-up-a-local-entity-in-Georgia Country) walks through that decision in detail.
Do not move too early. An LLC needs a local accountant, monthly filings and a director who can respond to the Revenue Service. A team of three gains little from that overhead. If you do open an entity, IT companies that sell software abroad often apply for [Virtual Zone status](https://www.gegidze.com/virtual-zone-llc-services-in-Georgia Country). It removes profit tax on qualifying export income.
Frequently Asked Questions
Can a developer on EOR also bill us through their own 1% IE?
Not for the same work. If the developer is your employee through the EOR, that income is salary taxed at 20%. Paying part of it through an Individual Entrepreneur invoice to cut tax is a misclassification risk for both of you. A developer may keep a separate IE for unrelated clients, provided the activity truly differs.
What does it cost to end a developer's contract in Georgia?
The Labour Code has historically required the employer to give notice and pay severance, usually at least one month's salary. Shorter notice has meant higher severance. Confirm the current terms with your EOR before you make the decision. Budget for at least one extra month of gross salary in any termination plan.
Can we set salaries in USD or EUR?
You can agree on a salary benchmarked to USD or EUR. Payments between residents inside Georgia are generally made in GEL under National Bank of Georgia rules. Most EORs convert at the payment-date rate. Agree in writing who bears currency movement, especially for multi-year contracts.
Can we hire a foreign national who lives in Tbilisi through an EOR?
Often yes, but extra checks apply. Rules on residence and work authorization for foreigners working in Georgia have been tightening. Ask the EOR to confirm current requirements before you sign the offer. Add 1-3 weeks to your timeline for non-Georgian hires.
Can our EOR employees receive stock options in our parent company?
Yes, and many SaaS companies do this. The option plan stays between your parent company and the developer. The EOR may need to report the benefit as income when it is realized, so tell them about every grant. Without that, payroll filings can miss taxable income.
How do we switch EOR providers without disrupting the team?
The new EOR signs fresh employment contracts, and the old contracts end by mutual agreement. Done properly, the developer keeps salary and seniority, and no severance is triggered. Plan a full payroll cycle of overlap, about 4-6 weeks. Check your current agreement for exit notice periods first.
Does a developer's tax residency affect our costs?
Your payroll cost stays the same either way, because Georgian salary tax applies to work done in Georgia. Residency matters if the developer works from abroad for long periods. Someone who spends over 183 days outside Georgia may create tax obligations in another country. Read the Georgian tax residency guide and set a written remote-work policy.
