Drafting employment agreements in Georgia

The high positions that Georgia has in different business comfort ratings attract many foreign investors to this country. An increasing number of people from all around the world want to do business in Georgia. Evidently, workforce is required to carry out any sort of business operations. The employment agreement drafting service is popular with non-residents wanting to start a business here. Even if the company has only one employee – the Director – an employment contract has to be signed with this person anyway.  

We encourage you to use our employment agreement drafting services. Our lawyers have the necessary knowledge and experience that will let them draft a contract without violating any Georgian laws and simultaneously meeting all the requirements that you have. We will also be happy to provide legal support to your business company in Georgia and assist you in drafting other types of contracts, such as those for real estate or other property purchase, rent agreements, partner contracts, and so on.

Actually, our company provides the full spectrum of services related to doing business in Georgia. We can help you register a limited liability or a joint stock company in this country, or create a virtual legal entity, or register a business in a free economic zone, or open a bank account – personal or corporate – or do the accounting for you, or provide nominee service, etc.

The price of drafting an employment agreement is US$ 100.

Aspects of the Georgian employment and labor law

The Georgian employment legislation is based on the Labor Code. It allows employing individuals over sixteen years of age. Children above the age of fourteen can be employed only with the parents’ or custodians’ written permission.

The workplace relations between employers and employees are regulated by employment contracts in Georgia. These can be made verbally or in writing. A written contract is required if its duration exceeds three months.

The text of the contract must be understandable to all parties. This is why very often the Georgian contract text is accompanied by a translation into English or Russian. In every employment agreement, the following employment aspects have to be clearly indicated:

• The starting date of the employment;
• The working hours: the length of the working day and the time and the length of the lunch break;
• The employee’s position and the volume of work he or she is to do;
• The standard pay and the overtime pay;
• The days of the month when the salary payment is to be made and the payment methods;
• The number of weekly days off and the lengths of vacations;
• The necessary tools and materials to be provided to the employee by the employer so that the former can successfully perform his or her duties.

Same as in most other countries, the standard working week lasts for forty hours in Georgia. Saturdays and Sundays are days off. National holidays in Georgia (when nobody works) last for twelve days in total.

Employee taxes in Georgia

The Georgian legislation allows employing both residents and non-residents of the country. In accordance with the Tax Code, the employee has to pay a 20% income tax. It is to be paid both by Georgian citizens and by foreigners. The latter can avoid paying the income tax if they can supply a tax residency certificate from their home country and on the condition that Georgia has an agreement with this country for avoidance of double taxation.

Georgians as well as foreigners holding a permanent residence permit have to pay an additional 2% Pension Fund contribution. This new payment was introduced only recently, when the Pension Reform was launched on January 1, 2019. According to the new regulations, anybody who was younger than forty by August 6, 2018 has to pay 2% of their salaries to the Pension Fund. Additional payments to the Pension Fund are as follows:

• 2% of the salary — paid by the employer;
• 2% of the salary — paid by the state if the annual income does not exceed 24 000 lari, 1% if it does not exceed 60 000 lari, no payment by the state if the annual income exceeds the latter sum.

People over forty years of age are free to make their own decisions as to participating in the Pension Reform.

The standard rights and obligations of the parties making an employment agreement

There are no differences between the rights and obligations of Georgian citizens and those of foreigners. All workers must perform their duties to the best of their abilities without violating the labor order.

There is a statutory 0.07% a day fine levied upon the employer for delayed payment of wages. The employee is the person who it entitled to receiving the fine money.

In accordance with the agreement, the employer is to provide for all the necessary conditions for the employee to successfully perform his or her tasks. At the same time, before signing the contract the employer has the right to check the prospective candidate’s reputation using all sorts of databases.  

Termination of an employment agreement usually occurs when the expiration date comes or when the specified work has been completed. In addition to the standard ones, there exist the following reasons for employment contract termination:

• Poor economic conditions that force the employer to reduce the number of the personnel;
• Mutual agreement between the parties;
• A flagrant violation of the contract terms and conditions;
• Inaptitude to the position held;
• Bankruptcy of the employer company;
• A court order.

Documents required for employment in Georgia

The Georgian employment legislation is quite generous to foreigners: it contains no special requirements for them. The only thing is that it is beneficial to have a good command of English. The English language is rather popular in the contemporary Georgia especially among young people.

One more factor that contributes to the ease of obtaining employment in Georgia is the existence of agreements with 94 countries allowing their citizens to stay in Georgia for a whole year without a visa. All that is needed for making an employment agreement is the foreign passport and an application for the job.

To obtain a work permit for a longer period of time a foreigner has to submit the following documents to the Civil Service Development Agency:

• Application;
• Foreign passport;
• Two color photographs 3X4 centimeters in size;
• Employment agreement ;
• A D1 visa;
• Receipt for payment of the state duty. It costs 410 lari to obtain the receipt within 10 days, 330 lari to obtain it within 20 days, and 210 lari to obtain it within 30 days.

Advantages of employment in Georgia

After registering a business company in Georgia, every entrepreneur has to take on staff even if it is a single person – the Director who has the representative authority only.

The advantages of attracting workforce in Georgia are as follows:

• A small number of taxes;
• The possibility to save on income tax by employing foreign citizens;
• The possibility to appoint a Georgian citizen Director of the company. Doing so will make communication with the local supervisory or regulatory authorities easier. The same goes for contacts with the banks;
• No limitations for employment of foreign citizens;
• The possibility to work for a Georgian company remotely without having a residence permit;
• A stable and modern banking sector with a large number of banking services on offer including remote access to bank accounts;
• The possibility to transfer the wages to employees’ bank accounts either in Georgian lari or in a foreign currency (US dollars of euros);
• The fact that it is unnecessary to acquire work permits for short-term foreign employees from 94 countries;
• The high (26^th) position that Georgia holds in the freedom of labor rating.

The procedure of drafting an employment agreement in Georgia

Employment contract preparation service is among the most popular ones with business people from abroad. It is evident that after the company has been registered, there has to be at least one person to act as its representative.

Below are the steps you need to take in order to draft an employment agreement in Georgia:

1. Contact us via e-mail: [email protected].
2. Discuss the contract terms and conditions with our lawyer.
3. Cover the cost of our services. The price starts at US$ 100, and the ultimate price will depend upon the contract characteristics, the company sphere of business, the citizenship and the number of employees, and some other factors.
4. Finalize the details of the employment agreement.

Our company will provide for high quality support in drafting employment contracts as well as maximum protection of your interests. Our lawyers will draft an agreement that meets all your requirements and conforms to the Georgian legislation at the same time. If you are interested in this offer, or if you have any questions please contact us via e-mail: [email protected]. We will be happy to assist you.