Independent contractors or freelancers are self-employed individuals who provide services to companies as a non-employee. This is one of the most common ways companies tend to hire non-local designers, engineers, support reps, etc.
For legal and tax purposes, independent contractors are not classified as employees. They may work for multiple clients, set their own work hours, negotiate their pay rate, and decide how a job gets done.
For example, the IRS says that if an independent contractor or freelancer does work that can be controlled (what will be done and how it will be done) by an employer then they are, in fact, classified as an employee.
As you can imagine, hiring someone as an independent contractor versus an employee is a fine line to tread.
While there are benefits when you choose the contractor route, there are quite a few drawbacks to consider and you’ll need to weigh them carefully to determine the best fit for your company.
A foreign subsidiary is a company that operates overseas as part of a larger company who’s HQ is in another country.
Establishing a foreign entity is great for having an international presence and accessing new markets. Though, setting up a subsidiary in Georgia can be expensive, stressful, and time-consuming. It's not for the faint of heart.
To set up a subsidiary in Georgia, you have to:
If you're lucky, this process can take months. If you're not so lucky, it can take up to a year. And on average, it costs about $50k-$80k, all-in-all, to get setup. And that's just for Georgia.
An employer-of-record (EOR) is a company that hires and pays an employee on behalf of another company.
An EOR is typically used to overcome the financial and regulatory hurdles that often come with employing remote workers.
Each country has its own payroll, employment, and work permit requirements for non-resident companies doing business in their jurisdiction. Meeting those demands can be a huge obstacle when it comes to hiring remotely.
At Panther, we help companies employ and pay people in over 160 countries, without having to set up a foreign subsidiary. Payroll, benefits, taxes, compliance, and more are all handled by us, at a fraction of the cost.
Outside of saving you months and tens of thousands of dollars, other advantages of using Panther are:
Because you no longer have to set up your own subsidiary, you’ll save a ton of time and tens of thousands of dollars using Panther.
Paying employees in Georgia is not the same as paying workers in your own country. Employees have to be paid using Georgia’s employment and payroll standards.
This means that you have to know, understand, and keep up with 1) fluctuating currency changes, and 2) local payroll and tax laws in the countries you’re looking to hire in.
Outside of the laws and regulations around payroll, there may be different conditions surrounding leave, overtime, termination, and more. As you can imagine, maintaining this kind of regulatory knowledge can be challenging. But it is crucial and necessary to follow local legislation.
After, you’ll have to determine the best way to pay your international employees. This can be done in a number of ways, including but not limited to:
One of the most challenging (and expensive) parts of paying international employees is setting up the infrastructure to do so.
Before you start to run payroll, you have to register your company as the local employer in the country the worker resides in. As you can see in the “Set up a subsidiary” section, this is a multi-step process that can take up to a year and put you on your way to bankruptcy.
Outside of EORs acting as the full admin employer, many also provide remote payroll.
For example, at Panther, in just 1-click, you’re able to pay your entire global team, anywhere in the world. We send you an invoice each month, charge you in US Dollars, and pay your employees the same amount in their local currency.
We factor in currency fluctuations and use the mid-market rate plus any applicable fee passed on by our provider at cost at the time of billing.
Full-time employment is considered 8 hours per day and 40 hours per week (48 in some specific sectors).
Overtime pay is given to employees who work more than 40 hours per week (48 in some specific sectors), but the amount of remuneration is determined by agreements between the employer and employee.
The salaries are paid on monthly basis. Paydays are usually at the end of the month unless agreed otherwise with the employer.
Not required by law.
After the employee has completed 11 months of continuous service, they are granted 24 days of annual paid vacation. Employees also receive vacation pay equal to their average salary 3 months prior to leave.
They are also allowed to take 15 days of unpaid leave days per year. To take unpaid leave an employee must provide 2 weeks’ notice.
Georgia has 17 public holidays.
Employees receive full paid leave for up to 30 days. To receive payment an employee must obtain a sickness certificate from an authorized physician.
Mothers are entitled 730 days of maternity leave. Employees receive 100% of their daily wage (up to a total of 1,000 Lari) for 183 days, and an additional 547 days of unpaid leave.
No specific laws.
Employees may take 2 weeks of unpaid leave annually to care for a child. This lasts until the child turns 5 years old.
In order to terminate an employee, an employer must provide a written statement and a notice period. The employer must also have justifiable grounds for termination.
Both the employer and employee must provide 30 days’ notice in case of termination.
Employees are granted at least one month’s salary within 30 calendar days after the termination of the labor agreement.
Probationary periods should be written in the contract and should not exceed 6 months.