In recent years, Georgia and Belarus have become increasingly attractive to entrepreneurs seeking to optimize taxation, improve business conditions, and expand their teams quickly. One of the most discussed questions is choosing between registering as an Individual Entrepreneur (Small Business) in Georgia and using the Employer of Record model in Belarus.

Both countries offer unique conditions for small and medium-sized businesses, yet they differ significantly in terms of structure, taxation, and legal processes. In this article, we compare these two formats and examine which advantages and limitations they offer to businesses seeking flexibility and growth.

For entrepreneurs planning international expansion, it is important to understand which operating model aligns best with their objectives. The choice between registering as an Individual Entrepreneur in Georgia and using the Employer of Record model in Belarus depends on numerous factors, from taxation to administrative complexity and hiring possibilities.

Let’s explore which option is more beneficial for startups, small companies, and international businesses, and how to evaluate which path may be more optimal for your growth.

Individual Entrepreneur in Georgia: Benefits and Key Features

Georgia is known for its business-friendly tax system and simplified administrative environment. The Individual Entrepreneur (Small Business) status is particularly suitable for small companies, startups, and freelancers who aim to minimize administrative costs and optimize taxation. However, like any business model, this format comes with both advantages and limitations that should be considered before making a decision.

How Registration Works for Individual Entrepreneurs in Georgia

The registration process in Georgia is one of the fastest and simplest in the CIS and Eastern Europe. To register as an Individual Entrepreneur in Georgia, you must complete the following steps:

Step 1: Prepare documentation.

Only a few documents are required: a passport, a registration application, and proof of residential address (if applicable).

Step 2: Tax registration.

Registering as an Individual Entrepreneur typically takes 1–2 business days. Applications can be submitted online through the Ministry of Finance portal or at the tax office in person.

Step 3: Open a bank account.

A bank account must be opened in a Georgian bank for business transactions. This also usually takes 1–2 days.

Georgia does not require minimum share capital or extensive accounting, and the entire process may be completed remotely — an advantage for foreign entrepreneurs.

Benefits for Small Businesses: Tax Preferences, Simplicity, Transparency

Georgia’s tax system provides multiple incentives for entrepreneurs:

Tax benefits:

Individual Entrepreneurs may apply special tax regimes such as simplified taxation (income tax rate of 1% or 5%, depending on the activity type). This makes operating in Georgia highly cost-efficient for small businesses.

Simplified registration:

As noted above, registration takes minimal time and documentation. No complicated bureaucracy is involved, which is ideal for startups and freelancers.

Transparency:

Georgia has invested heavily in improving its business environment. Transparent taxation, minimal regulatory barriers, and a streamlined administrative system make it one of the most convenient jurisdictions for business operations in Eastern Europe.

No minimum share capital:

Individual Entrepreneurs in Georgia are not required to contribute start-up capital, making this model ideal for small companies and early-stage startups with limited funding.

Is This Format Suitable for Startups and Small Companies?

The Individual Entrepreneur model in Georgia is ideal for small-scale operations that prioritize flexibility and low administrative involvement. It allows businesses to launch quickly and operate without registering a legal entity.

However, this structure is best suited for businesses that do not expect rapid scaling. As operations grow, revenue may exceed thresholds for simplified taxation, requiring the transition to a more complex tax structure or incorporation.

Limitations and Risks of the Individual Entrepreneur Model in Georgia

Despite major advantages, this format carries several risks and restrictions:

1. Income limitations.

There are revenue caps under simplified taxation. If earnings exceed these limits, the entrepreneur must switch to the general tax regime, increasing administrative work and reporting requirements.

2. Limited investment opportunities.

The Individual Entrepreneur form is not investment-friendly. Scaling operations or attracting large investors typically requires transitioning to a corporate structure such as a Limited Liability Company.

3. Personal liability.

An Individual Entrepreneur is personally responsible for business obligations, meaning debts may be recovered from personal assets. This increases financial risk for entrepreneurs in volatile markets.

4. No separation of business and personal assets.

Unlike legal entities, Individual Entrepreneurs cannot separate personal property from business assets, which may complicate risk management.

Employer of Record in Belarus: How It Works and Who It Is Designed For

The Employer of Record model in Belarus is an efficient solution for companies seeking rapid and compliant hiring without establishing a local legal entity. This approach enables both local and international companies to operate in Belarus while meeting statutory labor requirements with minimal administrative burden.

What Is Employer of Record and How It Functions in Belarus

Employer of Record is an outsourcing model in which a third-party provider assumes the legal and tax responsibilities of an employer. In Belarus, this provider formally hires employees on behalf of a client company and assigns them to work in the client’s project.

The Employer of Record provider manages all legal employment procedures, taxation, payroll, and reporting. Meanwhile, the client company maintains operational control over work processes and manages staff directly.

This model is ideal for companies wishing to enter the Belarusian market without forming a local entity, reducing risks and speeding up onboarding and market entry.

Advantages: Simplified Operations, Reduced Admin Burden, Flexible Hiring

The Employer of Record model offers one of the most streamlined paths to employment and market entry in Belarus:

Minimization of administrative workload:

The Employer of Record provider handles payroll, contracts, HR documentation, taxation, and compliance. The client can focus on operations instead of bureaucracy.

Hiring flexibility:

Employers can hire specialists quickly without registering a Belarusian entity. This model is especially beneficial for startups and technology companies building remote or hybrid teams.

Faster market entry:

No incorporation or setup phase is required — companies can launch operations and hire talent significantly faster.

Why Employer of Record Works Well for International Companies and Tech Projects

For foreign companies entering the Belarusian market, Employer of Record offers major advantages:

1. No need to create a legal entity — saves time and financial resources.

2. Full compliance with local labor requirements — reduces regulatory risk.

3. Flexible workforce expansion — hire or scale teams up or down rapidly.

For startups and technology projects, Employer of Record is particularly effective because it reduces administrative overhead and allows teams to grow or adjust quickly without legal complexity.

This enables founders to stay focused on product and business development rather than regulatory procedures.

Potential Risks and Limitations of Using Employer of Record in Belarus

Despite numerous advantages, the Employer of Record model in Belarus also comes with certain limitations that must be considered:

1. Limited autonomy: although the business retains full control over operational workflows, all legal and employment matters are handled through the Employer of Record provider. This may restrict independence in situations requiring direct legal decision-making.

2. Dependency on the provider: the company becomes dependent on the Employer of Record provider, which introduces risk in the event of errors or delays in fulfilling contractual obligations. Therefore, selecting a reliable provider with verified experience is essential.

3. Additional expenses: while the Employer of Record model streamlines business processes, it may be more costly than registering a local legal entity, especially for large teams or long-term projects.

4. Limitations on employee types: Employer of Record works well for full-time and long-term employees, but may be less flexible for freelancers or workers with non-standard schedules, unless such arrangements are specifically included in the Employer of Record agreement.

Comparison: Individual Entrepreneur in Georgia vs Employer of Record in Belarus

In this section, we review the main differences between registering as an Individual Entrepreneur in Georgia and using the Employer of Record model in Belarus. Both options are convenient for business operations but differ across several core factors: taxation, registration process, administrative workload, flexibility, and cost structure.

Taxation: How Tax Regimes Differ for Individual Entrepreneurs in Georgia vs Employer of Record Clients in Belarus

Taxation is one of the main criteria influencing the choice between the two jurisdictions.

Individual Entrepreneurs in Georgia benefit from reduced tax rates. Depending on the activity type, the income tax rate may be 1% or 5%, and simplified tax regimes are available to reduce overall expenses. These conditions make Georgia particularly attractive for small companies and startups.

Clients operating through an Employer of Record structure in Belarus fall under the standard taxation system, which may include corporate income tax, value-added tax (for certain activity types), and social contributions. However, for Employer of Record clients offering export services, corporate income tax may be reduced to 0% (for High-Tech Park residents), which is highly advantageous for technology-based and export-oriented IT companies.
The Belarusian tax system, however, requires stricter compliance and ongoing reporting, which may increase administrative accounting needs.

Registration Process: Speed and Accessibility of Opening a Business in Georgia vs Belarus

Registering an Individual Entrepreneur in Georgia is fast and straightforward, typically completed in several days. No minimum capital is required, and documents may be submitted online or directly to the tax office. Georgia is well-known for minimal bureaucracy and transparent registration procedures.

Using an Employer of Record in Belarus simplifies market entry even further compared to forming your own legal entity. A company does not need to register locally, navigate corporate formation, or process employment documentation. All legal and HR functions are handled by the Employer of Record provider, allowing operations to begin within a few days.
However, if the business eventually decides to open a local legal entity, that process will be longer and more complex.

Administrative Workload: Tax Compliance, Reporting, and Employment Law Management

Individual Entrepreneurs in Georgia are responsible for their own taxation, reporting, and compliance with labor legislation. While tax load is relatively low, accounting and reporting must be managed independently. As the business grows, additional accounting resources may be required.

Under the Employer of Record model in Belarus, all administrative responsibilities, payroll, taxation, reporting, and compliance,  fall on the Employer of Record provider. The client company is relieved from navigating labor law or managing complex paperwork, enabling a stronger focus on execution and product development.
This structure is especially beneficial for international businesses unfamiliar with Belarusian legislation.

Flexibility: Hiring Options, Remote Work, and Global Team Scaling

Individual Entrepreneurs in Georgia enjoy flexibility when hiring employees, working with freelancers, and entering international contracts. However, when the business scales, it may face limitations in taxation thresholds or require restructuring into a more complex business form.

Employer of Record provides even greater flexibility for global hiring and remote team management. Businesses may employ local and foreign specialists without registering a Belarusian legal entity, scale teams up or down quickly, and operate cross-border without additional administrative overhead.

Cost Considerations: Ongoing Expenses, Accounting Fees, Licensing Requirements

Maintaining Individual Entrepreneur status in Georgia is cost-efficient: registration is inexpensive, accounting requirements are minimal, and licensing is often not required. For startups and early-stage companies, this is one of the most cost-effective business setups.

Employers of Record in Belarus may incur higher recurring fees due to service charges that include payroll, HR, tax administration, and legal compliance. While this may be more expensive than operating as an Individual Entrepreneur in Georgia, the cost is justified for companies that want immediate access to the local market without incorporation or infrastructure expenses.

Conclusion

The choice of jurisdiction depends on your business goals, operational scale, financial structure, and long-term growth strategy.

Our team supports both models, registering Individual Entrepreneurs in Georgia and providing Employer of Record services in Belarus. We help founders select the optimal structure, ensure compliance, and provide legal and tax support throughout every stage of business development.

Contact us for professional assistance in choosing the best framework for your company’s growth.

Contact us

If you have any questions related to legal registration, taxation and labor relations in Belarus, we will be happy to help! Our long-term experience will help you choose a lawyer to represent your interests.

• +37529142-27-19 (WhatsApp, Viber, Telegram);
• info@ambylegal.by.