Employer of Record (EOR) in the Caucasus Region 2025: The Complete Hiring Guide
- Gegidze • გეგიძე | Marketing
- 5 days ago
- 18 min read
Table of Contents:
What is an employer of record (EOR) and how it works in the Caucasus
What does an employer of record (EOR) handle in the Caucasus?
Caucasus labor law, payroll taxes, and compliance: what you need to know
Cost of employer of record (EOR) in Georgia, Armenia, and Azerbaijan (2025)
Choosing the right EOR in the Caucasus: what most companies miss
Should you use an EOR to hire in the Caucasus? Here's how to know
Why companies are hiring in the Caucasus region in 2025
Everyone’s hiring in Poland. Or trying to.
But while global teams crowd into overfished markets, something smarter is happening in the Caucasus.
If Georgia, Armenia, and Azerbaijan aren’t on your hiring radar in 2025, you’re already behind.
These three countries are quietly becoming the go-to for companies that want remote teams with real skills, low costs, and no red tape. We’re talking about:
Full-stack engineers in Tbilisi at 40% of the cost of Berlin
Product designers in Yerevan fluent in English and Figma
Customer support leads in Baku working EU hours
And it’s not just anecdotal.
Armenia’s IT exports hit a record growth in 2024
Georgia ranks among the top 10 globally for ease of doing business
Azerbaijan is investing heavily in its digital economy and education infrastructure
Here’s the kicker: Most companies still don’t know this region is open for global hiring.
Which means you can get in early, before salaries spike and everyone else catches on.
The Caucasus isn’t a backup plan. It’s a first-mover advantage only if you act fast.
And with the right Employer of Record (EOR), you can legally hire in all three countries without setting up local entities or waiting months to get started.
Let’s break down how.
What Is an Employer of Record (EOR) and How It Works in the Caucasus
Hiring in Georgia, Armenia, or Azerbaijan sounds easy, until it’s not.
You’ve got the candidate. You’ve got the budget. They’re ready to start next week. But then you hit the wall:
No local entity. No payroll infrastructure. No clue how to draft a contract in Armenian.
That’s where an Employer of Record (EOR) comes in.
An EOR legally hires talent on your behalf in the Caucasus. You stay in control of the work, daily tasks, tools, reporting, and KPIs. The EOR handles the rest:
Local contracts written in Georgian, Armenian, or Azerbaijani that actually hold up under labor law
Tax registration with the local authorities - no trips to the Revenue Service
Payroll in local currency (GEL, AMD, AZN), filed on time, 100% compliant
Statutory benefits: annual leave, paid holidays, maternity and sick leave, all tracked
Offboarding that doesn’t trigger labor disputes or compliance red flags
This isn’t a global payroll hack. It’s legal employment with zero legal exposure.
without lost hires, compliance nightmares, or waiting six months for a local bank account to open.
In the Caucasus, an EOR lets you move like a local business without having to become one.
And that speed? That’s your competitive edge.
Challenges Without an EOR in the Caucasus
Hiring in the Caucasus? Each country looks simple from the outside, with fast Wi-Fi, skilled tech talent, and growing startup scenes.
But behind the talent? Red tape, legal landmines, and a whole lot of paperwork in three different alphabets.
Let’s break it down:
Employer of record (EOR) in Georgia
Georgia loves to brand itself as “open for business”, and it is, if you’re playing by the rules.
Contracts must be in Georgian and follow local labor law, even if the employee speaks perfect English.
You need to register the hire with the Revenue Service, and all payroll must reflect mandatory pension contributions (2% employer, 2% employee).
Probation periods, severance, and termination must be documented exactly, or you risk labor disputes.
There’s no legal difference between a startup and a multinational. If you get it wrong, you’re liable.
And don’t forget: Georgia doesn’t recognize foreign employment contracts. If you’re not registered here, you can’t hire… period.
Employer of record (EOR) in Armenia
Armenia’s tech ecosystem is growing fast, but its employment system hasn’t caught up.
All employment contracts must be filed in Armenian and adhere to the Labor Code.
Employers are required to register with the State Revenue Committee, report monthly, and contribute to pension funds and military duties.
Letting someone go? That’s the tricky part. Terminations must be justified, documented, and often come with severance.
Payroll tax isn’t flat: The tax system is tiered and applied monthly, and if you miss a filing? You’ll be backlogged fast.
Even if you’re paying globally, you still owe local filings, local taxes, and local accountability.
Employer of record (EOR) in Azerbaijan
The market in Baku is heating up, but the hiring system is stuck in the slow lane.
You must have a locally registered legal entity to issue employment contracts.
Employer contributions to the State Social Protection Fund are non-negotiable 22 %+ on top of gross salary.
Contracts have to reflect national labor law: 21 days of leave, sick leave reimbursements, and paid maternity/paternity.
Everything from taxes to HR documentation must be submitted in Azerbaijani, often in person or via outdated portals.
In short, Azerbaijan isn’t DIY-friendly. Even locals use agencies to get around the admin.
One region, three bureaucracies
Trying to DIY hiring in the Caucasus means building three legal playbooks, registering three tax entities, and learning labor law in Georgian, Armenian, and Azerbaijani.
And no, Google Translate won’t help you when you're summoned by the local revenue office.
Hiring across this region without an Employer of Record isn’t lean, it’s a full-time legal team.
What does an Employer of Record (EOR) handle in the Caucasus?
You’ve got the candidate. You’ve got the budget. What you don’t have is a Georgian tax ID, an Armenian payroll system, or a lawyer who speaks Azerbaijani.
That’s where an Employer of Record (EOR) comes in.
Team Up acts as the legal employer of your team across Georgia, Armenia, and Azerbaijan, so you don’t need to register an entity in three countries just to send a contract or run payroll.
Here’s what we handle, end-to-end:
1. Local employment contracts in the Caucasus
No templates. No guesswork. No Google Translate.
Every employee hired through us gets a contract written in their native language and fully compliant with national labor law.
By country:
Georgia - Bilingual (Georgian + English). Contracts must include job title, salary in GEL, and probation/notice terms. We include optional perks like 13th-month pay if you want them.
Armenia - Contracts in Armenian. Must specify hours, leave entitlements, and social security terms. We take care of Ministry of Labor filings and tax authority registration.
Azerbaijan - Contracts must be in Azerbaijani. We include all statutory benefits like 21 paid leave days, maternity leave, and overtime protection.
You approve the offer. We handle the legal lift.
2. Payroll, taxes, and government reporting In the Caucasus
Payroll isn’t just clicking “send” once a month.
Every hire needs to be registered with the local tax office, social security institution, and, in some cases, pension and military funds.
Here’s what we cover:
Currency - Employees are paid in GEL, AMD, or AZN, per local law.
Income Tax Withholding - From 20% flat (Georgia) to 25% top rate (Armenia) we get the numbers right.
Employer Contributions - Pension, health, unemployment, stamp duties, military contributions, handled, filed, and paid by us.
Payslips - Delivered monthly, in local format, in the local language.
We also file everything with the local tax authorities, so you’re compliant from Day.
3. Local leave, holidays & time off in the Caucasus
Statutory time off isn't optional here. You need to follow the rules or risk a visit from the labor inspector.
We calculate, track, and apply:
Georgia - 17 public holidays, 24 days of PTO, and 1 day off for every 11 days of overtime.
Armenia - 20+ vacation days, 126 days of maternity leave, and paid sick leave through social contributions.
Azerbaijan - 21 days of annual leave, 19 public holidays, maternity/paternity leave, and doctor-certified sick leave.
You want talent retention? Start with benefits that make sense locally. We make sure you don’t miss anything that matters.
4. Onboarding, offboarding, and everything in between
EOR isn’t just about onboarding. We handle every step of the employment journey:
Onboarding - Full compliance with local tax/social authorities, document handling, and probation management.
Amendments - Promotions, raises, bonus structures, we update contracts and notify the relevant agencies.
Offboarding - Notices, severance, final pay, exit paperwork. You won’t be the company that gets it wrong.
This isn’t “help with HR.” This is your HR but run legally through our local frameworks.
5. Optional add-ons that actually matter in this region
What seals the deal for top hires in the Caucasus? It’s not just salary. It’s feeling like their job is legit, stable, and taken seriously.
Here are what benefits we can help you offer:
Private health insurance – Especially common in Armenia and Azerbaijan, where public systems are limited.
Coworking access – From Digital Jungle in Tbilisi to Impact Hub in Yerevan, we give workspaces for your team
Remote perks – Home office stipends, tech setup, internet budgets rolled into payroll, legally documented.
Equipment delivery – Laptops and accessories, sourced and shipped locally to avoid customs delays.
Want to offer 13th-month pay, spot bonuses, or gym memberships? We’ll structure it so it’s legal, tax-efficient, and actually lands with your team.
TL;DR
You run the team. We handle the country.
No tax risks. No botched contracts. No delays because someone forgot to file a form with the State Revenue Service.
If you're hiring in Georgia, Armenia, or Azerbaijan and want to look legit, stay legal, and move fast, an EOR like TeamUp gives you the full back office without building one.
Don’t mistake simplicity for compliance. Here’s what the legal side really looks like across Georgia, Armenia, and Azerbaijan.
Caucasus labor law, payroll taxes, and compliance: what you need to know
Hiring in the Caucasus isn't wild territory, but it's not copy-paste compliant either. These countries take labor law seriously.
You mess up payroll, miscalculate leave, or write a vague termination clause, and suddenly you're liable in a court system you don't understand, in a language you can’t read.
Each country has its own labor code, contribution rates, and filing requirements. Here’s what you actually need to know before you hire.
Labor law, tax & compliance in Georgia
Working hours: 40 hours/week is standard. Anything over that? Paid overtime or compensatory time off is required.
Paid leave:
24 days of paid annual leave
15 days of paid sick leave
17 public holidays (yep, 17)
Termination:
Probation periods up to 3 months
30-day notice is typical
Severance: 1 month’s pay per year of service (if terminated without cause)
Taxes:
20% income tax withheld at source
2% employer pension contribution
2% employee pension contribution
All reported to the Georgia Revenue Service monthly
Local insight: Employment contracts must be bilingual and reference local law. Salary must be set in GEL. Misclassification of a contractor = big risk.
Labor law, tax & compliance in Armenia
Working hours: 40 hours/week is the norm. Max 48 hours allowed with consent.
Paid leave:
20 working days of annual leave
Sick leave paid via the social fund based on tenure
126 calendar days of paid maternity leave
10+ official holidays
Termination:
Written notice required
Justified cause needed
Severance: 1 month’s salary per year of service in some cases
Taxes & contributions:
22% flat income tax (includes social contributions)
5%–10% employee pension (based on salary)
Military stamp duty: 1,500–15,000 AMD/month
Local insight: All contracts must be in Armenian. Employees expect clarity and formality. Sloppy paperwork will damage trust instantly.
Labor law, tax & compliance in Azerbaijan
Working hours: Standard is 40 hours/week. Flexible arrangements are possible but must be agreed in writing.
Paid leave:
21 working days of vacation
19 public holidays
14 weeks of maternity leave (100% paid)
Paternity leave: 14 days (unpaid, but required to be granted)
Sick leave: requires medical documentation, partly reimbursed by social security
Termination:
2–8 weeks’ notice, depending on length of service
Severance required for redundancy or long-term service
Documentation is mandatory to justify the cause
Taxes & contributions:
Income tax: progressive, up to 25%
Social fund: 22% (employer) + 3% (employee)
Must report monthly to the State Social Protection Fund
Local insight: Azerbaijan is pro-employee when it comes to labor disputes. Even a formatting error in a contract could void a clause. We make sure that doesn’t happen.
Cost of Employer of Record (EOR) in Georgia, Armenia, and Azerbaijan (2025)
Let’s get one thing straight: salaries are only half the story.
If you’re hiring in Georgia, Armenia, or Azerbaijan through an Employer of Record (EOR), your total monthly cost will include:
The employee’s gross salary
Mandatory employer taxes and contributions (varies by country)
A flat EOR service fee (€199/month per employee with TeamUp)
That’s it. No surprise charges. No markups. One invoice.
So what do the numbers look like?
Georgia: Lowest Cost to Hire via EOR
Cost Component | Amount (USD) |
Gross Salary | $2,000 |
Employer Pension (2%) | $40 |
TeamUp EOR Fee | $215 |
Total Monthly Cost | $2,255 |
Local Insights: Georgia offers 0% tax on foreign income for many remote workers, simple labor laws, and fast onboarding (5–10 days).
Armenia: Cost-Effective for Mid-Level Talent
Cost Component | Amount (USD) |
Gross Salary | $2,000 |
Social Contributions (~7.5%) | $150 |
Military Duty | ~$25 |
TeamUp EOR Fee | $215 |
Total Monthly Cost | $2,390 |
Local Insights: Armenia has higher social charges than Georgia but offers deep local talent in tech, product, and support. Expect strong benefits expectations.
According to Armenia’s Ministry of High-tech industry, tech exports grew 35% in 2024, a record for the sector. (source: gov.am)
Azerbaijan: Higher Tax Burden, Still Cheaper than Western Europe
Cost Component | Amount (USD) |
Gross Salary | $2,000 |
Social Security & Taxes (~25%) | $500 |
TeamUp EOR Fee | $215 |
Total Monthly Cost | $2,715 |
Local Insights: Hiring in Azerbaijan costs a bit more due to social fund contributions, but the candidate pool is growing fast, especially in IT and infrastructure roles.
What does the €199 TeamUp EOR fee cover?
Hiring via TeamUp in the Caucasus includes:
Legally compliant contracts in GEL, AMD, AZN
Monthly payroll, tax withholding, and contributions
Local employee registration and benefits management
Paid time off, public holiday tracking, and leave processing
Onboarding, offboarding, and HR support
Local compliance + English-language account management
This isn’t payroll alone. It’s full-service EOR coverage built for fast-moving teams.
So what’s the takeaway?
Budget-sensitive - Georgia is lean and compliant.
Looking for depth in engineering and product roles - Armenia’s the sweet spot.
Long-term regional expansion - Azerbaijan has the infrastructure, just at a slightly higher cost.
And remember, with TeamUp, you get one invoice, full compliance, and no hidden fees.
What you can offer through an EOR in the Caucasus
Hiring someone through an Employer of Record (EOR) in the Caucasus isn’t only about legal contracts and payroll. It’s about offering a competitive employment experience in line with local expectations and fully managed on your behalf.
With Team Up, you get more than a compliance box-checker. You get a localized HR partner who helps you attract, retain, and support the best talent in Georgia, Armenia, or Azerbaijan without building in-house infrastructure.
Here’s what you can offer through our EOR platform in the Caucasus:
1. Statutory benefits in the Caucasus (fully compliant in each country)
We handle all legal requirements, including:
Georgia
Paid Time Off: At least 24 calendar days per year
Sick Leave: Covered by Social Security with doctor’s approval
Maternity Leave: 183 days (paid through the social fund)
Pension Contribution: 2% employer + 2% employee
Armenia
Paid Time Off: Minimum 20 working days after six months
Sick Leave: Paid based on tenure and social contributions
Maternity Leave: 126 calendar days paid
Military Duty Tax: Mandatory contribution (based on salary tier)
Azerbaijan
Paid Time Off: 21 days minimum after six months
Sick Leave: Paid with an official medical certificate
Maternity Leave: 126 days fully paid by the employer/state
Social Contributions: ~25% of gross salary
We track, administer, and ensure all benefits are compliant with local labor codes, so you’re protected and your employee is covered.
2. Optional perks that matter to talent
If you want to stand out, here’s what we can help you offer through payroll:
Private health insurance: Especially valuable in Armenia and Azerbaijan, where public healthcare may be limited
Coworking memberships: Access to workspaces in Tbilisi, Yerevan, or Baku
Home office setup: Local sourcing of laptops, desks, and monitors without customs issues
Wellness or learning allowances: Add gym access or learning stipends through payroll
13th-month pay or performance bonuses: Fully structured into payroll and taxed properly
You decide the perks, we localize, deliver, and track them.
3. Equipment & onboarding support
Need your new hire up and running fast?
We handle:
Hardware sourcing: Laptops and accessories from local vendors
Delivery: No international shipping delays or duties
Set up support: VPNs, security protocols, team onboarding guides
This ensures your team starts fast and feels connected from Day One.
4. Local HR & payroll support
Every employee hired through TeamUp has access to:
HR help in the local language and English
Support for sick leave, contract changes, and time-off requests
Fast response times (not buried in tickets)
You get one point of contact. Your employee gets real support. Everybody wins.
EOR vs payroll outsourcing in the Caucasus
Let’s clear up the confusion: if you don’t have a registered entity in Georgia, Armenia, or Azerbaijan, payroll outsourcing won’t get you far.
That’s where an Employer of Record (EOR) comes in. It’s not just payroll. It’s the full legal structure that lets you hire without setting up shop locally.
Here’s what matters when you’re deciding between an EOR and a payroll provider in the Caucasus.
What payroll outsourcing does
Payroll outsourcing is exactly what it sounds like: a service that calculates salaries, deducts taxes, and files reports for companies that already have a legal entity in the country.
Useful if:
You’ve already opened an LLC or branch office
You’re fully registered with the tax and social security authorities
You have HR or legal support locally
You just need help running numbers and filing paperwork
But it won’t help if you’re just starting out.
You’ll still be responsible for:
Drafting compliant contracts in the local language
Managing leave, sick days, and benefits
Terminating employees within legal notice and severance rules
Navigating audits or labor disputes
If you get any of that wrong, you’re still on the hook.
What an EOR does
An Employer of Record (EOR) becomes the legal employer on your behalf. You run the team. We run the compliance.
You can:
Hire in Georgia, Armenia, or Azerbaijan with no entity
Start in days, not months
Offer real contracts, benefits, and local support
Stay compliant with labor laws, you don’t have time to master
It’s how smart companies go to market without waiting on company formation, tax registration, or payroll setup.
EOR vs payroll outsourcing in the Caucasus: side-by-side
Feature | Employer of Record (EOR) | Payroll Outsourcing |
Local entity required | No | Yes |
Legal employer | Yes (TeamUp) | No (You are) |
Drafts local employment contracts | Yes | No |
Handles tax and social contributions | Yes | Yes |
Provides benefits & perks | Yes | No |
Manages onboarding & offboarding | Yes | No |
Risk liability | TeamUp assumes it | You assume it |
Best for | Companies without a local entity | Companies with a local entity |
If you're hiring your first few employees in the Caucasus, and you’re not ready to open an entity, payroll outsourcing won’t cut it.
But with an EOR like TeamUp, you can:
Legally employ talent in all 3 countries
Skip setup delays and upfront costs
Focus on building your team, not learning tax law
You manage the roadmap. We manage the red tape.
Still not sure which is right for you?
We’ll tell you honestly. If you’re set up for payroll outsourcing, we’ll say so. But if you’re not, EOR is your bridge into the market fast, legal, and flexible.
Choosing the right EOR in the Caucasus: what most companies miss
You’re not just outsourcing paperwork. You’re trusting someone to legally employ your team, pay them on time, and protect your company in three different legal systems.
Pick the wrong Employer of Record in the Caucasus, and you’ll find yourself chasing contractors, explaining missed paychecks, or worse, facing compliance issues across Georgia, Armenia, and Azerbaijan.
So, how do you choose the right EOR partner in this region?
Let’s make it simple.
1. Make sure they know the region
A lot of global EORs say they cover the Caucasus. But many are just routing you through subcontractors in Tbilisi or Yerevan.
That means delays, miscommunication, and limited accountability.
Ask:
Do you directly manage operations across all three countries?
Do you handle local compliance and payroll in-house?
Can you support employees in Georgian, Armenian, and Azerbaijani?
If the answers are vague, you’ve got a middleman, not a partner.
2. Ask what happens when things go wrong
Everyone looks great in onboarding. But what happens when an employee goes on sick leave in Baku? Or resigns unexpectedly in Yerevan?
A good EOR should:
Know the termination laws and severance policies by country
Handle offboarding legally and sensitively
Guide you through payroll, notice periods, and documentation in the local language
If they don’t have examples, they don’t have experience.
3. Don’t settle for “one size fits all” benefits
Offering just a salary won’t cut it, especially for top tech and ops talent.
Your EOR should help you build real, country-specific benefit packages that feel like full-time employment, not a shortcut.
Ask:
Can we offer coworking space access in Tbilisi?
Is private health coverage an option in Yerevan?
Do you support home office or learning stipends in Baku?
If the answer is no or “we’ll get back to you,” move on.
4. Check their pricing (and read the fine print)
Low base rates often hide high service fees. And some providers charge extra for onboarding, benefits admin, or even sending an invoice.
You want flat, transparent pricing that covers:
Payroll and tax compliance
Contracts, reporting, and employee support
Local HR queries, onboarding, and offboarding
Ask:
Is your fee per employee or salary-based?
Are there any setup or exit fees?
What’s actually included?
With Team Up, it’s €199/month flat. No surprises. No markups.
5. Look for real support, not just automation
Sure, automation is great. But when your engineer in Tbilisi has a payroll question, or your support lead in Yerevan wants time off, bots won’t cut it.
You need a partner who understands:
Regional expectations
Local regulations
Your business goals
We support your team in local languages and keep you looped in on every step.
Should you use an EOR to hire in the Caucasus? Here's how to know
Let’s cut to it, not every company needs an EOR. But if you're hiring in Georgia, Armenia, or Azerbaijan and don’t have a local entity (or the appetite to build one), it’s probably your smartest move.
Here’s how to know for sure.
An EOR is the right move if you:
Want to hire 1–10 people fast without setting up a local company
Need to test the Caucasus talent pool before committing long-term
Don’t want to spend weeks untangling labor laws in three different countries
Care about compliance, but don’t want to hire a local lawyer
Want your employees to feel like real team members with benefits, paid leave, and HR support
Are scaling a remote team and need legal clarity, not complexity
You focus on your product. We’ll handle payroll, contracts, and compliance in the background in Georgian, Armenian, or Azerbaijani.
An EOR might not be the best fit if you:
Plan to open a permanent office and build a full team locally
Are hiring 30+ people and want full control over HR systems, policy, and infrastructure
Already have a legal entity and local operations in place
Need a setup that includes things like equity grants, share options, or executive-level benefits that require direct employment
In that case, setting up your own company (with our help, if you want) could be a better path.
Still not sure?
Here’s the one-liner:
If you’re looking for speed, compliance, and flexibility in the Caucasus, EOR is your play.
And if you're wondering whether it's a stopgap or a long-term solution, the answer is yes to both.
Most TeamUp clients start with 1–5 hires, stay compliant, then either scale with us or transition to their own entity. No lock-in, no penalty.
Hiring in Georgia, Armenia, or Azerbaijan shouldn’t slow your roadmap.
Let us take the friction out of your expansion.
Bottom line: hire in the Caucasus without the headaches
If you're still spinning your wheels trying to figure out labor law in Tbilisi, bank setup in Yerevan, or payroll compliance in Baku - stop.
Smart teams aren’t wasting time on entity formation. They’re hiring through an EOR.
The Caucasus is packed with affordable, high-quality talent across tech, ops, and finance. But tapping into that talent without a local partner? That’s where things break.
With TeamUp, you get:
Compliant hiring in Georgia, Armenia, and Azerbaijan
Local contracts, payroll, and tax handled for you
Real employee benefits, no DIY patchwork
One monthly invoice, no hidden fees
No waiting months for your entity to be approved. No legal exposure. No rogue contractors.
Just talent. Onboarded. Legally employed. And working for you.
Ready to hire in the Caucasus?
We’ll help you go from “we want to hire” to “we hired” in under 10 days.
Book your free consult now. Let’s get your team live.
Frequently asked questions (FAQs)
What is an Employer of Record (EOR) in the Caucasus region?
An Employer of Record (EOR) in the Caucasus is a third-party provider that legally hires employees on your behalf in Georgia, Armenia, or Azerbaijan. You manage the work; the EOR handles contracts, payroll, taxes, and compliance without you needing to open a local entity.
