If you haven’t been following the news, Georgia has recently introduced a requirement for foreign nationals working or conducting entrepreneurial activities in the country to apply for the new Georgian Labour Permit. Known by various names (Special Labour Permit, Right to Work, etc.), this new requirement, according to the Government, is intended to track labour migration and to promote the local workforce on the labour market.
The introduction of this system has startled many local businesses as well as expat entrepreneurs and workers, though for different reasons. Some worry that adding an extra administrative step for foreigners starting activity in Georgia could discourage investors and weaken the business environment. While this concern has merit, the expert consensus is that Georgia, even with this system in place, will likely remain one of the most hassle‑free jurisdictions for entrepreneurial activity.
There is also concern about various procedural challenges introduced by the new regulations supporting the system, and we believe this position carries more weight. In our previous article on the topic, we briefly touched on the problematic nature of these changes. Since then, we have meticulously reviewed the Government Ordinance No. 70 (dated February 20th, 2026) and specifically identified four core issues that remain unaddressed by the new system and its creators.
We believe that these issues are a result of provisions that are either poorly drafted, internally inconsistent, or simply don’t account for the reality of how foreign entrepreneurs and self-employed individuals actually operate in Georgia. The system appears to have been primarily designed to regulate Georgian employer-employee relationships, and when applied to foreign individuals operating outside of those relationships, it produces outcomes that are somewhat impractical at best, and genuinely counterproductive at worst.
This article serves as a deep dive into those issues, aiming to shed light on the problems the government will need to address in the coming months.
If you’re someone who’s just getting familiar with the new requirements and wants an overview of what the system entails, our original articles on the topic should have sufficient information to get you started. If, however, you are curious about the inner workings of regulations like this and want more than a surface‑level overview, read on.
Issue 1: A Vicious Circle Built into the Law
Article 9(1)(b) of the Ordinance states that a labour immigrant or self-employed foreigner who is already present in Georgia at the time their Right to Work is granted must, within 10 calendar days, apply to the State Service Development Agency for either a work residence permit or an IT residence permit.
Article 10(1) further provides that for applicants who do not already hold a residence permit, the Right to Work only becomes legally valid and operational from the moment the D1 visa or work residence permit is obtained.
In our original article about the Ordinance, we referred to this as a “10-day Problem.” And it is indeed a problem: reading those two provisions reveals a circular dependency, which, in our opinion, remains one of the most significant unresolved issues in the entire framework.
For every individual starting a business while already being present in Georgia (except those engaged in the IT field or already holding a residence permit), the sequence the law creates is as follows:
You start a business → You apply for a Right to Work → You obtain it within 10 to 30 days → You have 10 days to apply for a work residence permit → As the business has just been created, you cannot proceed with the residence permit application → Your Right to Work is revoked due to failure to obtain the residence permit.
The work residence permit is the most accessible and widely used path to legal residency in Georgia. It requires the sponsoring business (or self-employment status in the case of Individual Entrepreneurs) to demonstrate at least 50,000 GEL in declared revenue over the preceding 12 months.
Someone who has just arrived in Georgia, registered an IE/LLC, and applied for a Right to Work has zero Georgian revenue history. Furthermore, the law also implies that earning revenue through the business within the tight 10-day timeframe could be illegal: you need to activate your Right to Work before you’re able to start working, after all. In other words, even if you were able to clear 50k revenue in 10 days and submit the residence application in time, you could be fined for operating without a labour permit.
So the circle closes on itself completely: you cannot legally earn income without an active Right to Work, you cannot activate the Right to Work without a residence permit, and you cannot obtain the residence permit without income you were never legally permitted to earn.
We strongly believe that this rule was entirely conceived with Georgian employers in mind. It’s been public information since the announcement of these changes that the primary reason behind introducing this system was the Government’s concerns over Georgian companies hiring foreigners over local candidates. In this context, having a tight post-approval deadline for an immigration process for a hired foreign individual makes sense to some extent. The employer, in this scenario, has existing revenue, existing infrastructure, and an existing relationship with the immigration system, which makes the 10-day clock manageable.
However, when the same rule is mechanically applied to a foreign entrepreneur whose best path towards establishing their residence in Georgia is starting and operating a business first, it produces a logical impossibility. We don’t think this is a deliberate policy, but rather a drafting oversight that is bound to be rectified in practice or through statutory amendments in the coming months.
Issue 2: The Scope of Affected Persons
Article 1(1) of the Ordinance defines a self-employed foreigner subject to the new system as a foreign national without permanent residence who conducts labour activity in Georgia, “including being engaged in trade, services or other types of activity, or being a partner, independent contractor, or otherwise involved in entrepreneurial/labour activity” where the purpose is financial gain.
From the first reading of the article, it becomes clear that the definition of “self-employed” foreigners is way too broad to be workable. The category of “partner” includes every foreign national who holds shares in a Georgian company, regardless of whether they play any active role in the business. This means that passive shareholders of Georgian companies who attend one board meeting a year and receive dividends are, under this definition, self-employed foreigners and need a Right to Work. The same logic applies to directors of Georgian companies who don’t reside in Georgia, while the day-to-day of those companies is managed by local staff.
This definition holds even more troubling implications for foreign investors. Investing in the local real estate market, for instance, which is an extremely common activity expats engage in, could technically be interpreted to constitute “activity with the intent to gain financial benefit.” This means that investors who haven’t even set foot in a Georgian office and have zero involvement in the local labour market could also be captured by this system and made to apply for the permits.
This is a huge conceptual problem. The Right to Work is a legal instrument intended to protect the labour market. Its purpose is to make sure that local workers are not displaced by foreign labour (which is something Annex 3 confirms further by setting quotas on labour permits for certain occupations to zero). Shareholding and passive investment are not forms of labour. Applying the permit requirements to individuals engaging in these “activities” conflates two distinct legal and economic concepts, and there is no policy justification for it.
On the contrary, if the purpose of the law is to encourage local employment, creating barriers for foreign individuals registering businesses and potentially offering jobs for locals is not consistent with that objective.
Issue 3: The Remote Work Exemption
Article 9(2) states that the obligation to obtain a D1 visa or residence permit following the grant of a Right to Work does not apply to a person who “carries out labour/entrepreneurial activities completely remotely, and they need not enter Georgia to carry out these activities.”
The problem with this provision lies in the broad and ambiguous wording that allows for at least three different interpretations with vastly different outcomes.
The narrowest reading is that the exemption applies only to foreign employees of Georgian companies who work fully remotely without ever entering the territory of Georgia. This interpretation is consistent with the Ordinance’s primary focus on the Georgian employer-employee relationship, and we think this is the intended meaning. Foreign individuals physically present in Georgia would not receive the benefit under this reading.
A broader interpretation would suggest that the provision also applies to foreign nationals who have their business structures set up in Georgia (IEs included) but do not reside here. Consequently, under this reading, self-employed individuals and employees of Georgian businesses who work fully remotely without ever entering the territory of Georgia would not need to obtain the residence permit after getting the Right to Work.
The broadest possible interpretation of the provision is that it applies to anyone who carries on activities in such a way that does not require their presence in Georgia, regardless of whether they’re actually here or not. Therefore, expat individuals present in Georgia whose business/labour activities have no connection with the Georgian market would fall under this exemption. This would most commonly cover foreign-owned and operated companies that exclusively export services, as well as IEs that only serve non-Georgian clients/customers.
The stakes of this interpretive question are high. The first reading leaves the majority of the expat community with no exemption at all, while the third reading would exempt a very significant portion of them entirely from the visa and residence permit obligations. As things stand today, nobody knows which reading is correct, because the Ordinance provides no further guidance on the matter.
Issue 4: The 6-Month Absence Rule
Article 7(2)(i) provides that the Right to Work of a self-employed foreigner is automatically terminated if they leave Georgian borders continuously for more than six months.
This rule comes into direct collision with the remote work exemption in Article 9(2) (discussed in the 3rd section of this article), and the Ordinance offers no resolution to this problem.
If a foreign individual qualifies for the remote work exemption, it follows logically that they shouldn’t be subjected to physical presence requirements in Georgia, and that their absence is fully consistent with the terms on which their Right to Work was granted. And yet the six-month rule applies to every foreigner across the board, with no exception for those whose activities do not necessitate relocation to Georgia. As a result, a person who is told by the law that their presence here is not required for their activity can, regardless, lose their Right to Work for not being present in Georgia.
This rule could also have broader implications for foreign investors, who, as we discussed earlier in this article, could be affected by the new regulations as well. For instance, an investor with a Right to Work who spends 7 months in other countries managing their business interests there could have their Right to Work automatically revoked due to their absence in Georgia under this provision. From an economic perspective, this could have devastating effects on Georgia as a jurisdiction that has been successfully competing for mobile capital in the past few decades.
Once again, after analyzing this rule through the lens of Georgian employer-employee relationships, it instantly makes more sense: the Government wants to ensure that a foreign national employed by a Georgian company is actually present and working, rather than using a permit to maintain a nominal legal status. However, when applied to individuals outside of those relationships, the same rule produces unintended and undesired consequences.
It is also noteworthy that in case the Right to Work is terminated due to the 6-month absence rule, the foreign individual has the right to request it again after a month. This means that there would be, at least, a 1-month period during which the foreign individual will not have the right to conduct employment/entrepreneurial activities.
Conclusion
The common thread running through each of the issues is very clear: Georgia’s new labour permit framework was conceived, at its core, as a tool for managing the relationship between Georgian employers and foreign workers and protecting Georgian workers in sectors where displacement by foreign nationals is a real and immediate phenomenon.
We think that is a legitimate policy goal, despite the somewhat poor execution at the time of writing of this article.
Our take on this whole situation is that these issues are a result of drafting oversight rather than deliberate policy. Georgia has shown time and time again its willingness to refine its regulatory frameworks when legitimate concerns are raised by the business community. Addressing these issues does not require a fundamental rethinking of the system. Rather, the Government merely needs to finish what they started with the regulations intended for Georgian employers, and take the same level of care in devising the rules applicable to the self-employed and investor communities.
We will be watching developments closely and publishing updates as the system begins operating in practice. If you want to make sure you don’t miss anything, subscribe to our newsletter and follow our social media. And if you have questions about how any of this affects your specific situation, we’re always here to help.
