Will the director of a company in the Poti Free Industrial Zone need a work permit in 2026?

Following the update to Georgia’s labor migration regulations, the issue of work permits has become relevant not only for standard companies but also for businesses operating in Free Industrial Zones (FIZ). Despite the special tax and legal regime of such zones, the requirements for foreign directors are governed by separate legislation.

Brief summary

In most cases, a foreign director of a company in a Free Industrial Zone must obtain a work permit if they are actually conducting business activities in Georgia and do not hold a permanent residence permit or a legal exemption. The mere status of the company being located in a Free Industrial Zone does not exempt it from labor migration requirements.

Where the confusion arises

Free industrial zones create the impression of a “special territory” due to:

• a special tax regime;
• separate business regulations;
• special customs conditions.

Because of this, many assume that labor activities within a free industrial zone are regulated separately. However, this is not the case: immigration rules are based not on the company’s status, but on the actual activities of a specific individual in the country.

How labor migration is regulated

The updated legislation applies to foreign nationals without a permanent residence permit who:

• work for Georgian companies;
• derive income from activities in Georgia;
• engage in entrepreneurial or self‐employed activities (including partners and contractors).

Starting March 1, 2026, the regulations will explicitly cover self‐employed foreigners as well.

Key principle: if a foreigner derives income from activities in Georgia, they must have a legal basis for working — for example, a work permit, D1 status, or a corresponding residence permit.

Does this apply to directors in the Free Indistrial Zone?

Yes, it does. A foreign director is generally subject to the requirements of the law if he or she:

• is located in Georgia;
• manages the company;
• signs documents and makes decisions;
• receives income from his or her activities.

It does not matter whether the company is registered in a standard jurisdiction, the Virtual Zone, or the Free Indistrial Zone.

When a permit is required

A work permit is generally required if:

• the director is a foreign citizen;
• there is no permanent residence permit;
• the company is managed from Georgia;
• the activities are regular and remunerated.

When a permit is not required

In some cases, a permit may not be required:

• the director manages the company entirely from abroad;
• he holds a permanent residence permit in Georgia;
• a direct exemption under the law or an international agreement applies.

Why the Free Industrial Zones law does not provide automatic exemption

The Free Industrial Zones Law regulates:

• the establishment and operation of zones;
• tax incentives;
• organizational aspects of business.

However, it does not establish a separate immigration regime for foreign directors. This means that the Free Industrial Zone is an economic incentive, not an exception to labor migration rules.

Key criteria

The decisive factor is not whether the company is registered with the State Revenue Service, but rather:

• the actual place of management;
• the nature of the business;
• the director’s immigration status.

Risks of operating without a permit

Starting in 2026, oversight of foreign nationals’ employment activities has been strengthened. Violations may result in:

• fines (e.g., starting at 2,000 GEL);
• inspections by the labor inspectorate;
• difficulties in obtaining a D1 visa or residence permit;
• additional burden on the business;
• legal risks for owners and directors.

Practical recommendations

To mitigate risks, companies should:

• verify the director’s immigration status;
• determine where management is actually carried out;
• prepare documents for a work permit or residence permit in advance;
• not confuse tax incentives for Free Industrial Zones with immigration rules;
• monitor changes in legislation and practice.

Are changes possible?

In theory, certain simplifications or exemptions may be introduced for companies in the Free Industrial Zones. However, at this time, no such mechanisms exist in the legislation, so businesses should adhere to the general rules.

Conclusion

If a foreign director is actually conducting business from Georgia, it is safer to assume that a work permit is required. As long as there are no special exemptions for the Free Industrial Zones in the law, the general labor migration regime remains mandatory.