Yes. Construction arbitrage is legal in Georgia. Winning the prime contract with a client, subcontracting the physical work to specialist trades, and keeping the margin between the two sides of the deal is exactly how Georgia's construction market operates. The compliance requirement is a valid licence from the State Licensing Board for Residential and Commercial General Contractors - and that applies from the first real job.
I run this model across different markets. Georgia is a serious construction environment. Atlanta is one of the fastest-growing metros in the US, which means real volume and real enforcement activity if you try to operate without the paperwork in order. Here is what the SLBRGC requires and what you need to have set up before you take on work.
Is construction arbitrage legal in Georgia - the direct answer
Construction arbitrage is main contracting run lean. You hold the prime contract with the client, you sub out the physical work to vetted specialist trades, and you capture the spread between the client price and the sub price. No Georgia statute requires a prime contractor to self-perform any part of a construction contract - the model itself is legal everywhere.
What Georgia does require is that the entity holding the prime contract has a valid contractor licence. The State Licensing Board for Residential and Commercial General Contractors (SLBRGC) is the regulator, operating through the Georgia Secretary of State's office.
Get the licence right and you are compliant. Skip it and the exposure is serious - criminal misdemeanour, unenforceable contracts, and the inability to pursue payment through the courts.
The State Licensing Board for Residential and Commercial General Contractors
The SLBRGC is the licensing authority for all residential and commercial general contracting in Georgia. It operates under the Georgia Secretary of State's Professional Licensing Division.
The board sets licence classifications, administers the qualifying examination, processes applications, handles complaints, and enforces against unlicensed activity. As of November 2025, all applications, renewals, and licence verifications run through the GOALS portal at sos.ga.gov. Paper applications no longer apply.
The law governing the board is OCGA Title 43, Chapter 41 - the Residential and General Contracting Act. That is the statute to read if you want the source rather than a summary.
Licence classifications for the construction arbitrage model
Georgia uses three main licence classifications under OCGA 43-41. The right one for you depends on the type of work you plan to take on:
Residential-Basic Contractor - covers detached single-family homes, two-family homes, and townhouses up to three storeys, plus their accessory buildings. If you are targeting the residential repair and renovation market in Georgia - the bread and butter of property maintenance and home improvement contracts - this is the classification that covers you.
Residential-Light Commercial Contractor - covers everything a Residential-Basic licence covers, plus multi-family and multi-use light commercial buildings up to three storeys and not exceeding 25,000 square feet of interior floor space. A useful step-up for operators who want to take apartment block renovation contracts alongside residential work.
Commercial General Contractor - unlimited scope. You can take on any construction project regardless of size, height, or use. This is the unrestricted licence, and it is what most construction arbitrage operators building serious commercial volume will need to hold.
For a mixed residential and commercial portfolio - which is the practical position for anyone building volume across different job types - the Commercial General Contractor licence is the one to work towards. It covers the full scope, so you are never turning down a job because your classification does not reach it.
The $2,500 threshold
Georgia's licensing requirement kicks in at $2,500 in combined labour and materials under OCGA Title 43, Chapter 41. Below that threshold, some incidental work is exempt. Above it - and that covers virtually every real construction, renovation, or repair job - a licence is required before you can contract or bid.
That $2,500 figure is not a grey area. A bathroom renovation, a kitchen refit, a roof repair - all of them are over $2,500 the moment materials are priced. Do not treat the threshold as a practical exemption for anything beyond genuinely minor handyman jobs.
Specialty trades - electrical, plumbing, HVAC, low-voltage - require their own state trade licences regardless of project value. The $2,500 threshold applies to general contracting; it does not create an exemption for licensed trade work at any price point.
The qualifying agent requirement
Georgia does not issue a licence directly to a business entity. It issues the licence on the basis of a qualifying agent - a licensed individual within the business who is actually engaged by ownership or employment in the practice of residential or general contracting, and who is responsible for supervising the projects of that business.
Under OCGA 43-41, a business organisation cannot contract without having a qualifying agent holding a current, valid licence on its behalf. If the qualifying agent leaves or their licence lapses, the company's ability to contract is affected.
In practice: if you are structuring your construction arbitrage operation as an LLC or corporation - which you should be for liability separation - you need a qualifying agent in place from day one. That agent can be you, or a regularly employed individual within the business.
To sit the qualifying exam you must demonstrate relevant experience in construction or management of construction. The exam itself is administered by PSI Exams and covers business law and trade knowledge. All new applications and renewals go through the GOALS portal at sos.ga.gov.
What the licence requires - insurance and bonds
The SLBRGC requires proof of current insurance as a condition of licence, verified at application and maintained throughout the licence period:
General liability insurance:
- $300,000 minimum for a Residential-Basic Contractor licence
- $500,000 minimum for a Residential-Light Commercial or Commercial General Contractor licence
This is not optional. The certificate must be current and the amounts must meet the minimum for your licence class. Most commercial clients and developers require higher limits - $1 million or $2 million - as a condition of awarding a contract. The SLBRGC minimum is a floor, not a ceiling.
Workers' compensation insurance is mandatory in Georgia under OCGA 34-9-2 for any business with three or more employees. Georgia counts corporate officers toward that three-employee threshold, so the bar is lower than it first appears for owner-managed operations with a small admin team. If you have employees - even part-time - get the workers' comp in place before you hire.
Surety bond: a bond is required as part of the licensing application. The amount varies by licence class and individual circumstances - verify the current requirement through the GOALS portal when you apply.
Licence renewal runs on a two-year cycle, with licences renewing by June 30 of even-numbered years. As of January 2026, all continuing education hours must be reported through the CE Broker platform.
Subcontractors must hold their own licences
Your SLBRGC licence as the prime contractor does not extend to the subcontractors working under you. Every subcontractor you engage must independently hold the appropriate licence for the work they are performing.
A plumber working under your contract needs their own Georgia plumbing licence. An electrician needs their own electrical licence. A general sub doing structural or fit-out work above the $2,500 threshold must also be appropriately licensed. Your general contractor licence covers your prime contracting position - not the scope your subs are carrying out on the ground.
This is the compliance point that catches operators who rush to scale. Verify every subcontractor's licence through the SLBRGC public licence search before any work starts. Make it a non-negotiable step in your subcontractor onboarding - the same way you take proof of current insurance from every sub before they set foot on a job.
The construction arbitrage model works in Georgia. What does not work is using your GC licence to cover unlicensed subs. The board checks. So does your client's solicitor when something goes wrong.
The penalties for contracting without a licence in Georgia
Under OCGA 43-41-12, contracting without a licence in Georgia is a misdemeanour:
- Fine: not less than $1,000
- Imprisonment: up to three months
- Both fine and imprisonment at the court's discretion
Beyond the criminal track, OCGA 43-41-17 provides that any contract for licensed work entered into by an unlicensed contractor is unenforceable in law or equity. An unlicensed contractor cannot take the client to court to recover payment, and cannot file a mechanics lien. The board also has authority to pursue administrative penalties and injunctions independently of the criminal process.
The unenforceability rule is the one that stings most in practice. If you do the work without a licence and the client refuses to pay, you have no legal recourse. Georgia explicitly removed that protection.
What makes it non-compliant
Construction arbitrage is not illegal in Georgia. What creates legal exposure:
- Operating without an SLBRGC licence - any prime contracting work above $2,500 without a current, valid licence is a criminal offence under Georgia law
- Wrong licence classification - a Residential-Basic licence does not cover commercial work; a Residential-Light Commercial licence has the 25,000 sq ft cap; using the wrong classification on a job is a licensing violation
- Engaging unlicensed subcontractors - your licence does not cover your subs; if a sub is unlicensed for the scope they are carrying out under your contract, the exposure is yours
- Insurance not current - if your general liability or workers' comp lapses and you are not maintaining the SLBRGC minimum levels, your licence is at risk
- Qualifying agent gap - if the qualifying agent on your licence leaves the business or lets their licence lapse without being replaced, your company's ability to contract is affected
None of this is complicated. Get the right classification before you take your first job. Keep the insurance current. Verify every sub's licence before they start. The compliance stack is manageable if you build it into your setup from the beginning - the problems happen when operators skip this and try to fix it after a complaint lands.
The next step
The global legality overview covers the UK, Canada, Australia, Ireland, New Zealand, and other US states in one place. Do you need a contractor licence for construction arbitrage goes into the US state-by-state picture in more depth. For the state next door, is construction arbitrage legal in Florida covers the DBPR licensing system and how it differs from Georgia. For the full setup sequence from entity registration to first job, how to start a construction arbitrage business covers the complete process.
If you want the full system - licence structure, subcontractor agreements, pricing, and client acquisition - in one place, THE FAMILY SECRET - How Construction Arbitrage Really Works is coming soon.
This is general information, not legal advice. SLBRGC licence classifications, insurance minimums, bond amounts, exam formats, and fee schedules change. Verify current requirements directly through the GOALS portal at sos.ga.gov and with a qualified Georgia construction attorney before you take on work.
Last checked: 15 August 2026.
Frequently asked questions
Is construction arbitrage legal in Georgia?+
Yes. Acting as the prime contractor, subcontracting all physical work to vetted trades, and keeping the spread between the client price and the sub price is how Georgia construction has always operated. The legal requirement is a valid licence from the State Licensing Board for Residential and Commercial General Contractors (SLBRGC) - and each subcontractor you engage must independently hold their own appropriate licence for the work they perform.
What licence do you need for construction arbitrage in Georgia?+
For residential projects - single-family homes and townhouses up to three storeys - a Residential-Basic Contractor licence covers you. For light commercial work up to 25,000 sq ft and three storeys, a Residential-Light Commercial Contractor licence applies. For unrestricted commercial work, you need a Commercial General Contractor licence. Most construction arbitrage operators building a mixed portfolio will find the General Contractor licence the most practical to hold long-term.
Do subcontractors in Georgia need their own licence?+
Yes. Your SLBRGC licence as the prime contractor does not extend to the subcontractors working under you. Specialty trades - electricians, plumbers, HVAC technicians, and low-voltage installers - must hold their own state-issued trade licences regardless of project value. General subcontractors performing work above $2,500 on a given scope must also be appropriately licensed. Verify every sub through the SLBRGC's licence search before they start work.
What is the threshold that triggers the Georgia contractor licence requirement?+
Under OCGA Title 43, Chapter 41, a licence is required for any residential or commercial general contracting work valued at $2,500 or more in combined labour and materials. Below that threshold some work is exempt, but almost every real construction job - any meaningful repair, renovation, or new build - clears $2,500 immediately. Specialty trades are required to be licensed regardless of project value.
What are the penalties for contracting without a licence in Georgia?+
Under OCGA 43-41-12, unlicensed contracting is a misdemeanour in Georgia. A conviction carries a fine of not less than $1,000 or up to three months imprisonment, or both, at the court's discretion. Beyond the criminal track, any contract for licensed work entered into by an unlicensed contractor is unenforceable in law or equity - meaning the unlicensed contractor cannot pursue payment through the courts or file a mechanics lien. The exposure is real and the board enforces actively.
What insurance does Georgia require for a contractor licence?+
The SLBRGC requires proof of general liability insurance as a condition of licence: $300,000 minimum for a Residential-Basic licence, and $500,000 minimum for a Residential-Light Commercial or Commercial General Contractor licence. Workers' compensation insurance is mandatory under OCGA 34-9-2 for any business with three or more employees. Both certificates must be current at the time of application and maintained throughout the licence period.
Mohamed El HadriCo-Founder
I'm a co-founder of several construction companies. I built a construction business from a 30-van operation into a lean model with 1,500+ subcontractors in the database - winning the work as the main contractor, subbing it out, and running it as a system from a laptop across multiple countries. I write this site from what actually works.
@mointhemarket · 30k followers on Instagram →Run the model with people who already do
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