Speed
Incorporating a private limited company involves director requirements, registrations and bank setup, and typically takes weeks. With an EOR, a new hire can start within days.
Best EOR services in India: the complete Employer of Record guide
How to hire employees in India without setting up an entity: how an Employer of Record works, what it costs, EOR vs PEO, which laws apply, and how to pick a provider you won't outgrow.
What is an Employer of Record (EOR) in India?
An Employer of Record is a registered Indian company that becomes the legal employer of your India-based staff on your behalf. It issues employment contracts, runs payroll, pays PF, ESI, professional tax and TDS, and maintains statutory records. You choose the people and direct their work; the EOR carries the legal and administrative responsibility. You can hire in India without setting up your own company first.
Why companies use an EOR in India
India has deep engineering, product and support talent. The obstacle is the legal setup around hiring it.
Lower risk
Paying staff as contractors when they work like employees can create misclassification issues, and a poorly structured presence can raise permanent establishment questions. An EOR employs them properly under Indian law.
Test before you commit
Trial a market with one or two hires, then scale. When you're ready, move to your own entity.
No local expertise required
Labour rules differ by state and change over time. Your EOR tracks them so you don't have to.
What an EOR in India handles for you
A full-service EOR covers the entire employment lifecycle.
Contracts and onboarding
Compliant employment agreements, offer letters, background verification and IP and confidentiality clauses.
Payroll and payslips
Accurate monthly payroll in INR, payslips, reimbursements and full-and-final settlements.
Statutory compliance
PF, ESI, professional tax, TDS, gratuity, labour welfare fund and periodic returns.
Benefits and leave
Leave policy, health insurance, maternity and statutory benefits, attendance administration.
Hardware and workspace
Laptops, equipment and desks, where the provider has local teams. Ask whether this is included.
Offboarding
Notice periods, resignation handling, asset recovery, experience letters and exit compliance.
How EOR works in India, step by step
Scope the hire
Share the role, salary, location and start date. The EOR confirms compliance and prepares a cost estimate.
Sign the service agreement
You sign a service agreement with the EOR covering fees, responsibilities and exit terms.
Employee is onboarded
The EOR issues the employment contract, completes KYC and registrations, and sets up payroll.
Employee works for you
You assign tasks and manage performance day to day. The EOR remains the legal employer.
Monthly payroll and invoicing
The EOR pays salary and statutory dues, then invoices you for actual employment costs plus its fee.
EOR vs own entity vs contractors
Each model suits a different stage of growth.
| EOR | Own Indian entity | Independent contractor | |
|---|---|---|---|
| Time to start | Days | Weeks to months | Days |
| Legal employer | The EOR | Your subsidiary | None (self-employed) |
| Compliance burden | EOR | You | Low, but misclassification risk |
| Upfront setup | Minimal | Incorporation and ongoing filings | None |
| Best for | Testing the market, small to mid teams | Larger, long-term teams | Short projects with independent scope |
Rule of thumb: EOR for speed and low risk, an entity when your team is large and stable, contractors only for genuinely independent work.
EOR vs PEO in India
A PEO (professional employer organisation) is a co-employment model mainly used in the United States, where the PEO and your company share employer duties. India has no formal PEO category. The comparable arrangements are an EOR, where a local entity is the sole legal employer, and payrolling for staff you already found.
If a provider offers "PEO in India", ask who signs the employment contract and who is liable for statutory filings.
Indian employment compliance explained
Key obligations your EOR should manage. Rates and thresholds change, so confirm current figures with your provider or a qualified advisor.
| Obligation | What it is |
|---|---|
| Provident Fund (EPF) | Retirement savings scheme with employer and employee contributions, generally 12% of wages each, administered by EPFO. |
| ESI | Health and social insurance for employees under the applicable wage ceiling, funded by employer and employee contributions. |
| Professional tax | State-level tax on employment, deducted from salary. Rates and rules vary by state. |
| TDS on salary | Employer deducts income tax at source under the Income-tax Act and files quarterly returns with Form 16 issued annually. |
| Gratuity | Payable to eligible employees after qualifying service, calculated on last drawn salary and years served. |
| Leave and welfare | Shops and Establishments rules, paid leave, maternity benefits, and POSH policy where applicable. |
| Labour Codes | India's four consolidated Labour Codes (wages, industrial relations, social security, occupational safety) reshape wage definitions and compliance. Your EOR should be aligned with them. |
| Notice periods | One to three months is common for skilled roles. Plan your start date around the candidate's notice, and set notice and termination terms in the contract. |
| Employment contracts | Should cover role, pay structure, confidentiality, IP assignment, notice and termination, and be signed before day one. |
Permanent establishment (PE) risk when hiring in India
An EOR does not automatically remove tax exposure for a foreign company. Whether your business creates a taxable presence in India depends on what your people actually do there.
- Higher risk: staff who negotiate or conclude contracts on your behalf, or act as a dependent agent.
- Lower risk: engineering, design, support and back-office work delivered to you.
- Check any tax treaty between India and your country, and get written tax advice before the first hire.
How much does an EOR cost in India?
EOR pricing usually has two layers: the provider's fee, and the actual cost of employment.
- Provider fee: typically a fixed monthly fee per employee, sometimes with a one-time onboarding fee.
- Employment cost: gross salary, employer PF and ESI, gratuity provisions, insurance and other benefits, billed at actual cost.
- Optional extras: hardware, workspace, recruitment and entity setup.
Monthly client cost = gross salary + employer statutory contributions + agreed benefits + EOR service fee + applicable taxes. Actual amounts depend on salary structure, location and the signed proposal.
Avoid percentage-of-salary fees that grow as you promote people, and ask for a written breakdown of every charge. AnyWorks publishes its fees openly: see EOR pricing.
How to choose the best EOR in India
"Best" depends on your needs, but these criteria separate strong providers from weak ones.
Own Indian entity
Confirm the provider employs directly through its own registered entity, not by reselling another EOR.
HR and compliance depth
Look for a team led by HR professionals who handle multi-state statutory rules daily.
On-the-ground presence
Local offices and staff for hardware, workspace and employee support beat portal-only services.
Transparent pricing
Fixed, published fees with pass-through costs shown clearly. No hidden markups.
Exit and entity path
Written terms for migrating employees to your own entity, with no lock-in or poaching clauses.
Verifiable references
Ask for client references, registration details and sample payroll and compliance reports.
Moving from EOR to your own Indian entity
Most companies use an EOR as a starting point. Once headcount, revenue and commitment are clear, many set up an Indian subsidiary (commonly a private limited company) and transfer employees to it.
A good migration keeps salaries, service continuity and statutory records intact, and is planned before the first hire. AnyWorks builds this path into every engagement, with entity setup and employee migration offered as separate, clearly priced services.
Payroll outsourcing, staff augmentation and recruitment
EOR is one model. AnyWorks also covers the other ways foreign employers build teams in India.
Payroll outsourcing for foreign companies
Already have staff or a branch in India? We run monthly payroll, payslips, Form 16 and PF, ESI, professional tax and TDS returns. Ask about payroll only.
IT staff augmentation in India
Add vetted engineers, QA and data specialists to your team on contract or permanent terms, employed through our EOR. Manpower supply for non-technical roles is available too. Request profiles.
Recruitment and staffing
We source, screen and shortlist, then employ your chosen hire. Explore recruitment.
Hiring in India from the US, UK, UAE, Germany, Japan and beyond
Time zones, regulation and priorities differ by market.
United States
India is 9.5 to 10.5 hours ahead, so plan a staggered day or a handoff model. Watch contractor misclassification and PE risk.
United Kingdom
4.5 to 5.5 hours apart gives a usable morning overlap. UK data protection rules apply to data moved to India, so agree data terms early.
United Arab Emirates
Only 1.5 hours apart, with talent familiar with Gulf business culture. Popular for sales, finance and operations roles.
Saudi Arabia
India is 2.5 hours ahead. India suits technology and back-office capacity while Saudization requirements stay with your in-kingdom workforce.
Germany
Expect works-council and GDPR conversations. India offers engineers at scale where local hiring is slow, with a workable overlap.
Japan
Look for bridge engineers with Japanese language ability and strong process discipline. India is 3.5 hours behind Japan.
Australia
India's mornings meet Australian afternoons. Often used to extend small tech and finance teams cost-effectively.
Singapore
2.5 hours apart. A common pattern is leadership in Singapore with delivery teams in Bengaluru, Hyderabad or Chennai.
Hire software developers and other roles in Bengaluru, Hyderabad, Pune and more
State rules such as professional tax and shops and establishment requirements are applied by work location.
Bengaluru
Deepest pool for software, data and AI, and the most competitive salaries.
Hyderabad
Strong in enterprise software, cloud and pharma-tech.
Pune
Engineering, embedded and automotive software.
Mumbai, Delhi NCR, Chennai, Indore
Finance, sales and customer roles, manufacturing engineering, and lower-cost tech hiring.
Roles we recruit and employ: software engineering, data and AI, DevOps, QA, product and design, support, sales, marketing, finance, HR and operations. Salary ranges vary by city, skill and seniority and are shared when we scope your requirement.
CAD drafters and millwork designers for US and Canadian firms
Extend your design office with drafters who work in your standards, your software and your time window. Start with one or two on a pilot project, review quality, then scale.
- Millwork and cabinetry shop drawings
- CAD drafting and design (CAD drafting outsourcing India)
- CAD/CAM and mechanical design engineering
- Manufacturing and production design
Why AnyWorks
India-based, founded by HR professionals, with offices in Indore, Ahmedabad, Chennai and Gurgaon. Read more about us.
17+Years of founder HR experience
200+Professionals supported across India
30+Global partner companies
48hrAverage onboarding turnaround
Frequently asked questions about EOR in India
What is an Employer of Record (EOR) in India?
An EOR is a local company that legally employs your India-based staff on your behalf. It signs the contracts, runs payroll, pays PF, ESI, professional tax and TDS, and keeps records, while you direct the day-to-day work.
Do I need an Indian company to hire through an EOR?
No. Your employees are on the EOR's payroll under its Indian entity, so you can hire without setting up your own subsidiary.
How long does it take to hire through an EOR in India?
Days rather than the weeks or months needed to incorporate. AnyWorks averages 48 hours from a signed agreement and candidate details.
How much does an EOR cost in India?
Providers usually charge a monthly fee per employee, sometimes with an onboarding fee. Salary, statutory contributions and benefits are passed through at cost. Ask for the full fee structure in writing, or see our pricing.
Can I move my employees to my own Indian entity later?
Yes, if your provider supports it. Choose one that offers entity setup and employee migration with clear terms and no lock-in.
Is EOR legal in India?
India has no dedicated EOR statute. The model works through a registered Indian employer that complies with labour, tax and social security laws, with your company directing the work under a service agreement. Confirm the structure with your legal and tax advisers.
How do I hire employees in India without an entity?
Use an Employer of Record. It employs your staff under its Indian entity and handles contracts, payroll and statutory filings while you direct the work.
What is the difference between EOR and PEO in India?
PEO is a co-employment model mainly used in the US. In India the comparable arrangement is an EOR or payrolling model where a local company is the sole legal employer.
Does using an EOR create permanent establishment risk in India?
Not automatically, but it is not risk-free. It depends on what your India-based staff do, especially negotiating or concluding contracts. Take tax advice before hiring.
What notice period should I expect when hiring in India?
One to three months is common for skilled roles, so the candidate notice period is usually the biggest driver of the real start date.
Do you offer IT staff augmentation and payroll outsourcing in India?
Yes. AnyWorks supplies engineers and other staff under EOR employment and runs payroll-only services for foreign companies with existing Indian operations.
Who owns the work and IP created by EOR employees?
Your contracts can assign IP created in the course of employment to you. Confirm this clause in the service agreement and employment contract.
Ready to hire in India?
Tell us about your planned India workforce and we'll prepare a clear EOR cost breakdown based on your employee compensation, locations and service requirements.