MigRizo TeamIn this guide8 sections
The most common question we hear from founders is simple: can we hire in India without opening a company there? The answer is yes, and most startups do exactly that for their first hires.
Here are your three options, how the most popular one works step by step, how long it takes, and the questions to ask before you choose a provider.
Your Three Options
Engage a Contractor
The person invoices you for their work. Fast and flexible, and right for clearly scoped work. Not the right fit for someone who will work like a full-time employee.
Employ Through an EOR
An Employer of Record with its own Indian entity becomes the formal employer. You direct the work; they handle the contract, payroll and compliance.
Set Up Your Own Company
Full control, but it takes months, needs at least one director resident in India, and brings ongoing accounting, tax and payroll duties.
If you are weighing the first two, our guide to contractor or employee in India explains the tests that decide which one a role really is.
How an Employer of Record Works
- 1
You choose the person
Agree the role, pay and start date, exactly as you would with any hire.
- 2
The contract is issued
The EOR issues an employment contract that meets Indian law and assigns the work to your company.
- 3
Onboarding
Identity, tax and bank details are collected, and benefits are set up.
- 4
Monthly payroll
Each month the EOR pays the person in rupees, pays statutory contributions and sends you one invoice.
- 5
Changes and exits
Leave, raises, notice and endings are handled under Indian rules.
How Long It Takes
With an Employer of Record, the paperwork itself often takes a few days to two weeks. The real constraint is usually the person's notice period at their current job, which is commonly 30 to 90 days for experienced engineers. Plan your start date, and any handover on your side, around it.
What an EOR Takes Off Your Plate
Contracts
An Indian employment contract, with confidentiality and intellectual property assigned to you.
Payroll in Rupees
Paid on time every month, with tax deducted at source.
Statutory Contributions
Provident Fund and the other contributions the law requires.
Leave and Notice
Holidays, leave and exits handled under Indian employment rules.
The cost of all this is usually a monthly fee on top of salary. Our guide to what it really costs to hire a software engineer in India shows how it compares with the other routes.
Prepare for the First Day
The contract is only half of a good start. Use the notice period to get everything ready, so your new hire is productive in their first week, not their first month.
Ready before day one
- Laptop, accounts and access to the tools and code they need.
- A named buddy on the team for the first few weeks.
- A first task that can ship within the first week or two.
- The agreed shared hours in everyone's calendar.
- A 30-day check-in to talk about how it is going, both ways.
When Your Own Entity Makes Sense
- You plan a large team in India over several years.
- You need a local presence for sales, contracts or regulatory reasons.
- You are ready to run Indian accounting, payroll and compliance yourself, or pay advisers to.
Many companies start with an Employer of Record and move to their own entity later, once the team is large enough to justify it.
Details That Are Easy to Overlook
- Public holidays. India's holidays differ from yours. Agree which the person observes, and plan releases around them.
- Probation. Many Indian employment contracts include a probation period. Agree its length and notice terms up front.
- Equipment ownership. Decide whether the laptop is provided by you, the EOR or the person, and what happens to it at the end.
- Currency of pay. Salary is paid in rupees; agree whether the figure is fixed in rupees or set in USD and converted.
Questions to Ask Any Provider
Before you sign
- Who is the legal employer or contracting party, and in which entity?
- What exactly is included in the monthly figure, and what costs extra?
- How is intellectual property assigned to my company?
- How are people vetted before I see them, if the provider also finds talent?
- What happens if the hire does not work out?
Common questions
Can a foreign company hire employees in India without an entity?
Yes. A foreign company can hire in India through an Employer of Record, which is the legal employer on its behalf, or engage people as independent contractors. Neither requires registering a company in India.
What is an Employer of Record in India?
An Employer of Record is a company with its own Indian entity that formally employs people for you. It handles the employment contract, payroll in rupees, statutory contributions and compliance, while the person works on your team.
How long does it take to hire through an EOR in India?
The contract and onboarding usually take a few days to two weeks. The person's notice period at their current employer, often 30 to 90 days, is normally what sets the start date.
Key Takeaways
- 1
A foreign company does not need its own Indian company to hire someone in India.
- 2
There are three options: engage a contractor, employ through an Employer of Record (EOR), or set up your own Indian company.
- 3
An Employer of Record is the legal employer in India. It runs the contract, payroll, statutory contributions and compliance, while the person works on your team.
- 4
The paperwork through an EOR takes days to a couple of weeks. The person's notice period at their current job usually sets the real start date.
Official sources
- Ministry of Corporate Affairs, Government of India
- Employees' Provident Fund Organisation (EPFO)
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