1. What is an EOR?
An Employer of Record (EOR) is a third-party organization that legally employs workers on your behalf in India. The EOR handles all employment compliance — contracts, payroll, taxes, benefits — while you manage the employee's day-to-day work.
2. Why Use an EOR in India?
India's labor laws vary by state, and employment compliance requires local expertise. An EOR lets you hire quickly without incorporating a legal entity, test the market before committing to a subsidiary, and stay fully compliant from day one.
3. EOR vs Subsidiary: When to Switch
EOR is ideal when you have fewer than 15-20 employees, are testing the India market, or need to hire quickly. Once you have a stable team and long-term commitment, a subsidiary often makes more financial sense. I help clients navigate this transition at the right time.
4. Typical Costs
EOR fees in India typically range from $200-600 per employee per month, depending on the provider and services included. Compare this to the $5,000-15,000 cost and 2-4 month timeline for subsidiary incorporation.
5. Legal Framework
Indian EOR arrangements operate under the Contract Labour (Regulation and Abolition) Act, 1970, and various state-specific Shops & Establishments Acts. The EOR is the legal employer, responsible for PF, ESI, professional tax, and TDS compliance.
6. Choosing an EOR Provider
Key factors: local presence and expertise, compliance track record, transparent pricing, employee experience, and transition support if you later set up your own entity.
Need Help With Your EOR Setup?
I help international companies evaluate EOR providers, set up compliant employment, and transition to subsidiaries when the time is right.
Let's Talk