India’s booming talent pool and cost advantages have made it a hotspot for global hiring. But entering the Indian market comes with its own set of regulatory, tax, and HR challenges. For international businesses that want to hire in India without setting up a legal entity, an Employer of Record (EOR) offers the ideal solution.
This blog walks you through how an EOR works in India, the advantages it offers, and why it’s become a go-to strategy for global companies in 2025.
What is an Employer of Record in India?
An Employer of Record (EOR) in India is a third-party service provider that legally employs individuals on behalf of a foreign company. While you manage the employee’s daily work responsibilities and output, the EOR handles all backend employment functions, including:
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Issuing offer letters and compliant contracts
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Managing payroll and statutory deductions
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Administering taxes and social security
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Handling employment benefits like PF, ESIC, and gratuity
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Complying with India’s labor laws and regulatory filings
In essence, the EOR becomes the legal employer on paper, while you remain the operational manager of the employee.
Why Use an EOR in India?
✅ Bypass Entity Setup
Setting up a company in India involves lengthy documentation, approvals from the Reserve Bank of India (RBI), compliance with FEMA guidelines, and registering with various tax authorities. An EOR removes this hurdle entirely.
✅ Stay Compliant With Local Laws
Indian labor laws can vary by state and are governed by multiple acts—from the Payment of Wages Act to the Maternity Benefit Act. A good EOR stays up to date with all legal changes and ensures end-to-end compliance.
✅ Focus on Productivity
With HR, legal, and payroll taken care of, you can focus on business growth and team performance—without worrying about backend operations.
✅ Hire the Best, Anywhere in India
Whether your candidate is in Mumbai, Bangalore, Hyderabad, or a Tier-2 city, EORs have local infrastructure to onboard and manage talent across the country.
What Does an EOR in India Typically Handle?
Area | Tasks Handled |
---|---|
Onboarding | Contract creation, document collection, induction |
Payroll | Salary calculation, payslip generation, tax deduction |
Compliance | EPF, ESIC, TDS, professional tax, labor law filings |
Benefits | Gratuity, health insurance, leave tracking |
Termination | Notice period management, full & final settlement |
These responsibilities ensure a fully compliant, smooth employment lifecycle for both employee and employer.
Common EOR Use Cases in India
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Hiring remote software developers or engineers
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Expanding to new regions before entity setup
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Launching a short-term project with local staff
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Testing market potential before committing resources
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Hiring contractors who need full-time conversion
Tax & Compliance Considerations for EOR Employees in India
An EOR in India must ensure:
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Timely deposit of Provident Fund (PF) contributions (12% employer share)
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Deduction and filing of Tax Deducted at Source (TDS)
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Professional Tax deductions where applicable
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ESIC benefits for employees earning below ₹21,000/month
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Coverage under the Gratuity Act for employees with over 5 years of service
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Leave policy aligned with Indian norms (casual, sick, earned leave)
Failure to comply can result in heavy penalties, reputational damage, and legal action—risks that an EOR shields you from.
Why Asanify is the Preferred EOR in India
Asanify is a trusted EOR partner for global companies looking to hire in India. Here’s why businesses choose us:
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Compliant onboarding in <48 hours
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Fully automated payroll with real-time dashboards
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Transparent pricing with no hidden fees
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Access to HR and legal experts
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Easy integration with accounting platforms
We combine local expertise with a global mindset—ensuring your team in India is supported, compliant, and productive from Day 1.
Final Thoughts
India offers access to a highly educated, English-speaking workforce at a fraction of Western labor costs. But hiring directly without a legal entity exposes you to compliance risks. An Employer of Record in India allows you to legally employ Indian professionals while keeping your business agile and risk-free.
If you’re looking to expand into India in 2025, partnering with an EOR like Asanify will save you time, cost, and legal headaches—while ensuring your employees are onboarded and managed seamlessly.
Start hiring in India today—without the red tape.
Reach out to Asanify to explore our end-to-end EOR services.