Discover how an Employer of Record (EOR) in India, backed by localized HR support, enables businesses to hire quickly and efficiently. With Employer of Record India expertise in compliance, onboarding, and local workplace requirements, it will ensure your business expansion is smooth and uninterrupted.
Quick Reference for EOR India Services:
India's GDP of ~$4.2 trillion and position as the world's 4th largest economy make it the primary growth engine for global business. An Employer of Record India eliminates the complexities of FEMA (Foreign Exchange Management Act) regulations and the upcoming 2026 Labor Code transition, ensuring your team is compliant from day one.
Navigating India's regulatory landscape in 2026 requires strict adherence to the Four New Labor Codes (fully effective as of late 2025). These codes have consolidated 29 archaic laws into four streamlined frameworks: Wages, Social Security, Industrial Relations, and OSH (Occupational Safety, Health).
Critical Compliance Area for EORs:
The Central Government revised the National Floor Level Minimum Wage effective October 2025. While states may set higher rates, EORs typically use these Central rates as the baseline for compliance.
*Note: Rates reflect the Central Sphere revision effective Oct 1, 2025. State-specific rates (e.g., Karnataka/Bangalore, Maharashtra/Mumbai) may vary slightly but cannot be lower than the floor wage.
The Occupational Safety, Health and Working Conditions (OSH) Code, 2020 allows for flexibility (e.g., a 4-day work week) provided the weekly hours do not exceed the statutory limit.
Indian leave laws are a mix of Central Mandates (Maternity) and State Rules (Shops & Establishments Acts).
An Employer of Record (EOR) India is a third-party service that legally employs your workers in India on your behalf. While you maintain functional control (day-to-day work, projects, and goals), the EOR handles all legal employment responsibilities:
Strategic Context for 2026: The EOR model is surging as India's working-age population is projected to cross 1 billion by 2030. With the government implementing the 4 New Labor Codes (simplifying 29 disparate laws into 4 consolidated codes likely in 2026), international companies are using EORs to navigate this massive regulatory shift without needing to build a dedicated local legal team.
In India, the EOR model serves as a "legal firewall" between your company and the complex Indian regulatory system. While you retain functional control, the EOR (acting as the legal employer) handles the rigorous compliance required by the 4 New Labor Codes and FEMA (Foreign Exchange Management Act) regulations.
Critical 2025 Compliance Note:
The EOR is legally responsible for TDS (Tax Deducted at Source) filing. In India, failure to deposit TDS on time attracts criminal liability. Your EOR must provide monthly proof of Challan (tax deposit) to ensure your company is not implicated in tax evasion.
India stands as the world's 4th largest economy and its fastest-growing major market. It offers access to a massive talent pool of ~610 million active workers, including the world's largest number of STEM graduates. The government's "Make in India" and "Digital India" initiatives have streamlined foreign investment, but regulatory compliance remains intricate for new entrants.
Market Overview (2025 Data)
Strategic Outlook:
With a median age of 28.8 years and a rapidly digitizing economy (driven by the India Stack and UPI payment network), India is unique among major economies.3 The government debt-to-GDP ratio is stabilizing, and the focus has shifted to high-value manufacturing (semiconductors, EVs) and Global Capability Centers (GCCs).
The choice between establishing a foreign subsidiary or partnering with an Employer of Record is a critical strategic decision. In 2026, the complexity of the New Labor Codes and stricter Bank KYC norms for foreign nationals has tilted the balance further toward EOR for sub-100 headcount teams.
The Reality of Entity Setup:
While the Ministry of Corporate Affairs (MCA) allows for rapid digital incorporation (1–2 weeks), the operational readiness timeline for a foreign subsidiary remains 3–4 months. This delay is driven by:
Strategic Comparison Table
The EOR implementation process in India follows a structured approach designed to ensure compliance while minimizing time-to-market. Leading providers have streamlined this process to deliver predictable outcomes within established timelines.
Selecting the right EOR provider requires systematic evaluation of compliance capabilities, local expertise, and service delivery standards. The complexity of Indian employment regulations and cultural considerations demands thorough due diligence.
Critical evaluation criteria include compliance track record verification, with top providers maintaining zero-penalty track records and providing transparent compliance reporting.
Working with your EOR partner, you'll define the employment structure that complies with Indian labor standards while meeting your business objectives.
Employment contracts in India must include specific mandatory elements such as employee personal information, detailed job responsibilities, compensation structure, working conditions, and termination procedures.
Once contracts are executed, the EOR manages comprehensive onboarding procedures ensuring immediate productivity while maintaining full regulatory compliance.
Continuous compliance management ensures ongoing legal adherence while providing reporting transparency and operational support.
India's payroll landscape underwent a historic transformation on November 21, 2025, with the implementation of the four New Labor Codes. Compliance now requires strict adherence to the "50% Wage Rule," which mandates that "Basic Pay" must constitute at least 50% of an employee's total Cost to Company (CTC).
The New Tax Regime is now the default system. It offers lower tax rates but fewer exemptions (no HRA or 80C deductions).
The New Labor Codes have impacted how "Wages" are defined for these calculations.
Three major changes are now in effect (since Nov 2025) that EORs must manage:
To ensure compliance with the Code on Wages 2019, salary disbursement deadlines are strict.
Employee Benefits & Culture
Foreign nationals seeking employment in India must obtain proper work authorization through India's immigration system managed by the Ministry of Home Affairs. The process involves multiple government agencies and requires careful coordination between visa applications and work permit approvals. Professional EOR providers offer comprehensive visa and work permit services to streamline this complex process.
India's visa system is strictly sector-specific. The Employment Visa (E-Visa) is the only valid route for regular payroll employment.
Since 2025, the FRRO (Foreigners Regional Registration Office) process is 100% digital ("e-FRRO"), eliminating the need for physical police station visits.
Immigration Costs (Estimates):
India's termination laws are highly regulated under the Industrial Disputes Act and the new Code on Social Security.
⚠️ Critical 2026 Update: The "2-Day Settlement" Rule Under the Code on Wages, 2019 (Section 17(2)), employers must pay all Full and Final (FnF) dues---including salary, leave encashment, and bonuses---within 2 Working Days of the employee's resignation, dismissal, or removal.
The India EOR provider market has expanded considerably, with both international and regional service providers competing to serve growing demand from technology companies, manufacturing firms, e-commerce businesses, and multinational corporations establishing Asia-Pacific operations.
AYP Group leads the India EOR provider market through its unwavering commitment to regulatory excellence, comprehensive advisory support, and complete price transparency. With extensive local expertise and a proven compliance track record in India's complex regulatory environment, AYP Group delivers unmatched peace of mind for companies expanding into this strategic market.
AYP's India operations combine cutting-edge technology with human expertise, providing real-time compliance monitoring while maintaining the personal relationships essential for successful Indian business operations.
Remote offers comprehensive EOR services in India through its global platform, providing standardized processes with local compliance expertise and multi-currency payroll capabilities suited to India's growing international business environment.
Deel provides EOR services in India through its digital-first platform, emphasizing speed and technology integration. Deel offers rapid onboarding capabilities, automated Indian tax calculations, and integrated contractor-to-employee conversion services.
Oyster HR delivers specialized EOR services with understanding of Cambodia's cultural dynamics and regional expansion strategies. Oyster provides bilingual contract support and cultural integration guidance for international teams working in Cambodia.
Globalization Partners offers enterprise-grade EOR services focused on large-scale manufacturing deployments and complex organizational requirements suitable for major production operations and regional manufacturing centers.
Evaluating EOR service providers in India requires systematic assessment of:
Successfully implementing EOR services in India requires careful planning, clear communication, and attention to both regulatory requirements and cultural considerations.
Define your hiring needs clearly, including specific roles, timelines, and budget parameters. Research EOR providers thoroughly, comparing services, pricing, and local expertise while checking references from clients with similar India operations.
Understanding and respecting Indian business culture significantly enhances employee integration and retention. Indian workplaces emphasize respect for seniority and management hierarchy, requiring sensitivity to organizational dynamics and communication styles. For insights on structuring effective leave policies that respect local practices, consider reviewing leave policy frameworks that can be adapted for the Indian market.
Provide language support where needed and recognize local festivals to demonstrate respect for cultural traditions. Offer flexible hours during festival seasons and understand regional variations in business practices.
Monitor monthly payroll accuracy and compliance through regular reviews with your EOR provider. Conduct quarterly compliance checks to stay updated on regulatory changes while maintaining annual contract reviews to update terms and compensation structures.
Track EOR service quality through performance monitoring and plan for expansion as your business grows in India's dynamic market environment.
AYP Group distinguishes itself in the India EOR provider market through its unique combination of guaranteed compliance, comprehensive advisory support, and complete price transparency---delivering unmatched peace of mind for businesses expanding into India's dynamic market.
AYP Group distinguishes itself in India through our Wholly Owned Local Subsidiary, ensuring you avoid the risks of "aggregator" EORs. We provide a Zero-Penalty Compliance Guarantee, backed by a legal team that is fully prepared for India's historic transition to the 4 New Labor Codes in 2026.
Our India operations combine cutting-edge technology with human expertise, providing real-time compliance monitoring while maintaining the personal relationships essential for successful Indian business operations:
India's economy is transforming rapidly, and businesses that thrive will be those who act fast, hire smart, and scale with agility. Partnering with an Employer of Record like AYP Group gives you a strategic edge---enabling you to unlock India's market potential quickly, legally, and cost-effectively.
The opportunity in India is clear: the world's fourth-largest economy offers exceptional growth potential, skilled workforce, and government support for international businesses. However, success requires navigating complex regulations while respecting local culture and business practices.
Take the next step in your India expansion with confidence:
Our India team combines deep local expertise with international best practices, ensuring your expansion succeeds from day one. Whether you're hiring your first employee in India or scaling an existing operation, we provide the compliance guarantee and cultural guidance essential for success.
"AYP Group transformed our India expansion by eliminating compliance concerns and providing transparent, predictable costs. Their advisory team's deep local knowledge helped us navigate complex regulatory requirements and cultural expectations while their zero-penalty guarantee gave us complete confidence in our India operations."
--- Technology Company CEO, expanding from Silicon Valley to Bangalore
Don't let regulatory complexity delay your India market entry. AYP Group's proven EOR India platform enables you to hire top local talent within days while maintaining full compliance with local employment laws.
Our commitment to transparency, compliance excellence, and client success makes us the preferred EOR provider for discerning businesses entering India's relationship-focused and culturally nuanced market.
Ready to unlock India's potential? Contact AYP Group today and discover how guaranteed compliance and transparent pricing can accelerate your business success in the world's largest democracy.
About AYP Group
AYP Group has been simplifying global employment across Asia for over a decade. Our India EOR services eliminate compliance complexity while accelerating your market entry with zero penalties guaranteed. Trust the experts who understand both the regulations and relationships that drive Indian business success.
Legal Disclaimer: This guide provides general information about Indian employment regulations and EOR services as per official sources including the Ministry of Labour & Employment, EPFO, and Ministry of Home Affairs. Specific legal advice should be obtained from qualified professionals. Employment laws and regulations are subject to change, and this information should not be considered as legal counsel. AYP Group
An Employer of Record (EOR) in India assumes the legal responsibilities for employees, allowing your business to hire talent without the need to establish a local legal entity.
The cost of hiring through EOR services in India typically ranges from USD 300 to USD 600 per employee per month, depending on the specific services provided.
Using an Employer of Record (EOR) in India backed by localized HR support, simplifies market entry and expansion, allowing you to focus on your core business while we manage HR compliance, payroll, and local regulations.
Several EOR service providers operate in India, including AYP. AYP offers comprehensive EOR solutions to help you hire, manage, and pay employees while ensuring full compliance, with no hidden costs for your peace of mind.
AYP’s onboarding process for employees in India includes:
AYP Employer of Record (EOR) in India has local support that ensure the employment practises align with the local laws, as such, the local EOR employees will have complete peace of mind to avoid any legal risks and penalties.
Also, our local HR support can provide a faster and seamless response for your local employees to have a better employee experience.
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