Doing Business in India with a PEO/EOR
With 1.2 billion people and a rapidly growing population, India is proving itself to be an attractive destination for foreign investors looking for a combination of strong market opportunities, well-educated candidates, and high value throughout the supply chain. India’s technology, manufacturing, financial services, and engineering industries are booming, yet it continues to attract a diverse pool of investors.
That said, doing business in India can be complex without adequate guidance from local experts. Companies considering expansion into India should look into partnering with a professional employer organization (PEO) or employer of record (EOR) to facilitate hiring, managing, and terminating staff in the country. Read on to discover the benefits of using a PEO/EOR in India and to get rankings of the best PEO providers.
Why Use a PEO/EOR in India?
With a legal system largely based on that of the British, there is a degree of familiarity with aspects of the regulatory environment in India for many investors. Yet in the years since independence, India has, of course, infused into that system its own cultures and societal expectations, which may not be as familiar.
Using a PEO/EOR is one means of overcoming this issue. A PEO/EOR can manage all aspects of the employment process – many offer recruitment of staff, too – from having contracts written up in local languages to managing any conflicts that may arise. Best of all, PEOs/EORs handle everything in a compliant manner, relieving the investor of considerable administrative efforts.
Best PEO & EOR for India
One of Asia’s leading global PEO/EOR providers, Horizons, offers an end-to-end solution that can facilitate rapid labor dispatch and employment in India, without the need to set up a local entity. The company facilitates rapid market entry in India, hires individual staff members or teams on a company’s behalf, and takes care of all administrative and compliance issues.
Horizons has been operating and providing EOR services in India since 2017. Using their services can help new businesses gain a foothold in a complex Indian market while postponing the necessity of legal entity setup.
As they’re many providers in the market, GlobalizationPedia has identified some of Horizons’ key advantages compared to other players in the growing global EOR/PEO space:
- Horizons owns a fully licensed, legal entity in India and does not subcontract to a third-party (which many major India EORs do).
- They’re the Singapore Chamber of Commerce‘s official EOR partner in India.
- Horizons has a physical presence in India with an office and a team of experts in Delhi, in addition to their offices abroad in Austin, Toronto & Berlin.
- Horizons’ India team are truly HR experts, with more than 500 successful employee onboardings within the last two years.
- Flexible & scalable pricing, and flexible contract terms without long-term commitments.
- An efficient HR management platform with a dedicated technical support team onsite.
Get in touch with Horizons.
➜ When you hire your first employee with Horizons in India and use the code GlobalPedia, you’ll get the first month of EOR/PEO services for free!
A large corporation with a global presence, Global PEO is a reliable and well-connected PEO/EOR offering services in India. Common situations that Global PEO handles include converting an Indian contractor into an employee, setting up compliant means of outsourcing work, and providing interim hiring solutions while setting up an entity in India.
With Global PEO expansive international network, they can get staff in place in India within a matter of days.
Sky Executive is a company with extensive experience in helping international companies expand into India. Based in Pune, India, Sky Executive helps companies to set up their operations in India. In particular, it helps companies to outsource departments, projects, or tasks to a highly trained staff in India and benefit from the significant cost-efficiencies that may bring.
Sky Executive offers services in relation to setting up an office, hiring staff, payroll and tax compliance, and managing employees on a day-to-day basis, making them suitable for companies that want to hand off all management of the staff in India.
Why are Deel, Remote, or other companies missing?
Deel, Remote, and other market-leading EORs are fine companies – but they may not be the best choice for hiring in India due to several factors:
- Such companies often prioritize hyper-growth, driven by investor demands for rapid expansion, over ensuring compliance with local regulations and protecting the interests of their customers. This can lead to potential legal and financial risks for companies utilizing their EOR services.
Example: A company focused on hyper-growth might encourage employers to hire de-facto employees as contractors, opening the client up to employee misclassification risk unnecessarily. In other cases, clients & their employees could be neglected if ‘hypergrowth’ company KPIs did not align with client interests.
- In the past, we’ve seen that such ‘young & tech-driven’ providers may not meet the necessary license requirements for providing EOR services in India – as may take years to apply for – further jeopardizing compliance.
Example: In some cases, it’s related to knowledge of policy (e.g. the requirement for employees to have a PAN card to make tax contributions, which takes roughly 1 month to get; or even the 13th-month salary regulations). In other cases, this is related to knowledge of the culture; for example, having a partner that knows how to advise companies on how Indian employees negotiate salary (as ‘cost-to-company’ rather than gross salary). Regardless, having a partner with deep country knowledge will save your company time, hiring costs, and hassle.)
- Relying on a virtual-only support team can make it challenging to address any issues or concerns that may arise, potentially causing delays or disruptions in operations.
Example: If there are no local support staff in-country, your India employees may be left without answers to their important questions. If you go with a company that outsources their support staff to another time zone or to non-HR specialists, you risk losing candidates, or even worse, employees.
As such, it is recommended to carefully evaluate EOR providers based on their track record of compliance, experience in India, and support capabilities, rather than solely on their growth and pricing potential. Before you engage any India PEO or India EOR, make sure to ask specific, detailed questions to make sure you’re dealing with real experts.
It’s fair to say that India can be a challenging market to expand into and hire in due to complex labor laws, bureaucracy, and cultural differences. Hiring and managing employees in India can be time-consuming and expensive, with various legal and regulatory requirements that must be met. Additionally, there are cultural differences and language barriers that can create communication challenges.
An Employer of Record (EOR) can help companies overcome these challenges by acting as the employer on record, handling payroll, taxes, benefits, and other administrative tasks. This allows companies to focus on their core business functions while the EOR handles the compliance and regulatory aspects of hiring and managing employees in India.
Overall, working with an EOR can simplify the process of expanding into and hiring in India and mitigate the risks associated with non-compliance with labor laws and regulations.
If your company is interested in expanding your operations into India, GlobalizationPedia can connect you with an EOR / PEO that best fits your needs at a cost-effective price. Fill out the form today and we’ll use our extensive database of strategic partnerships to provide you with a full rundown of the best potential PEO matches for your company.
Frequently Asked Questions (FAQs)
It’s common in India to grant open-ended (indefinite) employment contracts. Fixed-term contracts can be offered upon request, but are rather uncommon in India. They should only be used for specific project or contract workers.
Keep in mind that in India, a salary package is negotiated based on a Cost To Company (CTC) basis.
This includes all costs incurred by the employer (monetary and non-monetary) before taxes such as:
- Fixed compensation = “base salary” or “gross salary”
- Variable cash incentives
When selecting an EOR of choice, you can check if the person you’re speaking to is aware of this. They should be!
As I’m sure you’re aware, there’s no single answer for this. Nevertheless, we’ve seen providers such as Globalization Partners charge $800+ per employee per month.
Make sure to check with providers such as Horizons to get a better deal.