India is prioritizing workforce formalization and digital governance in 2025, bringing new rules and regulations around employment. For both foreign and domestic employers, a clear understanding of hiring employees—across sectors, contract types, and legal jurisdictions—is essential to ensure compliance and maintain profitability.
Before hiring employees, companies need to decide on their mode of operation in India. They can either establish their own legal entity or collaborate with an Employer of Record (EoR).
Establishing a subsidiary, typically as a private or public limited company, remains a common route for foreign businesses long-term operations in India. The setup involves securing several approvals, such as the following:
An alternative route to hiring an employee in India is through an EoR, also known as a Professional Employment Organization (PEO). An EoR allows companies to legally hire employees in India without setting up a local entity in the country. The EoR serves as the legal employer, handling all statutory obligations, like tax...
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