When to work with an Employer of Record in India?

An Employer of Record (‘EOR’) is an outsourced service provider that enables employers to hire employees from across borders without setting up a legal entity there. It takes over tasks like cross-border recruitment, payroll management, and regulatory compliance on its shoulders. All that the employer is left to do is manage their remote employees’ performance.

In what scenarios, would you benefit from working with an EOR in India? Let’s find out -

1. When there aren’t enough skilled people around you. Or they are too expensive

“We see that India has such a pool of professional talent that we need in Finland. We need more workforce, we need talent, we need professionals, skilled people…”

- Finnish Minister of Economic Affairs and Employment, Tuula Haatainen

India is a country with a talent surplus. Its population is raging with aspiration, is digitally sound, and culturally savvy. It is home to the world’s largest youngest workforce. 47% of Indians, i.e., ~650 million, are below 25 years of age. Every one in five people below 25 is from India. 

Most of this young lot is fluent in English-a key prerequisite for business communication in the modern day. Aside from English, Indians are keen on learning other foreign languages such as Japanese, French, Spanish, etc.

Add to it the fact that, compared to their Western counterparts, Indians have, so far, charged less while still providing A+ quality services. (Given their demand in the talent market, however, their rates are fast catching up).

Using the services of an Employer of Record service provider such as Expat Orbit you can set up remote teams in India and build your pipeline of young, agile, and skilled workers who are also cost-effective.

2. Planning to enter India via the liaison office route? Consider working with an EOR first

Liaison office in India comes with a lengthy opening process, year-round compliances, the condition to not undertake any commercial activities, and a limited shelf life.

Compare this with an EOR

You sign a contract with your EOR partner and start building your remote team in India. It’s as simple as that. The activities that you can undertake when working with your remote workforce in India go beyond basic market research. Your EOR partner handles your employer-related compliance in India. There is no need to get your books of accounts audited because you don’t need to maintain those in the first place.

An EOR like Expat Orbit provides businesses with the flexibility to test the Indian market without the need to commit to complex compliance and paperwork. It streamlines the entire process while providing benefits such as increased agility, cost savings, and quicker exits when needed.

3. When you already have a liaison office in India and it’s nearing its closure

A Liaison office comes with a pre-defined life term. It ranges from 2-3 years. After a lengthy extension process, it can last for another 2-3 years.

The thing is, your work doesn’t come with a pre-defined life term. So if you are not confident about setting up a full-fledged legal entity in India, and your liaison office is due for closure, you can work with an EOR. This ensures continuity of operations sans any legal and regulatory hassles.

4. When you can’t establish a subsidiary just yet

An EOR in India lets you work with Indians, without establishing a subsidiary here. 

For context, as per the World Bank, this is the time, cost, and efforts involved in setting up a legal entity in India-

• Type of legal entity: Private Limited Company
• Number of registration procedures: 10
• Average time for registration: 18 days
• Estimated time for setting up a company (total): 16 weeks
• Registration fees: approx. USD 188
• Minimum capital requirement: none (INR 100,000 optional)

In what cases working with an EOR in India be unsuitable for you?

1. When the number of employees you want to hire is very high - the cost-benefit analysis may not work out here.
2. When the work that you’re involved in can’t be done remotely
3. When you have tested the Indian market and are 100% confident about setting up your subsidiary here.
4. When you don’t want to expand your operations to India - the fastest-growing major economy in the world.

Expand your operations to India using Expat Orbit’s EOR solution 

Expat Orbit’s EOR solution can provide your business with an extricable way to enter the Indian market without having to commit to full-fledged incorporation. 

Streamline your talent acquisition process. Get access to one of the largest talent pools and one of the fastest-growing economies in the world. All this while saving on administrative and compliance costs and remaining compliant with Indian employment and labor laws.