An Employer of Record (EOR) — sometimes called a Professional Employer Organization (PEO), though the two are technically distinct in some markets — is the cleanest way for a foreign company to put Indian engineers on payroll without incorporating an Indian entity. The EOR is the legal employer on paper; you are the operational employer in practice.
What an EOR carries for you
- Employment contract — the engineer signs with the EOR, not with your foreign company.
- Indian payroll — gross salary in INR, statutory deductions (PF, ESI, PT, TDS), net pay to the engineer's bank account.
- Statutory filings — PF ECR monthly, ESI monthly (if applicable), PT in every state of operations, TDS Challan 281 monthly, quarterly 24Q TDS return.
- Year-end Form 16 (or Form 130 from FY 2026-27) issuance to the engineer.
- PoSH committee, group health insurance, gratuity provisioning.
- Exit handling — full and final settlement, UAN transfer.
What you retain
- Day-to-day management — your team, your standups, your roadmap, your performance reviews.
- Compensation decisions — what to pay, raises, bonuses, ESOPs from your foreign parent.
- Hiring and firing decisions — the EOR executes; you decide.
- Equipment and tooling — laptop, Slack, GitHub, all yours.
- IP ownership — the EOR's contract assigns IP to your foreign company.
How the billing works
Each month the EOR sends one invoice in USD (or your home currency) covering: (1) the engineer's gross salary converted at the agreed FX rate, (2) employer-side statutory contributions (PF, ESI, gratuity provision), (3) the EOR's service fee, (4) any pass-throughs (insurance premium, perks). You wire one payment in USD; the EOR disburses INR to the engineer's account and remits statutory deposits to the government.
Dedicated consultant included on every EOR engagement
FastLegal's EOR plan includes a named CA-qualified consultant per workspace — not a ticket queue. They handle PF, ESI, PT, TDS, Form 16, exit handling and any edge cases that arise. Your CFO gets one monthly USD invoice; the entire Indian compliance layer is invisible.
When EOR is the right model
- 1-15 Indian hires and growing.
- You don't have an Indian entity yet and don't want one in the next 6-12 months.
- You want to test the Indian market before committing to subsidiary setup.
- Speed matters — EOR can onboard your first engineer in 7-10 working days vs. 45+ days for full subsidiary setup.
When EOR is NOT the right model
- 30+ Indian hires — per-employee fees compound; subsidiary becomes materially cheaper.
- Complex ESOP plans where parent-equity-via-EOR creates cap-table complications.
- Physical office or in-person culture critical — EORs typically can't lease office space for you.
- Sensitive IP where multi-layered employment relationships create due-diligence concerns at acquisition.
Frequently asked questions
Is EOR legal in India?+
Yes — EORs operate as licensed Indian companies under their own PF, ESI, PT and TAN registrations. The arrangement is standard and well-tested.
Who does the Indian engineer think they work for?+
Operationally, you. Legally and on their payslip, the EOR. Most EORs let you co-brand the offer letter so the engineer sees both names.
Can the EOR sponsor visas for our engineers to visit the US?+
B-1 business visa support letter, yes. H-1B / O-1 must be sponsored by the US entity, not the EOR.
What happens to the engineer when we migrate to our own subsidiary?+
Smooth migration with continuous service — same start date, same UAN, same PF balance, same gratuity tenure. Usually done on the 1st of a calendar month with zero gap in pay.
Stop reading circulars. Start running clean payroll.
Every FastLegal plan ships with a dedicated payroll consultant — a real human who runs your PF, ESI, PT, TDS and Form 16 issuance, configured to your salary structure, your state, and your hiring plan. You sign off. We do the rest.