The EOR model works identically for European parents as for US — same Indian compliance stack, same employment structure, same per-employee fee model. What differs is the cross-border tax position, the data-protection regime your engineers fall under, and the day-to-day collaboration mechanics.
Time-zone — Europe wins
- London (UK): India is 4.5 - 5.5 hours ahead. Indian engineers' workday afternoon overlaps with European morning — 3-4 hours of natural overlap.
- Berlin / Amsterdam / Paris: India is 3.5 - 4.5 hours ahead. Similar 3-5 hours of overlap.
- Stockholm / Helsinki: India is 2.5 - 3.5 hours ahead. Best overlap of any time zone.
- Vs. US east coast: 9.5 hour difference — 1-2 hours overlap at best. US west: 12.5 hours — almost no overlap.
European companies routinely run live standups with their Indian team. US companies operate primarily async. This is a structural advantage for European-Indian collaboration.
DTAA — most European treaties more favourable than US
India's tax treaties with most European countries are more taxpayer-friendly than the US-India treaty. For payments from your Indian subsidiary back to the European parent:
| Country | Royalty / FTS rate (DTAA cap) | Notes |
|---|---|---|
| US-India | 15% | Standard reference point |
| UK-India | 15% (royalty), 10-15% (FTS) | Similar to US |
| Germany-India | 10% | Materially lower than US |
| Netherlands-India | 10% | Same as Germany |
| France-India | 10% | Same |
| Sweden-India | 10% | Same |
| Singapore-India | 10% | Used as holdco jurisdiction historically |
GDPR — when Indian engineers process EU personal data
If your Indian engineers access European customers' personal data (which is common — they're building / supporting your product), GDPR applies. The transfer of personal data to India requires a lawful basis.
- Standard Contractual Clauses (SCCs) — most common mechanism. EU Commission's SCC templates govern data transfer to non-adequacy countries (India isn't on the adequacy list).
- Adequacy decision — India is NOT on the EU adequacy list as of 2026. SCCs are mandatory.
- Transfer Impact Assessment (TIA) — required since Schrems II. Document why SCCs alone are sufficient given India's regulatory environment.
- Indian engineers' contracts include EU GDPR confidentiality language flowing through.
- Data Processing Agreement (DPA) between your EU entity and the Indian EOR / subsidiary.
GDPR-aware EOR setup for European clients
FastLegal's MSA template includes SCC-compatible data processing language. We assist with the DPA between your EU entity and the Indian operations, and our internal infrastructure supports GDPR data handling expectations. Many of our customers are UK / EU companies.
Payment mechanics in EUR / GBP
- Most India-specialist EORs accept payment in EUR / GBP via SWIFT or SEPA.
- Conversion to INR happens at the EOR's bank; FX margin disclosed in the MSA.
- Some EORs use multi-currency receivables accounts (Wise Business, Revolut Business) — lower FX margin.
- Annual invoicing in foreign currency means your subsidiary's books capture FX gain / loss naturally.
Country-specific considerations
- UK — Brexit hasn't changed UK-India tax treaty. UK GDPR is substantively similar to EU GDPR; same SCC approach.
- Germany — most rigorous on data protection. Engage German counsel for the DPA review even if FastLegal provides templates.
- Netherlands — favourable holdco jurisdiction historically (BV structure). Many European tech companies route India operations through a Dutch BV.
- France — additional consideration of Loi Informatique et Libertés; works with GDPR SCCs.
- Nordic countries — least regulatory friction; English-language operations dominant.
Frequently asked questions
Do we need to apply UK / EU labour law to our Indian engineers?+
No — Indian engineers on an Indian EOR are governed by Indian labour law. You can voluntarily offer benefits aligned with your EU policies but it's not legally required.
Can we use our existing European payroll provider for India?+
Some have India modules; quality varies. India-specialists are usually better on local compliance edge cases.
What's the right legal entity in Europe to contract with the EOR?+
Whatever entity is contractually paying. Usually your operating European entity (UK Ltd, German GmbH, etc.). Keep the EOR contract aligned with the entity that will ultimately fund and benefit from the work.
Are there VAT implications for our European entity?+
EOR services from India to a European business are typically zero-rated under reverse-charge VAT (you self-account). Check with your VAT adviser for the specific country.
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