What Foreign Companies Need to Know About Hiring in India Compliantly

With companies across the world looking to tap into emerging new markets, India has become one of the leading outsourcing destinations to hire professional yet affordable workforce. But hiring in India is not without it’s challenges – it requires a comprehensive knowledge of local employment laws, payroll taxation, compliance structures and an understanding of the legal and regulatory environment.

If you're a foreign company planning to hire in India—either remotely or by setting up a local office — then Orbtrak’s guide will walk you through the process in detail.

Can Foreign Companies Hire Employees in India?

Yes, foreign companies can legally hire employees in India. However, the method of hiring matters a lot.

You can:

• Establish a legal presence in India (subsidiary, branch, or liaison office)
• Partner with a local staffing agency
• Use an Employer of Record (EOR) like Orbtrak to hire talent without setting up a legal entity

Each method has its pros and cons—but for fast, compliant, and low-risk hiring, EOR is often the preferred choice.

Legal Structures Available for Hiring in India

Here are the common options for foreign employers:

1. Setting Up an Entity
   This means registering your business in India, which provides you with full control, but also imposes legal, tax, and operational obligations. You will have to handle everything from payroll to H.R. compliance.
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2. Using an Employer of Record (EOR)
   An EOR like Orbtrak acts as the legal employer on your behalf. We take care of:
   
   • Employment Contracts
   • Payroll Processing
   • Tax Deductions
   • Compliance with Indian employment laws
     
     This model lets you focus on operations while we handle the legal side of employment

Key Indian Employment Laws Foreign Employers Must Comply With

No matter whether you are hiring directly or through an EOR, here are some of the most important Indian employment laws to remember:

• Employment contracts: must be clear and compliant
• Minimum wage laws: Federal and state minimum wage laws differ on state-specific and industry-specific requirements
• Working hours & leave policies: must be followed
• Termination and notice periods are legislated
• Statutory benefits include EPF, ESI, Gratuity, etc., for all the PU and UG (except Medical and Dental Colleges) opted Faculty

Orbtrak will make certain all your hires meet these legal requirements.

Payroll, Taxation & Social Security

Handling payroll in India requires:

• TDS (Tax Deducted at Source) on salaries
• Deductions for Provident Fund, ESI, and Professional Tax
• Monthly filings and compliance reports

Mistakes here can lead to penalties and employee dissatisfaction. Orbtrak’s EOR solution automates and manages this entire process on your behalf.

Work Permits & Visas (If Hiring Foreign Nationals in India)

While most foreign companies hire Indian talent, if you're sending expats to work in India:

• You'll need an employment visa
• Compliance with visa documentation and FRRO registration is required

Orbtrak can support you with visa advisory and onboarding services if your hiring plans involve international mobility.

What Happens If You Don’t Comply?

Non-compliance can result in:

• Heavy fines and penalties
• Legal disputes with employees
• Ban on operations or restrictions on future hiring

It’s critical to follow Indian employment laws to avoid reputational and financial risks.

EOR: The Smartest Way to Hire in India Compliantly

Instead of dealing with complex legal setups, many global companies choose an EOR service to hire in India compliantly and quickly.

With Orbtrak’s EOR services, you can:

• Hire full-time employees in India in days
• Be 100% compliant with tax and employment laws of India
• Avoid the overheads of establishing and running a local entity
• Run payroll, contracts and HR from a single platform

How Orbtrak Helps Foreign Companies Hire in India

At Orbtrak, we specialize in compliant remote hiring solutions for foreign companies expanding into India.

Here’s how we support you:

• Recruit staff in India without having to establish your own company
• Draft legally compliant employment contracts
• Manage payroll, taxes and benefits from beginning to end
• Ensure full compliance with Indian employment laws
• Offer ongoing support for HR, on-boarding and exit management

Final Thoughts

Tapping into India talent is an amazing source of opportunity — if done legally and compliantly. If you’re a foreign company that wants to get some of India’s workforce, you don’t need to do it alone.

Let Orbtrak be your trusted hiring partner in India.

We ensure your team is fully compliant, protected, and empowered to thrive.

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‍Source: https://www.orbtrak.com/insights/what-foreign-companies-need-to-know-about-hiring-in-india-compliantly