Three Ways to Hire in India as a Foreign Company
If you are a company outside India and want to hire someone in India, you have three legal options. Each has different timelines, costs, and compliance implications.
| Option | Timeline | Cost | Best For |
|---|---|---|---|
| Employer of Record (EOR) | 5–7 days | $75–$120/employee/month | 1–20 employees, fast start |
| Set Up India Entity | 4–6 months | ₹2–5L setup + ₹3–8L/year | 20+ employees, long term |
| Contractor (Freelancer) | Immediate | No overhead | Project-based only — risk of misclassification |
What Is Employer of Record (EOR) and Why Most Foreign Companies Start Here
An Employer of Record is a company that legally employs workers on behalf of another business. In practice: you find the person you want to hire. XMS issues the employment contract, handles India payroll, provident fund, ESI, and TDS. You pay XMS monthly and direct the employee's work completely.
It is the fastest, lowest-risk way to hire in India. No India company registration required. No local director. No annual statutory filings. Full compliance from day one.
EOR pricing at XMS starts at $75 per employee per month — compared to $299/month charged by global platforms like Deel. XMS is India-focused, which means faster onboarding, better payroll accuracy, and a team that understands Indian employment law in practice, not just in theory.
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India Employment Law — What Every Foreign Company Must Know
India's employment framework is not like the US, UK, or Europe. Before you hire your first person, understand these non-negotiable realities:
Provident Fund (PF) is Mandatory
Employer contributes 12% of basic salary to the Employees' Provident Fund for employees earning below ₹15,000 basic/month. This is an on-top employer cost — factor it into total cost of employment.
Notice Periods Are 60–90 Days
Most mid-to-senior employees in India have 60–90 day notice periods — significantly longer than US or European norms. Plan hiring timelines and exit processes accordingly.
Annual Increments Are Expected
Strong performers in India's tech market expect 10–20% annual salary increases. Companies that skip annual reviews lose their best people within 18 months.
Termination Requires Process
India's employment laws protect employees from arbitrary dismissal. Performance exits require documentation. XMS guides clients through every exit process to ensure compliance and avoid disputes.
Contractor Misclassification Is a Real Risk
Paying a full-time worker as a freelancer is common and risky. Indian authorities look at the actual working relationship, not the contract label. Misclassification triggers back-PF liability and penalties.
India Salary Benchmarks — What Roles Actually Cost (2026)
Salaries vary significantly by city, experience level, and domain. These are 2026 market rates for Bangalore — India's primary tech talent hub:
| Role | Experience | India CTC (₹/year) | USD/month (via EOR) |
|---|---|---|---|
| Software Engineer (Backend) | 3–5 yrs | ₹18L–₹28L | $2,000–$3,300 |
| Senior Software Engineer | 5–8 yrs | ₹28L–₹45L | $3,300–$5,300 |
| Engineering Manager / Tech Lead | 8–12 yrs | ₹45L–₹75L | $5,300–$9,000 |
| Product Manager | 4–8 yrs | ₹25L–₹50L | $3,000–$6,000 |
| Finance / FP&A Analyst | 3–6 yrs | ₹12L–₹22L | $1,400–$2,600 |
| Operations Manager | 5–8 yrs | ₹18L–₹32L | $2,100–$3,800 |
| Data Scientist / ML Engineer | 3–7 yrs | ₹25L–₹55L | $3,000–$6,500 |
USD estimates include EOR fee. Actual salary in INR. Exchange rate: ₹84/USD approximate.
Which Cities to Hire From in India
Bangalore
India's tech capital. Best for engineering, product, data, and AI roles. Highest salaries but deepest talent pool. XMS headquartered here.
Hyderabad
Strong for enterprise tech, pharma, and BFSI. 10–15% lower salaries than Bangalore for equivalent roles. Growing GCC hub.
Pune
Strong engineering and automotive tech talent. 15–20% lower than Bangalore. Popular for GCC support functions and mid-size teams.
How XMS Helps Foreign Companies Hire in India
XMS provides three services that cover the full lifecycle of hiring in India:
Employer of Record (EOR)
We become the legal employer for your India team. Employment contracts, payroll, PF, ESI, TDS — all handled. You direct the work. From $75/month. Onboarding in 5–7 days. Learn more →
Recruitment
We source, screen, and shortlist engineers, finance professionals, operations managers, and leadership roles across Bangalore, Hyderabad, and Pune. 10,000+ placements delivered. Learn more →
Payroll Management
Once you have your India entity, XMS can run payroll — PF, ESI, TDS, Form 16, professional tax — with 99.9% accuracy. Learn more →
Hiring in India by Country — Specific Guides
Ready to Hire in India?
XMS has helped 100+ global companies build India teams since 2017. EOR from $75/month. Recruitment across all functions. Talk to us today — same day response.