Before you've incorporated anything in India, you may already need people on the ground — a country lead, a first engineer, someone to close your first deals. That timing gap is where the Employer of Record (EOR) vs. own-entity decision comes in.
The Hiring Dilemma for New Entrants
Incorporating a subsidiary, opening a bank account and registering for statutory schemes takes real time. If you need someone employed compliantly before that process finishes — or before you're fully committed to India — hiring through your own entity simply isn't an option yet.
What an Employer of Record Does
An EOR is already a legally registered employer in India. They put your hire on payroll under compliant contracts, handle PF, ESIC and TDS deductions, and manage statutory filings — while you direct the person's day-to-day work as if they were your own employee. It's the fastest way to get compliant boots on the ground.
What Owning Your Entity Means for Hiring
Once you've incorporated, hiring directly gives you full control over compensation structuring, benefits, equity plans, and how the role is positioned internally. It's also usually more cost-effective at scale — EOR providers charge an ongoing fee per employee that adds up as your team grows.
| Factor | Employer of Record | Own Entity |
|---|---|---|
| Speed to hire | Days | Weeks to months |
| Upfront cost | Low | Higher (incorporation + setup) |
| Control over structuring | Limited | Full |
| Cost at scale (5+ hires) | Higher over time | More cost-effective |
When to Make the Switch
There's no fixed headcount that triggers the switch, but most companies find the economics and control of an owned entity become worthwhile somewhere between 5 and 10 employees — sooner if you're also ready to sign local contracts and build a lasting India presence.