How to hire employees in India: a guide for overseas companies

If your company is based abroad, you have three legal routes to a team in India: your own entity, an Employer of Record (EOR), or independent contractors. Many companies start with an EOR and set up an entity once headcount grows. Whichever route you use to hire employees in India, notice periods and CTC-based offers will set your timeline.

A note on scope. Kintra is a recruitment firm, not an EOR, payroll provider or law firm. We find and close candidates. Decisions on employment structure, tax and compliance belong with your EOR and your legal counsel, and nothing here is legal advice.

Can a foreign company hire employees in India?

Yes. A foreign company can hire in India without a local entity by using an Employer of Record, which becomes the legal employer while you direct the work. It can also set up a subsidiary and employ people directly, or engage individuals as independent contractors. The routes differ mainly in who carries the compliance risk and how quickly you can make your first hire.

You will also be competing with Indian employers for the same people. According to the ManpowerGroup Global Talent Shortage Survey India 2026, 82% of Indian employers report difficulty finding the skilled talent they need. A good offer and a fast process matter as much as the legal route.

What are the three ways to hire in India?

The three routes are your own entity (a subsidiary or branch), an Employer of Record, and independent contractors. Your own entity gives full control but takes longest to set up. An EOR is usually the quickest compliant way to employ full-time staff. Contractors look simplest on paper, yet if you manage them like employees, the misclassification risk sits with you.

Why contractors are riskier than they look

If a contractor works fixed hours, uses your equipment, reports to your manager and works only for you, the relationship may be treated as employment. The outcome depends on the facts, so have an Indian employment lawyer review any long-term contractor arrangement before you rely on it.

When to move from an EOR to your own entity

EOR fees are charged per employee, so the cost gap grows with headcount. Many companies use an EOR for the first hires, then set up an entity once the team is clearly permanent. Plan the transfer early, because moving employees between legal employers needs careful handling.

What does CTC mean in an Indian salary offer?

CTC stands for cost to company: the total annual amount an employer spends on an employee. It includes fixed pay, variable pay and employer contributions to statutory schemes such as provident fund and gratuity. Candidates negotiate in CTC but live on in-hand pay, the monthly amount after deductions, which is noticeably lower than CTC divided by twelve.

Quote every offer as annual CTC in INR, with the fixed and variable split shown clearly. A US-style base salary or a UK-style gross figure leaves candidates unable to compare your offer with their current package, and an offer they cannot compare is an offer they hesitate over.

Indian candidates also judge an offer by the rise over their current CTC. According to Aon's Salary Increase and Turnover Survey 2025-26, salaries in India rose 8.9% in 2025 and are projected to rise 9.1% in 2026. Candidates tend to look hardest at the fixed component, so a large variable portion rarely closes anyone on its own.

How do notice periods affect your hiring timeline?

Notice periods are usually the longest step between offer and start date. In India, the notice period is set by the employment contract and usually runs 1 to 3 months, according to Nyaaya, Vidhi Centre for Legal Policy. A good candidate on 90-day notice can take a full quarter to join.

Ninety days is common in technology. An Analytics India Magazine analysis (AIM analysis, 2022, methodology not disclosed) found almost one in three IT roles had a 90-day notice period, rising to 43% of IT roles needing 14 or more years of experience. Across organised-sector jobs, 54.1% had one month or less.

Some candidates can leave early through a buyout, paying salary in lieu of the unserved notice, if their current employer agrees. New employers sometimes reimburse that cost to secure an earlier start. Whether a buyout is accepted depends on the contract and the employer, so never promise your team a start date that assumes one.

Long notice also opens a window for counter-offers and competing offers. Taggd puts offer dropout rates at "about 25 to 35% in most sectors" (Taggd, industry estimate, 2022). Regular contact through the notice period is the best defence. Our guide to notice periods and offer dropouts covers the tactics.

What changed with India's Labour Codes?

India's four Labour Codes came into force on 21 November 2025, according to a King Stubb & Kasiva law-firm alert. They replace a number of older central labour laws. Before you issue offers or sign an EOR agreement, ask your counsel or EOR how the codes affect your contracts and salary structures.

We do not give legal advice on the codes, and you should be wary of anyone who sums them up in a single line. State rules also apply, so the city where your employees sit matters.

How does background verification work in India?

Background verification is standard for white-collar hires in India. It is usually run by a specialist vendor after offer acceptance, with the candidate's written consent, and covers past employment, education, identity, address and often criminal records. AuthBridge's own data for October 2024 to March 2025 found a 6% discrepancy rate among white-collar hires (AuthBridge Workforce Fraud Files 2025, vendor data).

Two India norms surprise overseas employers. First, the check with a candidate's current employer usually waits until after they resign, so the search stays confidential. Second, a relieving letter from the previous employer is a routine document to request at joining. Our background verification checklist lists each check and when to run it.

How do time zones work with an India team?

India Standard Time is UTC+5:30 and does not change for daylight saving. UK teams get several shared hours, because the UK morning overlaps with the Indian afternoon. US teams get far less, usually early morning in the US against evening in India, so many India-based roles serving US clients work shifted hours.

State the working hours in the job description and the offer letter. Candidates accept late shifts more readily when they know upfront, and some will ask for a shift allowance or transport support.

How much does it cost to hire a developer in India?

Salaries depend heavily on the type of employer. PayScale reports an average base salary of INR 813,748 for software engineers in India (July 2026). Levels.fyi, which skews to big-tech and product companies, shows median total compensation of INR 3,002,326 (October 2026). The gap matters more than either figure: your budget depends on whether you are competing with services firms or with big tech for the same engineers.

The BLS figure is a median wage from employer data. PayScale is self-reported base salary. Levels.fyi includes bonus and stock. We have not converted currencies, because exchange rates move. If you need a USD or GBP figure for a board paper, convert at the rate on the day and state that date.

Add the costs that sit on top of salary: employer statutory contributions, EOR fees, equipment and recruitment fees. Industry blogs put Indian agency fees for junior and mid-level permanent roles at 8.33% to 12.5% of annual CTC (GoodSpace, industry blog, 2026), and 18% GST is added on agency fees (Hyring, industry blog, 2026). Our page on recruitment fees explains how fees are structured.

What does a realistic hiring timeline look like?

A realistic timeline is the search plus the candidate's notice period. Briefing, sourcing, interviews and offer usually take several weeks. The notice period then adds 1 to 3 months in most cases, according to Nyaaya. Work backwards from your target start date, and expect the notice period to be the step you control least.

1. Choose the employment route, then sign with an EOR or start entity registration.
2. Write a role scorecard: must-haves, salary band in INR CTC, notice-period tolerance and working hours.
3. Map the market: which companies employ these people, what they earn and what notice they serve. Consider tier-2 cities as well as the big metros.
4. Source candidates and screen for both fit and genuine intent to move.
5. Run a tight interview loop, ideally with decisions within days of each round.
6. Make the offer in CTC terms, covering the fixed and variable split, joining bonus and buyout support.
7. Run background verification with the candidate's consent.
8. Stay in weekly contact through the notice period, and prepare for a counter-offer.
9. Have equipment and access ready on day one, then check in at 30, 60 and 90 days.

When is hiring in India the wrong move?

Hiring in India is the wrong move when the role needs daily in-person contact with home-country clients, when nobody can manage the person during overlapping hours, or when the only goal is the lowest possible salary. A single hire with no local peers often struggles too, because a lone remote employee has nobody nearby to learn from or ask.

Data law can also take India off the table. If regulated data cannot leave your country, offshoring that work is not an option, whatever the salary saving. For a wider view of the trade-offs, read our comparison of offshoring vs outsourcing.

Where should you start?

Start with the roles, not the legal structure. List the positions, levels, target start dates and working hours you need, then choose the route that fits that list. If you plan to hire employees in India over the next two quarters, the notice-period clock is the first thing to account for.

Our offshore hiring service handles the recruiting side alongside your EOR or entity. When your role list is ready, share a hiring brief and we will map the market for each role before outreach begins.