EOR from United States to India.

A US company can hire full-time employees in India without setting up a legal entity by using an Employer of Record (EOR) like TMS. TMS becomes the legal employer in India, handles payroll, statutory compliance, and benefits, while your team manages day-to-day work — typically live within 48 hours.

Why US companies hire from India through an EOR

US tech, fintech, and SaaS companies are increasingly building India teams to solve four specific problems at once:

• H-1B and L-1 backlog. Visa caps, lottery uncertainty, and 2-4 year processing windows have made onshore hiring in the US the slowest path to engineering capacity. Hiring in India removes immigration from the equation entirely.
• Engineering depth and cost arbitrage. India produces roughly 1.5 million STEM graduates annually. A senior engineer in Bangalore, Hyderabad, or Pune costs 25-40% of an equivalent hire in San Francisco, Austin, or NYC for comparable skill.
• Time-zone overlap. Bangalore is 9.5-12.5 hours ahead of US time zones. With staggered shifts, India teams give US companies meaningful overlap with West Coast mornings and “follow-the-sun” coverage for support, ops, and incident response.
• Avoiding the 4-6 month entity setup. Setting up a wholly-owned Indian subsidiary is the long path: incorporation, FDI approvals, bank account opening, tax registrations (PAN, TAN, GST, EPF, ESI, professional tax across multiple states), payroll software, statutory liaison. EOR collapses this to a contract.

How EOR US to India works — the legal mechanics

When a US company hires an Indian employee through TMS, the structure is:

1. TMS is the legal employer of record in India. The employee signs an Indian employment contract with TMS. TMS issues the offer letter, pays salary in INR, deducts statutory taxes, and files all government returns.
2. You retain full operational control. Day-to-day work, performance management, projects, and goals stay with your US team. Your relationship with TMS is governed by a Master Services Agreement (MSA).
3. No Indian permanent establishment (PE) for your US entity. Because TMS — not your US company — is the employer, your US entity does not create a taxable presence in India by virtue of having staff here. This is the central tax advantage of the EOR model and the reason it is widely used by US firms hiring in India.
4. The US-India tax treaty (DTAA, 1989) governs the employee side. An Indian-resident TMS employee pays Indian income tax on their salary. They do not have US tax obligations from this employment unless they are a US person (citizen or green-card holder) — in which case worldwide-income filing rules apply to them personally, which TMS does not handle on the personal-tax side.
5. Your payment to TMS is a deductible service expense in the US, invoiced in USD or INR by agreement.

Roles US companies typically place on TMS payroll

Across the US clients on TMS payroll today, the most common hire profiles are:

• Software engineers (backend, full-stack, frontend, mobile) — by far the largest category.
• DevOps, SRE, and platform engineering — strong India talent pool, time-zone advantage for 24/7 reliability.
• QA and SDET — automation-heavy roles with measurable output.
• Data engineers and ML engineers — growing fast in Bangalore, Hyderabad, Pune.
• Product designers and UX researchers — with some US-overlap working hours.
• Customer support, customer success, and technical account managers — using India’s English-speaking pool for tier-1 and tier-2 coverage in US morning hours.
• Finance, accounting, and FP&A — back-office work with strong cost arbitrage.
• Sales development reps (SDRs) and outbound prospecting teams — targeting US/EU markets from India.

The TMS 5-step onboarding process

TMS handles end-to-end onboarding so your team focuses on day-one productivity:

1. MSA and scope agreement. A one-time master agreement covers the commercial terms, IP assignment, confidentiality, and exit provisions.
2. Candidate sign-on. TMS issues an Indian employment offer letter, completes KYC, and collects mandated documents (PAN, Aadhaar, prior-employer relieving letter, bank details).
3. Statutory enrollment. TMS enrolls the employee in Employees’ Provident Fund (EPF), Employees’ State Insurance (ESI, if applicable based on salary band), professional tax in the state of work, and gratuity nomination.
4. Payroll setup and first salary credit. Salary structure is finalized (CTC breakdown across basic, HRA, special allowance, employer-EPF, gratuity provision). First salary credit lands on the standard monthly payroll date.
5. Monthly compliance and reporting. TMS files monthly EPF, ESI, professional tax, TDS, and quarterly statutory returns. You receive a single consolidated invoice and reporting dashboard.

We deploy talent in 48 hours.

EOR vs setting up your own India entity

Setting up a wholly-owned subsidiary in India is the right move at scale. But for the first 1-25 hires, the math overwhelmingly favours EOR.

The real first-year cost of standing up an Indian entity: – Registrations and legal: ₹3-12 lakh (incorporation, FDI/FEMA reporting, PAN, TAN, GST, EPF, ESI, professional tax in each state of operation, RoC filings, legal review). – Operational setup: statutory auditor retainer, payroll software subscription, HRMS, statutory compliance consultant, banking and FX setup. First-year operational cost typically runs ₹15-35 lakh ($18,000-$45,000 USD) for a small entity. – Time to operational: 4-6 months minimum from incorporation to first compliant payroll run. – Ongoing burden: 80-150 hours per month of HR, compliance, and statutory work — usually requiring at least one full-time India HR/compliance hire by month 3.

EOR through TMS replaces all of that with: – A single per-employee monthly fee (quoted on engagement). – Zero setup time — talent deployed in 48 hours. – Zero PE risk for your US entity. – One-line accounting on your US books: services expense.

When EOR makes sense: 1-25 employees in India, market-test phase, multi-country expansion where India is one bet among several, or any stage where India headcount is not yet large enough to justify the operational overhead of an entity.

When to consider a transition: Once you have 30+ India employees, an Indian directorial presence on your roadmap, or strategic IP that you want held by an Indian subsidiary. TMS supports the EOR-to-entity transition as a standard service — we coordinate offer letter transfers, EPF account continuity, gratuity tenure preservation, and statutory handover with your new India entity so the employee experience stays seamless.

Frequently asked questions

An illustrative engagement — what hiring 8 engineers in Bangalore looks like