EOR vs PEO in India — What's the Difference?
| EOR (Employer of Record) | PEO (Professional Employer Organisation) | |
|---|---|---|
| Need an India entity? | No — TMS is the legal employer | Yes — must have a registered entity in India |
| Legal employer | TMS | Co-employment — you and the PEO share this |
| Best for | Foreign companies entering India for first time | Companies with an existing India entity needing HR support |
| Statutory liability | 100% with TMS | Shared between client and PEO |
| Speed to first hire | 7 business days | Faster, but requires entity to already exist |
In India, PEO and EOR are often searched interchangeably — but they are different models. A PEO requires your existing entity and acts alongside you as co-employer. An EOR like TMS is the sole legal employer — no entity needed. For foreign companies entering India for the first time, EOR is the correct model.
EOR vs Setting Up Your Own India Entity — Cost & Time
| Factor | India Entity Setup | TMS EOR |
|---|---|---|
| Time to first hire | 3–6 months | 7 business days |
| Setup cost | ₹12–25 lakhs | Zero |
| Statutory liability | Your entity carries all risk | 100% with TMS |
| Ongoing compliance | Full-time team or CA retainer | Fully managed by TMS |
| Exit | 12–18 months to close | 30-day notice |
| When it makes sense | 25–30+ employees, long-term India commitment | 1–25 employees or testing the India market |
How TMS EOR Eliminates Permanent Establishment (PE) Risk
If your Indian employees sign contracts on your behalf, negotiate deals, or maintain a fixed office — your company may be deemed to have a permanent establishment in India. This triggers Indian corporate tax liability you did not plan for.
TMS EOR eliminates this risk. Your team is legally employed by TMS's registered Indian entity — not your company. This clean separation eliminates PE exposure under the India-US, India-UK, and India-Japan tax treaties.
India's New Labour Codes (November 2025) — TMS Is Fully Compliant
| Labour Code | Key Change for Employers | TMS Status |
|---|---|---|
| Code on Wages 2019 | Uniform wages definition; minimum wages for all employees | ✓ Updated |
| Industrial Relations Code 2020 | Revised retrenchment thresholds; standing orders for 300+ units | ✓ Updated |
| Code on Social Security 2020 | Gig workers covered; expanded EPF/ESI applicability | ✓ Updated |
| OSH & Working Conditions Code 2020 | Contractor licensing unified under one framework | ✓ Updated |
TMS updated all employment contracts, payroll structures, and statutory filings across all 8,500+ active employees when the Labour Codes took effect in November 2025. Clients do not manage any of this — full compliance is included in your TMS EOR fee.
EOR Services by City
🏙 Mumbai
Hiring in Mumbai? TMS's largest client base is in Maharashtra. Local team, 7-day onboarding.
🏙 Pune
Hiring in Pune? TMS is headquartered in Pune. Same-day response from our local team.
🏙 Hyderabad
Hiring in Hyderabad? TMS covers Telangana and Andhra Pradesh.
🏙 Bangalore
Hiring in Bangalore? TMS covers Karnataka with EOR and IT contract staffing.
🏙 Chennai
Hiring in Chennai? Tamil Nadu PT, LWF, and state compliance all managed.
🌐 Pan-India
Need all 28 states? TMS is the only India-native EOR with full pan-India coverage.
