EOR from United Kingdom to India.

Hiring in India from the UK: what actually changes

British companies usually arrive at India with one of two problems. Either a contractor relationship has quietly become a full-time job and nobody is comfortable with it any more, or a delivery team has grown past the point where a UK entity can keep paying people through invoices. Both are fixable. Neither needs a subsidiary.

The instinct from UK finance teams is to reach for something that looks like an umbrella company. An EOR is not that. TMS becomes the legal employer of your India staff under Indian law, issues a state-compliant contract, runs monthly payroll in rupees and files every statutory return in our name. You keep the work, the deadlines and the performance conversations.

IR35 taught you the wrong test

UK teams tend to assess employment status the way HMRC does, through mutuality of obligation, substitution and control. Indian law does not use that framework. Courts here look at who directs the work day to day, whether the person is integrated into the organisation, who supplies the tools and who can discipline them. A contractor who reports to your standup every morning, uses your laptop and takes leave through your system is an employee in substance, whatever the invoice says.

The exposure sits with the principal. Under the Contract Labour (Regulation and Abolition) Act and the Industrial Relations Code, the company benefiting from the work can be held responsible for provident fund and ESI arrears that were never deducted. Backdated PF is calculated with interest and damages, and it is assessed against the establishment, not the individual.

GBP in, rupees out

We invoice you in pounds. Your team is paid in rupees on a fixed monthly cycle, with payslips issued individually and Form 16 at year end. Salary and statutory contributions are billed at actuals, so you are not paying a percentage markup that grows every time somebody gets a raise. The management fee is flat per employee and written into the MSA for the contract term.

UK GDPR and India's DPDP Act are not the same thing

India's Digital Personal Data Protection Act, 2023 governs employee data held here. It is not a copy of UK GDPR and the two do not map cleanly. Consent, notice and retention obligations differ, and the employer of record is the entity holding the employment record in India. TMS issues the employee privacy notice, holds the personnel file and handles data requests under Indian law. Your UK-side transfer assessment still belongs to you, and your DPO should see the contract before signing.

Permanent establishment, and the thing UK finance directors actually ask about

The question that stops most India plans is whether hiring here creates a taxable presence for the UK parent. Under the India-UK double taxation treaty, permanent establishment turns on fixed place of business and dependent agent tests. An EOR arrangement is structured so the employment relationship sits with TMS rather than with you. It does not make PE risk vanish by itself. If your India team is concluding contracts or habitually negotiating on your behalf, that is worth a conversation with your tax adviser before you scale, and we will tell you so rather than wave it away.

What UK companies typically hire here

• Engineering and platform teams supporting a UK product, working a shifted day for afternoon overlap
• Finance and accounting operations, including UK payroll processing and management reporting
• Customer support covering UK business hours from an early India start
• Data, analytics and QA functions attached to an existing London or Manchester team
• Sourcing, quality and vendor management roles for firms buying from Indian manufacturers

How long it takes

A signed MSA and a candidate who has accepted usually means a start date inside two working days. The slow part is almost never us. It is the UK side agreeing the salary band and getting the background check consent back. We run a seven-point verification before day one and flag anything that does not reconcile.

If your India headcount passes roughly 50 to 75 people, an entity of your own usually starts to make financial sense. We will say so, and we move your staff across with continuity of service intact rather than making you re-hire everybody.

EOR from the UK to India: common questions

Does an India EOR solve our IR35 exposure?

It removes the UK question by moving the role out of the UK entirely. The person becomes an employee of TMS in India, not a contractor invoicing a British company. What replaces it is the Indian test, which looks at control, integration and who supplies the tools. That test is satisfied by a properly constituted employment contract, which is what we issue.

Can we keep paying in pounds?

Yes. We invoice in GBP. Your team is paid in rupees, because Indian law requires wages to be paid in Indian currency into an Indian bank account.

What happens to our UK GDPR obligations?

They do not disappear. India has no EU or UK adequacy decision, so your transfer assessment and contractual safeguards still apply on the UK side. On the India side, employee records fall under the DPDP Act, 2023 and TMS issues the notice and holds the file.

Will hiring in India create a permanent establishment for our UK company?

An EOR structure is designed so the employment relationship sits with TMS. That does not settle the question by itself. If your India staff conclude or habitually negotiate contracts for you, PE risk rises regardless of who runs payroll. Take tax advice before you scale past a handful of people.

How much notice will our India employees have to give?

Typically 30 to 90 days depending on seniority and what the contract sets. Notice is usually served rather than bought out, so plan handovers on that basis rather than the two weeks common in some UK roles.