India-Belgium Trade Is Set to Double. Here’s What It Means for Hiring in India Without a Legal Entity
India and Belgium have agreed to double trade within five years. For companies on both sides, that raises a practical question: how do you start hiring in India without a legal entity, and how do you place people in Europe before you have an office there? This guide explains what the partnership means for cross-border hiring and the options open to you.
Key takeaways
- In September 2026, India and Belgium committed to doubling bilateral trade within five years, with talent mobility named as a core area of cooperation.
- More trade means more cross-border hiring, in both directions: European firms building teams in India, and Indian firms placing people in Europe.
- Most companies want to hire before they set up a local company. Doing that directly is slow, costly and legally risky.
- An Employer of Record (EOR) lets you hire full-time employees in a country where you have no legal entity, while a local partner handles contracts, payroll, tax and statutory compliance.
- An EOR is usually the faster, lower-commitment route for small teams. A legal entity makes more sense once your team and plans are large and long term.
What happened in the India-Belgium talks, and why should businesses care?
In September 2026, Belgian Prime Minister Bart De Wever visited India. It was the first visit by a Belgian prime minister in 20 years.
The headline outcome was a shared commitment to double bilateral trade within five years. The two sides also named the areas where they plan to work together: trade, defence, clean energy, semiconductors and talent mobility. India’s government summed up the relationship as the “3 Ts”: Trade, Technology and Talent.
Two points matter most for anyone who runs a business or leads hiring:
- Both countries agreed to faster, smoother visa processing and stronger talent mobility. People are expected to move between the two markets more easily.
- Belgium is positioning itself as a gateway into the European Union for Indian companies. For an Indian firm, a Belgian foothold can be the first step into the wider EU market.
Put simply, this is not just a diplomatic handshake. When two countries set a target to double trade, companies on both sides start opening offices, signing suppliers, winning clients and, sooner or later, hiring people in the other country.
How does a trade deal turn into a hiring decision?
Trade agreements set direction. However, businesses do the actual work, and that work needs people on the ground.
So here is how the India-Belgium push is likely to show up in hiring plans.
European companies hiring in India
A Belgian or wider EU company that wants to expand business to India usually starts small. It might need:
- A country manager or business development lead to build relationships with Indian clients and partners
- An engineering, analytics or semiconductor design team to tap into India’s technical talent
- Project staff to support a clean energy or manufacturing partnership
- A small operations or customer support team
Indian companies hiring in Europe
An Indian company using Belgium as its EU entry point often needs:
- A sales or account lead based in Europe, close to customers
- Engineers or consultants deployed to a client site
- A small regional team before committing to a full European office
In both cases, the pattern is the same. The company wants one to ten people in a new country, quickly, long before it is ready to commit to a full local setup. That is where most expansion plans hit their first real obstacle.
Why is hiring in India without a legal entity hard to do on your own?
To employ someone directly in India, a company normally needs a registered local entity. The same broadly applies in Belgium and the rest of the EU. Without one, you cannot run local payroll, deduct and deposit taxes, or register for social security in your own name.
Setting up an entity sounds simple on paper. However, in practice it involves:
- Incorporation, such as registering a private limited company or a branch
- Tax registrations, including PAN, TAN and, where relevant, GST
- Bank accounts and capital requirements
- Labour and social security registrations, such as Provident Fund, ESI and state-level Shops and Establishments registration
- Ongoing obligations, including statutory filings, audits, board compliance and annual returns
It can take several months and tie up legal, accounting and management time before a single employee joins.
Compliance is also a hurdle. India’s four Labour Codes took effect on 21 November 2025, and state-level rules are still rolling out unevenly. Payroll in India also involves monthly salary TDS, Provident Fund and ESI contributions where applicable, state Professional Tax, gratuity rules and leave policies that vary by state. A small mistake here can lead to penalties, back payments and, in serious cases, disputes with employees.
What about just hiring people as contractors?
Many companies try to sidestep the problem by calling their team “consultants” or “freelancers”. This works for genuine, short-term, project-based work. It becomes risky when the person works full time, follows your schedule, uses your systems and reports to your managers. At that point, the relationship can look like employment in the eyes of the law, which exposes the company to claims for unpaid benefits and statutory dues.
There is also a tax angle. Having people working for you in India on an ongoing basis can, in some cases, raise questions about whether your company has a taxable presence there. This depends on what the team does, so it is worth taking tax advice early.
So the real question for most expansion leads is: how do we hire properly, now, without waiting months for an entity? That is why hiring in India without a legal entity, through an Employer of Record, has become a common first step.
What is an Employer of Record (EOR), in plain language?
An Employer of Record (EOR) is a company that legally employs your team members in a country on your behalf.
In short, think of it as splitting the employer role in two:
- You decide who to hire, what they work on, how they are managed and how they are paid. They work as part of your team, day to day.
- The EOR becomes the legal employer on paper. It issues the employment contract under local law, runs payroll, deducts and deposits taxes, handles social security and statutory benefits, and keeps the employment compliant.
You pay the EOR a monthly amount that covers the employee’s salary, the statutory costs of employing them and a service fee. The employee gets a proper local contract, local benefits and on-time salary. You get a working team without setting up a company.
For hiring in India without a legal entity, an Employer of Record India partner typically handles:
- Employment contracts that follow Indian law and the Labour Codes
- Monthly payroll and payslips
- Salary TDS, Provident Fund, ESI where applicable, Professional Tax and other statutory deductions and filings
- Onboarding, leave, benefits and exits in line with local rules
- Keeping up with changes in labour and tax law
The same model exists in Belgium and other EU countries, run by EOR providers based in those markets. That is how Indian companies can place staff in Europe before opening a European office.
EOR or legal entity: which is better for hiring in India?
Neither option is “better” in every case. Instead, the right choice depends on how many people you need, how fast you need them and how certain your long-term plans are.
| Factor | Employer of Record (EOR) | Setting up a legal entity |
|---|---|---|
| Time to first hire | Typically days to a few weeks | Often several months before you can hire |
| Upfront cost | Low; no incorporation, capital or setup costs | Higher; legal, registration, accounting and office costs |
| Ongoing cost | Monthly fee per employee | Fixed running costs for compliance, audits, filings and staff |
| Who is the legal employer | The EOR | Your own local company |
| Compliance burden | Handled by the EOR | Handled by you and your advisers |
| Best for team size | Small teams, often 1 to 20 people | Larger, stable teams |
| Flexibility to test the market | High; easy to scale up or down | Low; setting up and winding down both take time |
| Exit if plans change | Relatively simple, handled within local rules | Slow and costly to close an entity |
| Ability to sign local contracts and invoice clients | No; the EOR employs staff but does not trade for you | Yes; the entity can trade, invoice and own assets locally |
| Long-term control | Shared with the EOR on employment matters | Full control |
A simple rule of thumb: use an EOR to test a market, hire your first team and prove the business case. Move to your own entity once the team is large, the market is proven and you need to trade locally in your own name. Many companies do exactly this, and a good EOR can support the transition when the time comes.
When does an EOR make sense for hiring in India without a legal entity?
An EOR is usually a good fit when:
- You need to hire in India (or Europe) within weeks, not months
- You are hiring a small team, or even a single person, to start
- You are testing a market before committing to it
- You want compliant, full-time employees rather than contractors
- You do not have in-house legal and payroll expertise for that country
A legal entity is usually the better fit when:
- You plan to build a large team in the country
- You need to sign contracts, invoice clients or hold assets locally
- Your presence is long term and the business case is already proven
- The total monthly EOR fees start to exceed the cost of running your own entity
What should you check before choosing an Employer of Record in India?
Not all EOR providers are equal. Before signing, ask:
- Do they own a local entity in India, or do they rely on partners? A provider with its own Indian entity has direct control over payroll and compliance.
- How do they handle the Labour Codes and state-level rules? India’s rules differ by state. Ask how they track changes.
- What is included in the fee? Check for extra charges on onboarding, exits, benefits administration or currency conversion.
- How do they manage employee benefits? Look at health insurance, leave policies and how they handle gratuity and final settlements.
- What is their data protection approach? Employee data is personal data. Ask how it is stored, who can access it and how they comply with India’s Digital Personal Data Protection Act.
- Can they support conversion to your own entity later? If you plan to set up locally in a few years, a smooth handover matters.
Frequently asked questions
Can a foreign company start hiring in India without a legal entity?
Yes. A foreign company can hire full-time employees in India without a legal entity by using an Employer of Record (EOR). The EOR legally employs the staff in India, issues compliant contracts and runs payroll, taxes and statutory benefits, while the foreign company manages the employees’ day-to-day work.
How does an Employer of Record work in India?
An Employer of Record in India becomes the legal employer of your team members on paper. It issues employment contracts under Indian law, pays salaries, deducts and deposits TDS, handles Provident Fund, ESI where applicable and other statutory contributions, and manages onboarding and exits. The client company chooses the employees, directs their work and pays the EOR a monthly amount covering salary, statutory costs and a service fee.
Is hiring in India without a legal entity cheaper than setting one up?
For small teams, an EOR is usually cheaper and much faster than setting up a company in India, because there are no incorporation, registration or ongoing entity compliance costs. For large, long-term teams, running your own entity can become more cost-effective, since the EOR’s per-employee fee adds up as headcount grows.
How long does hiring in India without a legal entity take?
Hiring in India without a legal entity, through an EOR, typically takes days to a few weeks once you have selected a candidate, depending on notice periods and onboarding checks. Setting up a legal entity before hiring often takes several months, which is why many companies use an EOR for their first hires.
What does the India-Belgium trade partnership mean for cross-border hiring?
The India-Belgium partnership, announced in September 2026, commits both countries to doubling bilateral trade within five years and includes faster visa processing and stronger talent mobility. For businesses, this points to more cross-border hiring in both directions: European companies building teams in India and Indian companies placing staff in Belgium as a gateway to the EU. Many will need to hire before setting up a local entity, which is the gap an Employer of Record fills.
How TMS can help
If the India-Belgium partnership has put India on your expansion plan, TMS’s Employer of Record service lets you hire full-time employees in India from day one, without setting up a local entity. We handle contracts, payroll, statutory compliance and benefits under Indian law, so your team can focus on the work. To estimate costs for your first hires, try our EOR cost calculator.