India has rapidly become one of the most attractive destinations for global expansion. With its large talent pool, cost efficiency, and rising market demand, it offers excellent opportunities for international businesses. For Japanese companies, entering India can unlock growth in IT, manufacturing, clean energy, and R&D.
However, there’s a challenge. Setting up a legal entity in India takes 4–6 months and involves significant costs and compliance requirements. Fortunately, Japanese businesses can bypass this hurdle by using an Employer of Record (EOR) solution.
As a result, this guide explains how Japanese companies can expand smoothly into India with EOR services from Team Management Services (TMS).
An Employer of Record (EOR) is a third-party organization that legally employs workers on your behalf. While you manage daily operations and performance, the EOR handles:
Payroll and statutory compliance
Employment contracts
Taxes and employee benefits
In short, an EOR allows Japanese companies to hire in India without forming a subsidiary. Therefore, it saves time, reduces costs, and lowers compliance risks.
Step 1: Define Your Business Needs
Start by identifying the roles you want to hire in India—such as IT specialists, engineers, sales staff, or R&D professionals. In addition, decide whether you need a short-term project team, a remote setup, or a long-term workforce.
Step 2: Partner with an EOR in India
Next, select a trusted provider like TMS to act as your Employer of Record. By contrast, forming a subsidiary would delay hiring and increase costs. Therefore, choosing an EOR ensures faster entry into the Indian market.
Step 3: Onboarding & Employment Contracts
The EOR drafts employment contracts that comply with Indian labor laws. Once signed, employees are seamlessly onboarded onto the EOR’s local entity. Consequently, you reduce legal exposure while ensuring full compliance.
Step 4: Payroll & Tax Management
Payroll outsourcing in India ensures accurate and timely salary disbursement. Moreover, the EOR also manages statutory deductions such as:
Provident Fund (PF)
Employee State Insurance (ESIC)
Professional Tax (PT)
As a result, payroll accuracy and compliance are guaranteed.
Step 5: Compliance & HR Support
Indian labor compliance can be complex. Fortunately, the EOR takes care of tax filings, statutory compliance, and HR services like leave tracking, attendance, and expense management.
In addition, this support allows Japanese companies to focus on growth while HR functions are handled professionally.
Step 6: Employee Benefits & Engagement
To attract and retain talent, the EOR provides mandatory benefits such as PF, ESIC, and gratuity. Moreover, companies can add perks like health insurance or allowances to boost employee satisfaction.
Therefore, engagement and retention become easier for Japanese firms entering India.
Step 7: Scale as Needed
Unlike a fixed legal entity, an EOR model gives flexibility. For example, Japanese companies can quickly scale teams up or down depending on project needs.
In fact, this makes it ideal for testing the Indian market before committing to a subsidiary setup.
Key Benefits of Using EOR in India for Japanese Companies
Faster Market Entry – Start hiring within 2–4 weeks.
No Entity Required – Avoid lengthy and costly incorporation.
Significant Cost Savings – No office setup or HR infrastructure needed.
Full Compliance – 100% adherence to Indian labor laws.
Payroll Accuracy – Timely processing and statutory deductions.
Flexibility – Hire permanent, contract, or project-based staff with ease.
EOR vs Subsidiary Setup in India
| Factor | EOR in India (via TMS) | Subsidiary Setup |
|---|---|---|
| Time to Hire | 2–4 weeks | 4–6 months |
| Compliance | Managed by TMS | Full responsibility of company |
| Costs | Low (service fee only) | High (legal, infra, HR costs) |
| Flexibility | High – scale quickly | Limited – fixed structure |
| Risk | Low – shared with EOR | High – full liability |
Final Thoughts
The India–Japan economic partnership provides a strong foundation for business expansion. However, setting up a legal entity in India can delay growth. Therefore, by using Employer of Record (EOR) services, Japanese companies can hire employees quickly, remain compliant, and focus on scaling.
With TMS as your EOR partner, expansion into India becomes simple, affordable, and risk-free.
🚀 Ready to hire in India without setting up a legal entity?
👉 Partner with TMS’s Employer of Record (EOR) services and start building your Indian workforce—fast, compliant, and hassle-free.
Team Management Services. All Rights Reserved | Privacy Policy | Terms & Conditions