What's the difference between hiring via an Employer of Record and setting up an India subsidiary?

Under an EOR arrangement, a third-party entity already registered in India becomes the legal employer of record for your India-based staff — handling the employment contract, payroll, statutory withholdings, and compliance — while the staff work exclusively for and are directed by your company day-to-day. You never need to incorporate an India entity to start hiring.

A subsidiary, by contrast, is your own India company, which becomes the direct employer. This requires incorporation, its own compliance obligations, and generally more upfront cost and time, but gives full control over employment terms, benefits structuring, and no per-employee EOR fee once you're operating at scale. EOR tends to make sense for testing the market or hiring a handful of people quickly; a subsidiary becomes more cost-effective once headcount and long-term commitment justify the setup investment.