When does it make sense to switch from an EOR to a full India subsidiary?

EOR pricing is usually a per-employee monthly fee, which scales linearly with headcount. A subsidiary's compliance costs (statutory filings, a finance/HR function, registered office) are largely fixed regardless of headcount, so at some team size the subsidiary's fixed cost per employee drops below the EOR's per-employee fee. Where exactly that crossover happens depends on the EOR's pricing and the subsidiary's fixed overhead, but many companies find the economics tip in the subsidiary's favour somewhere between 10 and 20 employees.

Headcount isn't the only trigger, though. Companies also switch when they need direct control over benefits design and equity compensation, when local commercial contracts or licenses require an Indian legal entity rather than an EOR intermediary, or when the India operation has clearly moved from a pilot to a permanent part of the business. Switching is a planned transition — existing employees are usually transferred to the new subsidiary's employment rather than simply re-hired, which needs its own handling to avoid a break in continuity of service.