The Ultimate Guide to EOR Service Best Model to Start a Business Activity in India
                     The Ultimate Guide to EOR Service: 
 Best Model to Start a Business
Activity in India
India, a land of rich cultural and lifestyle diversity, has 
marked its  presence as a growing economic superpower. 
About 20 years ago,  India transitioned from a socialist state 
to a liberal marketplace. Today,  India stands as the 6th 
biggest economy globally with a GDP of over
$2.6 trillion.
India has a vast talent pool. A recent report of an 
assessment of  65,000 graduates states that 40% of India’s 
youth is job-ready. India  offers extraordinary and digitally 
skilled talent at effectively affordable  labor costs.
Expanding Business to India
India leads an attractive business destination for global 
brands owing  to its optimistic spending behavior, business-
friendly policies, and rich  talent pool that can be hired at 
affordable resource costs. When a  business aims at 
expanding in India, it focuses on establishing an  overseas 
territory and growing its strength to service clients.
Overseas businesses usually promote remote teams and 
virtual
working environments. This is to facilitate their need for 
infrastructure  as no bar. Hiring talent is one part but 
retaining that resource remains  a challenge.
Also, for any company from across the globe willing to set 
up an  operation in India, it is essential to research and 
navigate local labor  laws to steer clear of employment 
risks. Keeping track of these  changes requires you to 
incorporate finance, HR, and payroll  specialists into your 
team.
Wouldn’t it be easier if you could get away from this 
nightmare of  adhering to complex Indian statutory tax and 
labor law compliances?  Hiring employees in a new country 
is lengthy, complicated, and  expensive. You have to 
establish a local entity or a subsidiary, and  deal with 
currency conversions and overseas banking. These tasks  
are tedious and take time away from productive work.
To avoid this hassle, PEO (Professional Employment 
Organization)  and EOR (Employer of Record) concepts were 
introduced in the early  1970s. For companies operating in a 
foreign land, PEO became a  useful way of outsourcing 
particular HR functions and reducing costs.
Whereas, for businesses looking at hiring talent in other 
countries  without forming a legal entity, EOR became 
the right fit.
The early version of PEO services: US-based model
In the US domestic model, the early version of the ‘co-
employment’  model got recognized by the legislature. It 
gained popularity as a way  of cooperating in the 
administration of employment contracts between  the 
employing company, an administrative company, and the  
employee. On a formal basis in law, the PEO agencies began 
offering  more comprehensive services than employee 
leasing.
The DIY (do-it-yourself) approach of incorporating, 
registering, and  running a local payroll was worthwhile for 
companies looking at  commitment to a country. But for those 
willing to enter new markets in  other countries, leveraging 
international PEO/ EOR became an ideal  alternative.
The modern structure of International PEO/ EOR services
There are small differences between the traditional 
PEO/EOR model  and the International PEO/EOR. Some firms 
coined the terms
International PEO/EOR to describe the services offered 
globally rather  than a country-based model. In short, the 
difference between the two  can be better understood as – in 
the case of PEO, you must have a
local entity in foreign land whereas, for an EOR, you don’t 
need a local  presence.
What is International PEO/EOR?
The international PEO (Professional Employment 
Organization) Or  EOR (Employer of Record) services equip 
an international business  by providing human resources 
services, including international hiring  and employment. It 
is a business-to-business arrangement between  the 
company and the service provider. The latter handles the 
defined
aspects of the employees on behalf of the company. The 
service  provider is a registered employer of your 
remote team. You can  manage the employee’s day-to-
day work and execution  responsibilities, and decide 
who you want to hire.
How does an International PEO/EOR work?
International PEO/EOR service providers have their own legal, 
 registered entities in foreign countries. They employ your 
staff, provide  agreed infrastructure, and make them 
available to you for exceptional  work. International PEO/EOR 
service providers then manage their  monthly payroll, 
taxation, insurance, HR admin, and related  compliance with 
local laws on your behalf.
This arrangement gives you access to foreign markets where 
you can  build your remote team and onboard local talent. 
The service provider  becomes the best advisor for laws 
regarding local contracts, worker  protections, notice periods, 
termination rules, and severance pay.
Why use an International PEO/EOR?
Since International PEO/EOR service providers are the legal  
employers for your team, it eliminates your administrative 
efforts. You  get freedom from handling staffing 
responsibilities and keeping up with  foreign compliance and 
tax laws. Their services and experience offer  superior risk 
mitigation without forming a business entity abroad.
Competitive advantages
● Increased employee retention: A PEO helps you offer 
your  employees attractive benefit plans. This boosts 
the employee  retention rate.
● Experienced management team: You get access to  
experienced professionals in HR, benefits, payroll, 
taxation, and  other employee management functions.
● Better control: You get better control over employment-
related  regulatory compliance and employee-related 
disciplinary issues.
● Increased access to employee life-cycle: You can 
provide  effective management and access 
employees online with a  self-service portal. This 
eases the monitoring of employee  records, pay 
sheets, leave tracking, tax deductions, and full  
tracking of employees wherever required.
For growth-minded companies, international expansion is not 
an end  goal but a start to a challenging new venture. There 
are many  considerations for your business on the eve of 
international  expansion. Companies expanding to India find 
it relatively easy to  form collaborative partnerships with 
local EOR service providers. How  exactly does an 
international PEO support your business throughout  this 
exciting transition?
Start your business journey in India with EOR
Formality Pty Ltd., an Australia-based company, willing to 
expand  overseas was in search of an India-based partner 
that would have a  smooth and cost-effective operational 
process. Initially, they had three  contractors working for 
them and this cost them to lose a lot of  productive time. In 
addition, despite support from the local partners,  they had 
to manage logistical issues, expense reimbursements, and
individual compliances.
To address these pain points, they were in search of a local 
service  provider and decided to partner with Remunance 
for EOR services.  Remunance created a formal business 
plan that addressed relevant  business, employment, and 
tax laws. This in itself made for a  smoother and more cost-
effective operational process.
Most companies fundamentally choose this option of 
engaging with a  local partner who can employ individuals on 
their infrastructure. It also  has a great potential for reward 
as they do not have to manage HR,  benefits, and payroll. 
However, for businesses moving internationally,  costs and 
risks are involved. Let us understand how setting up a  
subsidiary becomes a seamless journey when you partner 
with the  right PEO.
As one of the oldest providers of employer of record (EOR) 
services in  India, Remunance has the resource depth, 
knowledge base, and  network to help you. For over 15 years, 
we have helped clients from
North America, Europe, and Asia with 360-degree support 
services.
Remunance has earned credibility by providing on-the-ground 
support  necessary to thrive In India. As EOR, Remunance 
helps hire best-fit  employees, onboard them smoothly, keeps 
a check on compliance,  and manages their performance and 
payments. But above all, they  focus majorly on improving 
talent retention. For companies that have a  remote team, 
freelancers, or contractors working for them,
Remunance provides customized services and a self-serve 
platform  that helps you take control over the IT, 
infrastructure, and logistics  support.
Connect with our 
experts
Remunance helps you explore the option that best suits 
your  needs:
Though most companies prefer our EOR services, Remunance 
also  extends support in the incorporation of offices for 
businesses that wish  to form subsidiaries in India. Let us 
have a glance at why a selected  few businesses chose to 
extend their business operations in India:
Waltham, a USA-based RTOS-Platform company 
IntervalZero was  seeking developers for Windows-based 
RTOS. They were on the
lookout for a reliable and experienced employer of record to 
make it  the right attempt. After screening through 
outsourcing partners, joint  ventures, vendor consultants, 
and other types of alliances, they found  Remunance.
After the initial discussion with their CTO Brian, Remunance 
took  charge and planned a strategy to locate resources with 
potential, and  trained them as per the job requirement to 
make them productive. As  we built a core team, the 
operations achieved every milestone that
was set out.
For two long years, Remunance handled legal compliance, 
benefits,  payroll, and other HR functions of IntervalZero. 
With the seamless  functioning and credibility added to 
their brand identity, Jeff (CEO)  took a decisive step to form 
a subsidiary in India using Remunance  services. To help 
them establish a business presence in India,
Remunance set up a unique separate office infrastructure. 
Finally, we  smoothly transitioned the core functions to the 
IntervalZero team.
To learn more about subsidiary formation, check our 
latest blog.