EOR vs. Setting Up a Subsidiary in India: Which Is Right for You?
A private limited company gives you permanence; an EOR gives you speed. Here's an honest comparison — and when it makes sense to switch.
Both routes let you build a real team in India. They differ in how fast you can start, how much you control, and how much compliance you carry. Here's a straight comparison — including when we'd tell you to switch away from an EOR.
Speed and cost to start
An EOR lets you hire in days with no setup cost or capital. A subsidiary takes weeks to incorporate, needs a registered office and local directors, and carries setup and ongoing costs whether or not you've hired anyone yet.
Control and permanence
A subsidiary is your own legal presence — full control over IP, banking, contracts and a permanent brand in-market. With an EOR, the provider is the legal employer; you keep full day-to-day control of the work, but the entity isn't yours.
Compliance burden
With a subsidiary, statutory registrations, payroll, audits and filings are your responsibility (usually via advisors). With an EOR, that burden sits with the provider — one predictable fee instead of a compliance function to build.
When to switch
- Start with an EOR when you're testing India, hiring your first few people, or want speed and flexibility.
- Move to a subsidiary when headcount is large and stable, you need your own IP or banking presence, or the per-employee economics tip in its favour.
- The best partners make that transition smooth — employees move across without disruption to pay or benefits.
There's no universally right answer — only the right answer for your stage. Many companies run an EOR for a year or two, then graduate to a subsidiary once the team and the case are proven.
