Nov 28, 2025

As India becomes a preferred destination for global hiring, the Employer of Record (EOR) model has gained momentum. However, the regulatory landscape is still evolving particularly around taxation, social security, and employee benefits. Understanding these nuances is crucial for every organization planning to scale talent operations in India through an EOR partner.

Key Challenges in India’s EOR Landscape

Challenge

Impact

Double taxation risk

AI Employees may get taxed in both India and their home country if not structured right

Lack of benefit parity

EOR employees may receive fewer perks than direct hires, affecting retention

Regulatory fragmentation

Laws in transition and state variations add complexity

Ambiguity in dispute regulation

Confusion on whether grievances go to the EOR or the client

Positive Future Trends

India is actively addressing gaps in the EOR ecosystem

Social security expansion may soon extend portable benefits to EOR workers, boosting long-term retention
Tax clarity and PE risk rules expected in upcoming guidelines should simplify tax treatment of cross-border work
Data protection laws now mandate stronger HR & payroll security under the Digital Personal Data Protection Act (2023)

Recommendations for Global Employers

Global organizations increasingly adopt an EOR model to:

Access India’s high-quality talent without setting up a local entity
Scale teams faster and cost-efficiently
Test market expansion before committing to a legal presence

However, regulatory gaps, if mishandled, can lead to:

Permanent establishment risk
Legal disputes with employees
Tax liabilities for both company and talent
Employer-brand erosion in the job market

Companies that select a compliant, transparent, and employee-centric EOR partner gain:

Higher retention
Stronger employer brand in India
Zero compliance deviations
Safeguarded tax and labor law position

India continues to be a powerhouse for global distributed team building and a firm's success depends on choosing the right EOR partner

Why PR GLOLINKS is the ideal EOR partner for global firms

We go beyond payroll outsourcing to operate as an end-to-end strategic India employment partner. Unlike standard EORs that offer basic compliance and transactional payroll, we support hiring with talent, brand storytelling and advisory, deliver end-to-end recruitment solutions with zero-deviation compliance across laws, provide guidance to prevent double taxation and ensure benefit parity to boost retention.

For global employers, this means no compliance surprises, higher employee loyalty and productivity, seamless integration with global teams, and risk-free scale-up in India. Whether hiring 5 or 500 employees, P.R.GLOLINKS builds distributed teams in India that are compliant, motivated, and operationally smooth.

Know more about how we enable distributed hiring.

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