Countries/India/In-country employment
South Asia · In-country employment
In-country employment in India
A foreign company without an Indian entity generally cannot employ staff on its own books. Permanent-establishment risk sits with tax counsel; the employment path is still a local contract in the state of work.
In-country employment is the usual route for a first country manager, a plant office, or a captive-centre seat that must start before a private limited company is ready. Convert later if you open one.
Plan an in-country hire- ✓
Local employment contract — The person is employed in the state of work — not unpaid, and not on a business visit.
- ✓
You still manage — Your managers set the work. We run the contract, EPFO / ESI filings, and payroll.
- ✓
No company first — Start the hire before you incorporate. Move them onto your entity when it exists.
Statutory stack
What sits on top of wages
India does not have one national employer-charge percentage. Provident fund, ESI, and wage floors follow the Code on Social Security, 2020, and state rules. The figures below are the statutory stack, not a salary survey.
| Item | 2026 rule |
|---|---|
| EPF (employer) | 12% of wages; of which 8.33% typically goes to EPS and the balance to EPF, plus 0.5% EDLI — wage ceiling still INR 15,000 unless you contribute on higher pay |
| ESI (employer) | 3.25% of gross wages where ESI applies (coverage generally up to INR 21,000 / month) |
| Gratuity | Accrues after five years' continuous service under the social-security code / Payment of Gratuity Act |
| 13th month | Not statutory; common in some offers and then treated as contractual |
| Minimum wage | Set by state and skill category — there is no single national monthly floor to quote |
Role salary ranges are not on this page. Open the 2026 salary guide when those figures are published.
Choose a path
In-country employment vs incorporating
The usual choice is in-country employment now, or an Indian private limited company when you want your own legal person as employer.
| In-country employment | Your own entity | |
|---|---|---|
| When to use it | First hires, a plant office, or a captive seat that must start before the company exists. | When you want your own Indian company as the employer of record on paper. |
| Who employs | A licensed local employer holds the contract. Your managers direct the work. | Your Indian company employs and files EPFO, ESI, and state returns in its own name. |
| Tax and PE | A local contract does not by itself settle permanent-establishment questions. Take tax advice on the activity. | An Indian company is the usual long-term structure once the activity is more than a first seat. |
Onboarding
From briefing to first payday
State registrations and KYC — not the search — set the calendar. Budget weeks, not a 5-day shortlist.
01
Briefing
State and city of work, role, start date, and whether this is a first hire or a team.
02
Contract
Written appointment letter and employment terms under the labour codes and state shops-and-establishments rules.
03
Filings
EPFO, ESI where applicable, professional tax, and state labour registrations for the place of work.
04
First payday
Monthly payroll, withholdings, and challans the inspector can read.
05
Convert or close
Move the person onto your Indian company, or offboard under local termination rules.
Compliance
Five points that change the hire
01
State of work, not HQ city
Wage floors, shops-and-establishments, and professional tax follow the place of work. A Bengaluru contract for someone sitting in Pune is the usual mistake.
02
Labour codes and state rules
The four labour codes are in force nationally; state rules and inspectors still lag. Write the contract to the code and the state notification that actually applies.
03
EPF wage definition
The social-security code's wage definition can pull more of the package into the PF base if basic pay is kept artificially low. Do not design a CTC split to dodge PF without advice.
04
No national 13th month
A bonus in the offer becomes contractual. Statutory bonus under the Code on Wages is a separate, capped regime for eligible employees — not a 13th salary.
05
Foreign nationals need a work visa
An employment visa and registration — not a business visit — if the person is not an Indian national.
Questions
FAQ
- Can a foreign company hire in India without incorporating?
- Not on its own books. The compliant path is a licensed local employer that issues the contract and files EPFO, ESI, and state returns, while your managers direct the work. That is in-country employment.
- Is there a single national minimum wage?
- No. Minimum wages are notified by state and often by skill category. Budget the state of work, not a national monthly figure.
- How much is employer provident fund?
- Generally 12% of wages on each side, with the employer's 12% split between EPS and EPF, plus 0.5% EDLI. The statutory wage ceiling remains INR 15,000 unless you contribute on higher pay. ESI employer share is 3.25% where ESI applies.
- Can we convert the person onto our own company later?
- Yes. When your Indian entity is ready, we move the employment across under local rules and close the in-country assignment.
Labour-law detail for India sits on the hiring guide.
Other markets
Other in-country employment pages
Reviewed 11 September 2026
This is a hiring briefing for multinational employers, not legal advice. Statutory rates move by city, province, and sector. Confirm the place of work before you issue an offer.
Sources
- Code on Social Security, 2020 — EPF Scheme, 2026, EPS Scheme, 2026, EDLI Scheme, 2026
- Employees' State Insurance Act / ESIC contribution rates in force in 2026
- Code on Wages, 2019 — state minimum-wage notifications
Plan an in-country hire in India
Tell us the city, the role, and when they need to start.