Insights
Operating in India Without a Company
Insights · By Chen ChunJie · Published 8 November 2026
Many foreign companies start in India with no local entity. This guide explains what you can do without an Indian company, when you need one and how to move from one stage to the next.
Last reviewed in November 2026 against the four Labour Codes in force since 21 November 2025, current EPF and ESI rates and the Income-tax Act, 2025. State rules and rates change, so we confirm them for each engagement.
What you can do without an Indian company
| Activity | Company needed? |
|---|---|
| Employing staff | Yes, or an employer of record |
| Engaging independent contractors | No, if they are genuinely independent |
| Selling services from abroad | Not for hiring, but check GST and tax |
| Opening an office or a GCC | Yes |
Why you cannot employ directly from abroad
An Indian employer registers with the EPFO, ESIC, the state and the tax department, deducts TDS and files returns. These steps need a local legal presence.
No Indian company yet? Our Local Team can be the legal employer while you manage the work. See Employer of Record in India.
When an Indian company makes sense
Once the team is large and long-term, or you want a global capability centre, a private limited company is usually the next step. Our guide to registering a company in India explains the process.
Permanent establishment risk
Indian tax authorities look closely at service and agency PEs. An employer of record does not by itself create a permanent establishment, but employees who conclude contracts for you or work as your fixed place of business can. Review revenue-generating roles with your tax adviser.
Moving to your own company
When your company is registered, we agree a transfer date and the employee joins your company, with EPF and service continuing.
FAQ: operating without a company
Can a foreign company employ people in India directly?
Not without registering locally. An employer of record handles it.
Can I hire contractors without a company?
Yes, for genuinely independent work. See On-Demand Talent in India.
Does an EOR create a permanent establishment?
Not by itself, but role design matters.
Hiring your first employee in India?
Our Local Team employs the person, runs payroll with EPF, ESI and TDS, and handles the paperwork, while you manage the day-to-day work.
Related
How we employ your team in India.
Contracts, leave, termination and more.