A third-party service provider legally acts as an employer for a company’s employees in India, handling payroll, taxes, compliance, and other HR functions. For example, a global company expanding into India might use such a service to manage its Indian workforce without establishing a local entity. This allows the company to onboard employees quickly and efficiently while remaining compliant with Indian labor laws.
This approach offers significant advantages, including streamlined operations, reduced administrative burden, and minimized legal risks. It allows companies to focus on core business activities while ensuring compliance with complex and ever-evolving regulations in India. Historically, establishing a physical presence was necessary for international companies to operate in India. However, the emergence of this type of service has revolutionized market entry strategies, providing a more agile and cost-effective alternative.