EOR vs Contractor vs Own Team in India
November 5, 2026 • By Dheeraj Lalchandani
An employer of record (EOR) is a company that employs your worker in India on paper, so you need no Indian entity. You find the people and direct the work. A contractor works for themselves and is not your employee. With your own Indian entity, you employ and run everything. With a managed team, which GCC Nexus offers, a provider finds and vets the engineers and employs them for you. No route is best for everyone.
Written by Dheeraj Lalchandani. Last updated: October 2026. GCC Nexus offers both an EOR service and managed teams, so we are not a neutral party. This guide says plainly when each route, including ours, is the wrong one. It is general information, not legal or tax advice.
- What an employer of record is
- The routes at a glance
- How EORs charge
- When an EOR is the right call
- When your own entity makes sense
- When a managed team is the better route
- Questions to ask any EOR before you sign
- Decision scenarios
What an employer of record is, in plain terms
An employer of record is a company that is the legal employer of a worker on paper, usually through its own registered company in the country. The worker signs an employment contract with the EOR. You pay the EOR, and the EOR pays the worker.
What an EOR does. Services differ by provider, but the usual scope is:
- issues the employment contract and handles onboarding and exit paperwork;
- runs payroll, statutory contributions and tax deductions;
- administers benefits that employers in India provide;
- keeps the filings that come with being an employer.
What an EOR does not do. It does not find the person, vet their skills, manage their daily work or build your team's culture. That stays with you. Some providers add recruiting as a separate service. Ask what is in scope in writing.
Who directs the work matters. If you decide what the person does each day, the work looks like employment, which is why a contractor agreement is often the wrong tool for an engineer who is part of your team.
The routes at a glance
A contractor and an EOR are two ways to engage a person you have already found. Your own entity and a managed team are two ways to build a team over time.
| Contractor | EOR | Your own Indian entity | GCC Nexus managed team | |
|---|---|---|---|---|
| Legal employer | No employer. The contractor is self-employed | The EOR, on paper | Your Indian company | GCC Nexus |
| Indian entity needed on your side | No | No | Yes. It is the route | No |
| Payroll and statutory compliance, day to day | The contractor handles their own tax | The EOR | You, with your advisers | GCC Nexus |
| Who finds and vets the engineers | You | You, unless you buy recruiting separately | You | GCC Nexus, using TalentRadar and independent domain experts |
| Control of daily work and culture | Limited by design: the contractor decides how to work | You direct the work | You | You direct the work; it is your team |
| What the cost is made of | The agreed fee to the contractor | Salary and statutory costs passed through, plus the provider's fee | Salary and statutory costs, plus the people and advisers who run the entity | Salary and employer costs for each engineer, plus GCC Nexus's service |
| How fast a first engineer can start | Depends on the person's availability | Depends on the provider | Depends on your own preparation | A shortlist of 5 vetted profiles in 7 days; first engineer live in about 2 weeks |
| Best for | A defined deliverable that the person runs on their own | One to a few people you have found, or a test of the market | A long horizon and the wish to run it all yourself | Building a team and not wanting to run hiring and employment |
| Not the right choice when | The person works like a team member for months | You need help finding and vetting people | You want to start without running compliance | The work is a short task, you are choosing on price per hour, or another firm is delivering a fixed-scope project |
The cost row describes what you pay for, not how much. Rates vary by provider and engineer category, so compare written quotes for the same engineer. To compare engineer pay, see the India salary benchmark, which separates salary from total employer cost.
How EORs charge: pricing models in plain terms
EOR providers describe three common pricing models. Whichever you are quoted, the monthly bill has the same parts: the worker's salary, the employer's statutory contributions and benefits, and the provider's fee.
- Flat fee per employee per month. The fee does not change when salary changes. It is easy to budget.
- Percentage of salary. The fee grows with pay, so it costs more for senior engineers.
- Hybrid. A base fee plus a variable part, often tied to services you add.
Ask about three things that sit outside the headline fee: whether there is a one-time or exit fee, which costs are passed through at cost and which carry a margin, and what the fee covers if you add benefits or equipment. Then ask for the total monthly cost for the specific engineer you plan to hire. The salary and the total employer cost are different numbers, so keep them on separate lines when you compare quotes.
When an EOR is the right call
This is GCC Nexus's view. An EOR is the sensible choice when:
- you have already found one to a few people and want to employ them properly;
- you are testing India before committing to a team;
- the horizon is short, or you do not know it yet;
- you do not want to run hiring and are fine with a smaller scope.
It is the lighter route when the question is "can we employ these people?" and not "can we build a team?".
When your own entity makes sense
An Indian company of your own gives you the most control. It suits a company that expects to stay in India for years, wants its own HR, finance and legal team there, and has the appetite to run payroll, statutory filings and accounts, either itself or with advisers. You are then the legal employer, so every employment obligation sits with your company.
Some companies start with an EOR or a managed team and decide on their own entity later. Ask any provider you use how a move would work before you sign (see the checklist below).
When a managed team is the better route
In the GCC Nexus managed-team model, GCC Nexus is the legal employer of the engineers. Your team directs the work and owns the code. GCC Nexus finds the engineers with TalentRadar, its AI outbound platform that finds engineers who aren't looking, with no job ads. It sources top 1% engineers by company pedigree from India's best product companies, and candidates have already been interviewed by independent domain experts through a 7-step technical and cultural vetting process before you see them. GCC Nexus also handles employment, payroll, compliance, office and equipment.
The legal arrangement looks like an EOR's: the provider is the employer on paper. The difference is what else the provider does. An EOR employs someone you found. A managed team also finds and vets them, gives them an office and equipment, and builds the team with you.
Timing, as GCC Nexus states it: a shortlist of 5 vetted profiles in 7 days and your first engineer live in about 2 weeks. That is for the first engineer, not a full team. A team of 5 to 10 engineers is typically fully onboarded within 6 to 8 weeks from the first hire going live.
GCC Nexus's recommendation: if you need to find and vet engineers, and you expect a team rather than one or two people, the sourcing work is the part a managed team takes off your plate. We have no headcount line to give you. The case studies below show how teams have grown.
Questions to ask any employer of record before you sign
This list works for any provider, including us. Ask for the answers in writing.
- Who is the employer named on the contract? Ask for the legal name of the company.
- How is IP assigned? Ask where the assignment of the engineer's work to your company is written, and to see the clause.
- What happens if you later move the person to your own company? Ask for the process, any notice and any fee.
- How are fees structured? Flat, percentage or hybrid, and which costs are passed through at cost.
- What are the minimum term and the exit terms? Ask what you owe if you end early.
- How are termination and notice handled? Ask who decides, who communicates, and what the provider's process is. We offer no legal conclusion here; get the process in writing.
- How are data and equipment handled? Who owns the laptop, where the work data lives and what happens when the person leaves.
- What insurance and liability cover does the provider hold? Ask what it covers and for how much.
- Who is your day-to-day contact? A named person, not a queue.
- Can you speak to clients of a similar size? References for one to ten people are different from references for fifty.
Decision scenarios
| If this is your situation | Consider | Why |
|---|---|---|
| You have found two engineers for a six-month pilot and will decide after | EOR | Light to start, no entity, and you can stop or expand after the pilot |
| You plan to have 15 engineers in India within a year and need to find them | Managed team | Sourcing and vetting is most of the work, and the provider carries it |
| You need one specialist for a fixed project with a clear deliverable they run themselves | Contractor | The work is independent, so a contract for the deliverable fits |
| The person will work like a team member for the next year | EOR or managed team, not a contractor | If you direct the day and the role is ongoing, it looks like employment |
| You expect to be in India for many years and want your own HR and finance there | Your own entity, possibly after starting with a provider | It gives the most control, with the most to run |
What a managed team looks like in practice
These are the results on GCC Nexus's case study pages.
- Shopping Gate: a full cross-functional team of 15 operational within 3 months; first 2 hires within 2 weeks.
- Barq: 100+ engineers today; first 10 hires in 8 weeks.
- Advanced Infrastructure started with one data engineer in India. It then built up its backend, DevOps and frontend teams there, and the team now stands at 24 engineers.
What this guide does not cover
This is not legal or tax advice. Whether work done in India creates a taxable presence for your company, how to classify a contractor under the law, and how employment and exit rules apply to a specific person are questions for advisers who know your facts. We also leave out the rules of other countries. For the cost of an engineer, see the India vs US and India vs UK cost comparisons, and for the wider picture of an India team, the India GCC setup guide, how it compares with outsourcing, and the cost of an India team. If you are hiring engineers, start at hire engineers in India or see our solutions.
FAQ
What is an employer of record in India?
An employer of record (EOR) is a company that legally employs your worker in India on paper, usually through its own Indian company. It issues the employment contract and runs payroll, statutory contributions and tax deductions. You find the person and direct their daily work.
Do I need an Indian entity to employ engineers in India?
To employ people yourself you need a legal employer in India, which can be your own Indian company. You can also work with a provider that employs them on your behalf, such as an EOR or a managed team. You can search and interview without one.
EOR or own entity: how do I choose?
GCC Nexus's view: an EOR suits one to a few people you have found, a test of the market or a short horizon. Your own entity suits a long horizon and the wish to run HR, payroll and compliance yourself. Some companies start with a provider and decide on an entity later.
What is the difference between an EOR and a managed team?
In both, the provider is the legal employer on paper. An EOR employs someone you found. In GCC Nexus's managed-team model, GCC Nexus also finds and vets the engineers, handles employment, payroll, compliance, office and equipment, and you direct the work and own the team.
Can I move engineers from an EOR to my own team later?
Ask the provider before you sign. A change of employer usually means a new employment contract with the new employer, agreed with the engineer. Terms depend on the provider's contract, so get the process, any notice and any fee in writing.
What should I ask an EOR before signing?
Ask who the employer is on the contract, how IP is assigned, what moving the person to your own company would involve, how fees are structured and what is passed through at cost, the minimum term and exit terms, how termination and notice are handled, how data and equipment are handled, what insurance the provider holds, who your contact is, and for references from clients of a similar size.
How fast can a managed team start?
GCC Nexus sends a shortlist of 5 vetted profiles in 7 days. Your first engineer is live in about 2 weeks. That refers to the first engineer, not a full team.
Who owns the code and IP under each route?
The contract decides, not the name of the route. Check that each agreement assigns the work to your company and ask to see the clause. In the GCC Nexus managed-team model, your team directs the work and owns the code.
How do EOR pricing models work?
Providers describe three: a flat fee per employee per month, a percentage of salary, or a hybrid. The monthly bill is the worker's salary, employer statutory contributions and benefits, and the provider's fee. Ask about one-time and exit fees and which costs are passed through at cost.
What is the difference between an EOR and a PEO?
PEO stands for professional employer organisation. The term is mostly used in the US for a provider that shares the employer role with you through its own company. For hiring engineers in India, the routes that matter are the ones in this guide. If a provider offers something it calls a PEO for India, ask who the legal employer is on the contract and who runs payroll, then compare it with the routes above on that basis.
Does an EOR or a managed team handle visas?
This guide covers engineers who live and work in India for a team elsewhere. Moving someone to another country is an immigration matter under that country's rules, so ask an immigration adviser and ask any provider, in writing, what they do and do not handle.
How do I compare EOR fees fairly?
Ask every provider for the full price in writing, on the same basis: what the monthly fee covers, what is billed on top, any minimum term, and what happens when you end the arrangement. A flat fee and a percentage of salary only compare once you put the same salary into both. The questions to ask before you sign are in the section above.
If you want a shortlist for a specific role, tell GCC Nexus what you are hiring for. For the cost of an engineer, start at the India salary benchmark.