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Why US Businesses are Expanding to India

US companies are increasingly establishing a presence in India to leverage specialized talent, cost advantages, and access to one of the world's fastest-growing markets.

World-Class Tech Talent
Access India's vast pool of 5M+ STEM graduates annually, with expertise in AI, machine learning, data science, and engineering. Many US tech giants like Microsoft, Google, and Amazon have established successful R&D centers in Bangalore and Hyderabad.
Cost Optimization
US corporations achieve 45-65% cost savings compared to domestic operations. We've helped American startups like RapidAI and CloudScale hire quality engineering talent at 30-40% lower costs while maintaining equivalent productivity and quality.
Innovation Leadership
India hosts GCCs for over 70% of Fortune 500 US tech companies. These aren't just support centers—they're strategic innovation hubs generating valuable IP and driving product development for global markets, as seen with Intel, Adobe and Microsoft.
"SetMyCompany helped our San Francisco-based SaaS company hire 5 engineers in Bangalore in just 7 days—without the cost and complexity of setting up an Indian entity. Their team handled everything from contracts to compliance."
— Michael R., CTO at CloudTech Solutions, San Francisco
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Legal Options to Hire in India from the US

Employer of Record (EOR)

For US companies like Appify, Clockwise, and DataSync looking to quickly hire in India without establishing a legal entity, our EOR solution lets you:
  • Hire full-time Indian employees in as little as 3-5 day
  • Skip entity setup costs, ongoing compliance requirements, and local accounting
  • Focus on business results while we handle payroll, taxes, benefits, and compliance
Perfect for: US startups testing the Indian market, companies hiring a small team (1-20 employees), or businesses that need to move quickly.
Many US tech companies like San Francisco-based TechFlow use our EOR solution as a quick entry strategy, later transitioning to their own entity as their Indian team grows.

Indian Subsidiary Setup

For US companies planning a significant, long-term presence in India, like Amazon, Google and LinkedIn have done, establishing your own entity offers:
  • Complete control over operations, branding, and intellectual property
  • Tax optimization through the US-India tax treaty (reduced withholding rates)
  • Cost-effectiveness for larger teams (20+ employees)
Setup timeline:3-4 weeks from documentation to incorporation, with our team handling the entire process for companies like Boston-based HealthTech Solutions.
US documents require apostille certification for acceptance in India—a process we manage seamlessly for our American clients from New York to California.
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India EOR vs Company Incorporation – What's Right for Your US Business?

US-Specific Considerations

American companies expanding to India face unique challenges that our specialized services address:

IRS Compliance:

Many US companies struggle with Controlled Foreign Corporation (CFC) reporting requirements for Indian subsidiaries. Our team includes US tax experts who ensure compliance with both IRS regulations and Indian tax laws.

Entity Costs:

American businesses often find the ongoing compliance costs of an Indian entity unexpectedly high. Our EOR service eliminates these costs while still allowing you to build a team in India—or we can manage your entity compliance at a predictable fixed rate

Real-World Success:

We've helped a San Francisco-based AI startup hire 12 engineers in Bangalore within 10 days, bypassing the lengthy entity setup process. They later transitioned to their own subsidiary as their team grew to 50+ employees, with our team managing the entire transition.

Payroll & Tax Compliance for US Companies in India

Payroll Regulations

  • Monthly salary payments required by 7th of following month
  • Mandatory PF (Provident Fund) contributions at 12% of basic salary
  • Gratuity provisions required for employees with 5+ years service
  • TDS (Tax Deducted at Source) filing by employers

US-India Tax Treaty Benefits

  • Reduced dividend withholding tax (15-25%)
  • Royalty and fees for technical services capped at 15%
  • Foreign tax credits to prevent double taxation
  • Clear Permanent Establishment criteria

Did you know? The Income Tax Department of India requires all US companies with Indian subsidiaries to register for PAN (Permanent Account Number) before processing any local payments.

Common US Company Pain Points

Many American businesses struggle with these aspects of Indian payroll and taxation:

Navigating complex monthly, quarterly, and annual filings with Indian tax authorities

Understanding India's evolving GST (Goods and Services Tax) implications

Properly documenting intercompany transactions to avoid transfer pricing issues

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How SetMyCompany Helps US Clients Enter India

We've helped dozens of American companies—from Silicon Valley startups to established enterprises—successfully build teams in India.

EOR Services

  • Hire Indian employees in days, not months
  • Compliant contracts tailored to US company needs
  • Full payroll, benefits, tax and compliance management
  • IP protection clauses meeting US standards

Entity Establishment

  • End-to-end Indian subsidiary setup
  • Document apostille management
  • Banking relationship setup
  • Tax registrations (PAN, TAN, GST)

Ongoing Support

  • Accounting and tax compliance services
  • HR advisory and employee relations
  • Immigration support for expat employees
  • Entity-to-EOR or EOR-to-entity transitions

US Company Success Story

A Boston-based healthcare technology company needed to quickly hire specialized developers in India but was concerned about IP protection and compliance with both US and Indian regulations.

Our solution: We implemented our EOR solution to hire their team of 8 engineers within 7 days, with contracts that included robust IP protection clauses. After 6 months of successful operations, we helped them establish their own Indian entity and seamlessly transition employees to the new structure.

Today, they operate a 40-person development center in Hyderabad, with SetMyCompany managing their ongoing compliance and accounting functions..

Results Achieved

  • Team operational in 7 days

  • 40% cost savings vs. US hiring

  • Zero compliance issues

  • Product launch accelerated by 4 months

Ready to expand your US business to India?

Our experts specialize in helping US businesses navigate the complexities of the Indian market. Get personalized guidance for your expansion strategy.

Book a 15-min Call with Our India Market Entry Experts
Download India Hiring Checklist (PDF)

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Contact Information

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+91 9986888900

Email

support@setmycompany.com

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271, 1st Floor, 14th Cross, CMH Road, Indiranagar, Bengaluru - 560038, Karnataka