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India Hiring Guide for UK Companies

Home » India Hiring Guide for UK Companies
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Why UK Businesses are Expanding to India

British companies are increasingly establishing operations in India, leveraging historical ties, complementary business ecosystems, and significant cost advantages.

Commonwealth Advantage

UK companies benefit from India's large English-speaking workforce, shared business practices, and simplified documentation requirements due to Commonwealth connections. Communication barriers are minimal compared to other markets.

Financial Efficiency

British firms achieve 45-60% cost optimization while maintaining UK-standard quality. We've helped London-based tech firms establish engineering teams in Bengaluru at a fraction of UK costs while maintaining high productivity.

24/7 Operational Model

The complementary time zones (UK and India have a 4.5-5.5 hour difference) create an ideal "follow-the-sun" model. UK teams can hand off work to Indian colleagues at the end of their day, enabling almost continuous business operations.

"SetMyCompany helped our London-based fintech startup build a team of 7 developers in Pune in just 10 days—without the headache of setting up an Indian entity. Their team managed everything from contracts to compliance, allowing us to focus on growing our business."

— Michael R., CTO at CloudTech Solutions, San Francisco

Legal Options to Hire in India from the UK

Employer of Record (EOR)

For UK companies 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: UK startups testing the Indian market, companies hiring a small team (1-20 employees), or businesses that need to move quickly.
Many British tech and financial services companies use our EOR solution as a quick entry strategy, later transitioning to their own entity as their Indian team grows.

Indian Subsidiary Setup

For UK companies planning a significant, long-term presence in India, establishing your own entity offers:
  • Complete control over operations, branding, and intellectual property
  • Tax optimization through the UK-India tax treaty (reduced withholding rates)
  • Cost-effectiveness for larger teams (20+ employees)
Setup timeline:Just 2-3 weeks from documentation to incorporation for UK companies, thanks to Commonwealth advantages and simplified document requirements.
UK companies enjoy a streamlined setup process as most UK documents can be used without additional apostille certification—a unique advantage over companies from other countries.
Book a 15-min Call with Our India Market Entry Experts

India EOR vs Company Incorporation – What's Right for Your US Business?

UK-Specific Considerations

British companies expanding to India enjoy unique advantages but face specific challenges that our specialized services address:

Contractor Transition Challenges:

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.

HMRC and Indian Tax Alignment:

UK businesses must navigate both HMRC and Indian tax authority requirements. Our experts ensure proper documentation for cross-border transactions, preventing double taxation issues and ensuring treaty benefits are properly applied.

Real-World Success:

We've helped a London-based fintech company establish a 15-person development team in Bengaluru using our EOR solution to meet an urgent product deadline. After proving the model worked, we helped them transition to their own private limited company within 2 weeks, all while maintaining business continuity.

Payroll & Tax Compliance for UK 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

UK-India Tax Treaty Benefits

  • Reduced dividend withholding tax (15-25%)
  • Royalty and fees for technical services capped at 10-15%
  • Tax credits to prevent double taxation
  • Clear permanent establishment criteria

Did you know? Maharashtra, Karnataka, and Tamil Nadu—where most UK firms establish operations—each have slightly different labor law provisions. For example, Maharashtra's Shop and Establishment Act has specific requirements for working hours and leave that differ from Karnataka's.

Common UK Company Pain Points

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

Reconciling UK accounting standards with Indian statutory requirements

Managing currency fluctuations between GBP and INR for payroll and financial reporting

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

Properly documenting intercompany transactions to avoid transfer pricing issues

Book a 15-min Call with Our India Market Entry Experts

How SetMyCompany Helps Uk Clients Enter India

We've helped dozens of British companies—from London startups to established enterprises—successfully build teams in India..

EOR Services

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

Entity Establishment

  • Streamlined Indian subsidiary setup for UK companies
  • Simplified documentation process (Commonwealth advantage)
  • Banking relationship setup
  • Tax registrations (PAN, TAN, GST)

Ongoing Support

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

UK Company Success Story

A Manchester-based software company needed to quickly establish a development center in India to support their growing client base but was concerned about operational complexity and maintaining quality standards.

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

  • 50% cost savings vs. UK hiring

  • Streamlined entity setup in 2 weeks

  • Software delivery time reduced by 40%

Frequently Asked Questions

Can we hire employees in India without setting up a legal entity?

Yes, UK companies can hire employees in India without establishing a legal entity by using our Employer of Record (EOR) services. This solution allows you to compliantly onboard Indian talent without the time, cost, and complexity of setting up a subsidiary.

How long does it take to start payroll in India?

With our EOR solution, UK companies can start payroll in India in as little as 3-5 business days. For companies establishing their own entity, the process typically takes 3-5 weeks from incorporation to running the first payroll cycle.

What's the difference between EOR and incorporation for UK companies entering India?

EOR allows UK companies to hire in India within days without establishing a legal entity, ideal for testing the market or hiring a small team. Incorporation provides more control and is cost-effective for larger operations but requires more time (2-3 weeks) and ongoing compliance management.

Do you support permanent, remote, and contractor hires in India for UK businesses?

Yes, we support all hiring models for UK companies expanding to India. We can help with full-time employees, remote workers, and contractors, ensuring compliance with Indian labor laws regardless of the employment relationship.

Ready to expand your UK business to India?

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

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