How Canadian Companies Can Hire Employees in India

Canadian companies can hire employees in India without an Indian entity by using an Employer of Record (EOR). The EOR becomes the legal employer under Indian law. It signs the employment contract, runs payroll and files Provident Fund, ESIC, income tax and Professional Tax, while the Canadian team directs the daily work. An Indian hire can start in 2 to 3 days once the documents are in. The fee starts from $49 per employee per month.

Employment rules in Canada are set province by province, so Canadian managers are used to checking local law before every hire. India works in a similar way: central labour codes apply everywhere, and a few items such as Professional Tax are set by the state.

How Canadian Companies Hire in India Without an Entity

Employer of Record in India already holds the Indian entity and the registrations that come with it. The company selects the candidate and signs a service agreement with the EOR. The EOR then handles the rest:

The company decides the role, pay and start date, and signs the EOR service agreement.
The EOR issues the Indian offer letter and employment contract.
The candidate submits identity, bank and tax documents.
The EOR registers the employee for PF and ESIC where they apply.
The first payroll runs and the employee starts work under the company’s direction.

This route suits a Canadian company that wants a first team of engineers, analysts or support staff in India without forming an Indian company first.

EOR or Own Indian Subsidiary

Point	Employer of Record	Own Indian subsidiary
Legal employer	The EOR	The Canadian company’s Indian subsidiary
Time to first hire	2 to 3 days once the documents are in	Several months, after incorporation, tax registration and a bank account
Directors	None needed	A private limited company needs at least two directors, and at least one must be resident in India
Compliance owner	The EOR	The Canadian company
Best for	First hires and market tests	Large permanent teams

Many companies start with an EOR. Then they move staff to a subsidiary once headcount justifies it. The full comparison is in EOR vs setting up a subsidiary in India.

What Differs From Canadian Practice

Canadian habit	How India differs
Employment standards set by province	India applies central labour codes across the country. State level items, such as Professional Tax, differ by state, and the EOR applies the right rules for each location.
CPP and EI remitted by the employer	The Indian equivalents are Provident Fund and ESIC. The EOR registers the employee, deducts and remits both.
Notice and severance set by province	In India, notice comes from the employment contract and is commonly 30 to 90 days, followed by a documented exit process. See termination, severance pay and notice period rules in India.
Canadian privacy law for employee data	India’s Digital Personal Data Protection Act also applies to data of employees in India, so the contract should cover both. See EOR and employee data privacy under the DPDP Act.

Time Zones and Working Hours

India Standard Time is UTC+5:30 and does not change with the seasons. Canada spans several time zones and changes its clocks. India is 9.5 hours ahead of Toronto in summer and 10.5 hours ahead in winter. It is 12.5 hours ahead of Vancouver in summer and 13.5 hours ahead in winter.

That leaves little or no shared working time with a west coast team, and a narrow window in the Indian evening for east coast teams. Focused development work copes well with this. However, support and customer success roles usually need shift patterns built around the overlap.

Statutory Costs a Canadian Employer Should Budget

The EOR fee is only part of the cost of an Indian employee. Employers also pay statutory contributions, which vary with salary:

Provident Fund. The employer contributes 12% of PF wages. The wage ceiling is ₹25,000 a month from 17 September 2026 (SCC Online).
ESIC. It applies to employees earning up to ₹21,000 a month, with an employer contribution of 3.25% of wages.
Overall. Employer statutory cost is roughly 4% to 12% of gross pay, depending on the salary.

The full list is in statutory benefits in India. Fee structures are compared in EOR pricing in India.

When an EOR Is Not the Right Fit for a Canadian Company

A large, permanent India team usually costs less through its own subsidiary over time. A PEO becomes an option only after the company owns a registered Indian entity (see PEO services in India). Contractors are a separate route with their own classification risk, covered in hiring contractors in India.

Frequently Asked Questions About Hiring in India From Canada

Can a Canadian company hire employees in India without an Indian entity?

Yes. An Employer of Record becomes the legal employer in India, so the Canadian company needs no Indian entity, registrations or bank account of its own for those staff.

How fast can an EOR start an employee in India?

An Indian hire can start in 2 to 3 days once the contract is signed and the documents are in. A foreign national who needs a visa takes roughly 2 to 3 months, depending on the country.

What replaces CPP and EI in India?

Provident Fund and ESIC. The employer contributes 12% of PF wages to the Provident Fund, and ESIC applies to employees earning up to 21,000 rupees a month. The EOR registers the employee and remits both.

What is the time difference between Canada and India?

India is 9.5 to 10.5 hours ahead of Toronto and 12.5 to 13.5 hours ahead of Vancouver, depending on daylight saving time, because India does not change its clocks.