Professional Employer Organization (PEO) Services in India for Korean Companies
Korean companies expanding in India often ask for a PEO, but a PEO works only for a company that already has its own registered Indian entity. A Korean firm without one that hires through a PEO finds out late that it cannot, and the first hires wait for incorporation. The fix is to choose by entity status: an Employer of Record if there is no entity yet, a PEO if there is one.
Why Korean Companies Look at India
Korean companies invested over $6.69 billion in India between April 2000 and March 2025. Samsung, Hyundai and LG are the best known names. Past investment went mainly into automobiles, electronics and steel, and talks in April 2026 pointed to semiconductors, shipbuilding, energy systems and advanced mobility. The India Korea CEPA came into force in 2010, and bilateral trade of $25 billion to $28 billion is targeted to reach about $50 billion by 2030 (source: Outlook Business).
PEO or EOR: Which One Fits
| Situation | Route | Reason |
| No Indian entity yet | Employer of Record | The EOR is the legal employer, so no entity is needed |
| Indian subsidiary or branch already registered | PEO | The company stays the employer and the PEO runs HR, payroll and compliance |
| Entity planned in the next year or two | EOR first, then transfer | Staff move to the entity once it is ready |
| Large team planned for many years | Own entity with in house HR | Fees on many employees can exceed entity costs |
Details on each route are in Employer of Record in India and PEO services in India.
What the Provider Handles
| Area | What is handled |
| Employment contract | Contract under Indian law with probation, notice and leave terms |
| Payroll and tax | Monthly salary, TDS, payslips and Form 16 |
| Statutory schemes | PF and ESIC registration, deduction and remittance |
| Benefits | Gratuity, leave and group insurance where chosen |
| Reporting | Payroll registers and filing proof for the head office |
| Exit | Notice, final settlement and exit documents |
Rules Korean Employers Must Plan For
| Item | Rate or rule |
| Employer EPF | 12% of wages, plus 0.5% EDLI and 0.5% admin charges; wage ceiling of ₹25,000 a month from 17 September 2026 for mandatory coverage |
| Employer ESIC | 3.25% of wages for employees earning up to ₹21,000 a month; employee pays 0.75% |
| Due date | 15th of the following month |
| Final settlement | Within two working days of an exit |
| Fixed term gratuity | Payable after one year of service |
The EPF wage ceiling is from SCC Online, and other rates are from CorpReady. The four labour codes took effect on 21 November 2025 (DLA Piper). Korean head offices that report in Korean may ask the provider for summaries in a form the finance team can use.
Choosing a Provider
| Check | What to ask |
| Entity status | Is this an EOR or a PEO, and which fits the current setup? |
| Employing entity | Which Indian entity signs the contracts? |
| Filing proof | Are PF, ESIC and TDS proofs shared every month? |
| Transfer path | Can staff move to the company’s own entity later? |
| Reporting | What reports reach the head office, and in which language? |
| References | Can clients of similar size be contacted? |
Korean firms setting up a technology centre can also read about Global Capability Centers. More hiring questions are answered in the hiring in India FAQ. EOR Services India fees start from $49 per employee per month.
Questions About PEO and EOR Services for Korean Companies
Can a Korean company hire in India without an Indian entity?
Yes, through an Employer of Record. A PEO cannot be used without the company’s own registered Indian entity.
What is the difference between a PEO and an EOR?
A PEO supports a company that employs through its own Indian entity. An EOR is the legal employer, so no entity is needed.
Who directs the work of the Indian team?
The Korean company. The provider handles contracts, payroll, compliance and HR records.
Can employees move to the company’s own entity later?
Yes, if the contract allows it. The transfer should be planned with the provider before the entity is registered.