- Your subsidiary must report its foreign share capital to the RBI in Form FC-GPR within 30 days of allotting shares.
- Late FC-GPR filing costs ₹7,500 plus 0.025% of the amount for each year of delay.
- PF moves under the employee’s existing UAN, so no balance is lost.
- Whether past EOR service counts for gratuity is a contract choice you make, not an automatic rule.
On this page
In what order does an EOR exit happen?
Entity first, people last. A transfer that starts before your entity holds its PF and ESIC codes leaves staff with no lawful employer on payday.
- Incorporate the wholly owned subsidiary.
- Fund it and file FC-GPR.
- Register for EPF, ESIC and Professional Tax.
- Agree a transfer date with the EOR.
- Issue new appointment letters.
SPICe+ on the MCA portal issues the company’s PAN and TAN with incorporation, and the state Shops and Establishments registration follows once you have an office address. Put continuity terms for leave and gratuity in the new letter itself.
The RBI Master Direction on foreign investment sets the FC-GPR rules. Our page on India subsidiary formation covers incorporation.
What happens to gratuity and leave on transfer?
You decide, and you should decide early. Two models are common.
| Choice | What it means | Cost to you |
|---|---|---|
| Recognise past service | The gratuity clock continues from the EOR start date | You fund the accrued liability |
| Fresh start | EOR settles leave, gratuity clock restarts | Lower now, but staff may resent it |
Suppose an engineer has 4 years on EOR payroll at ₹60,000 a month in wages. Under recognition, your entity carries about ₹1,38,462 of accrued gratuity from day one. She reaches the five-year mark in 12 months.
Under a fresh start, she needs five more years, and her leave balance is cashed out by the EOR. Expect that conversation to be hard, and expect your best people to compare offers while you have it.
When does an EOR to entity transfer make sense?
When the numbers and the plans both say so. No headcount rule decides it.
Our analysis of when an Indian entity becomes cheaper than EOR runs the break-even. If you plan a staged handover from day one, a build-operate-transfer contract may suit better than a plain EOR.
How does Remunance move your EOR team onto your entity?
Remunance forms the subsidiary, registers it, and then transfers your team from our EOR payroll onto it, with no gap in salary. We have done this in practice, as our subsidiary formation case study shows. If you want our compliance management to stay on after the move, we can keep filing for your entity. To plan your exit, talk to our entity transition team.
What else do people ask about moving from EOR to an entity?
Can EOR employees be transferred to a subsidiary?
Yes, with each employee’s consent. The EOR employment ends and your subsidiary issues a new appointment letter.
Do employees serve notice when moving from EOR to entity?
Usually not. The EOR and client agree a release date, so staff move without a gap or a notice period.
How long does an EOR exit take in India?
It depends on your entity, not the people. Incorporation, capital and registrations take most of the time. Staff move last, often in a single payroll cycle.
Planning a hire in India?
Our founding team has run payroll and hiring in India for 22+ years, first as Remunance Systems, which was later acquired by ADP.