- Model Standing Orders, 2026 for the services sector allow work from home by mutual agreement between employer and employee.
- Salary for services rendered in India is taxable in India, so the employer must deduct TDS monthly under s.392 of the Income-tax Act, 2025.
- Employer PF is 12% of wages, capped at ₹3,000 a month on the ₹25,000 ceiling since 17 September 2026.
- A remote employee who habitually signs contracts for you can create a permanent establishment for your company.
On this page
Can a foreign company hire a remote team in India without an entity?
Yes, but only through someone else’s Indian entity. You cannot run Indian payroll from abroad without one.
You have three routes:
| Route | Who employs | Best for |
|---|---|---|
| Employer of record | The EOR’s Indian entity | 1 to 50 hires, fast start, no entity |
| Contractors | Nobody, it is a services contract | Genuinely independent, short projects |
| Your own subsidiary | You | Long-term teams of scale |
Contractors look cheapest. But a full-time contractor who takes your orders, keeps your hours and uses your tools looks like an employee to an Indian court. Our page on entity-free hiring compares the routes in more detail.
What does Indian law say about working from home?
It is allowed, and since 2026 it has a written basis. The PIB backgrounder on the Industrial Relations Code confirms the services Model Standing Orders permit work from home by agreement.
So put it in writing. A clear work from home policy should cover hours, equipment, data security, expense reimbursement and how often staff come in, if ever. Our remote work strategy guide has a checklist.
Working hours rules still apply at home: 8 hours a day and 48 a week under the OSH Code, with overtime at twice the wage rate. A laptop on the kitchen table does not switch them off.
What is the biggest mistake with a remote team in India?
Letting a senior remote hire sell for you. Suppose your Bengaluru sales lead negotiates and signs deals with Indian customers in your parent’s name.
Tax officers can then treat your parent as having a permanent establishment in India. Profits linked to those deals become taxable here, at 35% plus surcharge and cess for a foreign company. Keep contract signing with the parent. Indian staff can prepare the deal. They should not close it.
How does Remunance employ your remote team in India?
Remunance becomes the legal employer of your remote team in India. You manage the work. We issue Labour Code compliant contracts, run payroll and statutory filings, and ship and recover laptops through our IT provisioning service. We have hired 1,200+ Indian employees for clients across 34 Indian cities, so your people can sit wherever the talent is. Our guide to building a remote team in India shows the first 90 days. When you have roles in mind, ask us to cost your first remote hires.
What else do people ask about remote teams in India?
Do remote employees in India get PF and gratuity?
Yes. Remote staff are employees like any other. EPF, gratuity, leave and bonus rules all apply.
Do remote employees in India need an appointment letter?
Yes. The OSH Code requires a letter of appointment for every employee, wherever they work.
Is it legal to hire remote workers in India as contractors?
Yes, if they are truly independent. If they work like employees, misclassification exposes you to back PF, tax and penalties.
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.