Business News | India Emerges as Top Destination for Global Talent Operations as Budget 2026 Reforms Accelerate Foreign Company Entry

VMPL

Bengaluru (Karnataka) [India], February 21: Chartered Accountant Jai Kumar Shah on why more companies are choosing India -- and how the new tax and labour reforms are changing the game. India's Union Budget 2026-27 has introduced the most significant tax overhaul in 64 years -- and for foreign companies already eyeing India as a talent hub, the timing couldn't be better. With a completely rewritten Income Tax Act, consolidated labour codes, and data center infrastructure incentives, both paths to India -- quick-start hiring and full entity setup -- have never been smoother.

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"This is the most significant overhaul of India's tax and employment framework in decades," says CA Jai Kumar Shah, a Bengaluru-based Chartered Accountant who has advised over 100 foreign companies on India entry. "The new Income Tax Act simplifies 144 provisions, the four Labour Codes replace a maze of 129+ laws, and the MCA's digital-first approach has cut incorporation timelines significantly. Whether a company wants to start with an EOR model or go straight to a subsidiary, both paths are now faster, clearer, and more cost-effective than ever before."

What's driving the surge?

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India's combination of cost-effective skilled talent, favorable time zone overlap with Europe and the Middle East, and recent regulatory simplifications have made it a primary destination for Global Capability Centers (GCCs) and distributed engineering teams. The extension of the 15% corporate tax rate for new manufacturing companies through March 2029 makes India's effective rate among the lowest in Asia.

The data center market alone, projected to reach $10 billion by 2027, is seeing massive foreign investment after receiving infrastructure status -- giving operators access to long-term financing at competitive rates.

Yet India's compliance landscape -- spanning GST, TDS, PF, ESI, professional tax, and state-specific regulations -- remains complex enough that companies without local expertise face significant penalties.

"A US-based SaaS company recently came to us after receiving a ₹12 lakh penalty for PF non-compliance -- and they had only 8 employees in India," Shah notes. "The Labour Code reforms help -- standardized wage structures across states, simplified social security compliance, legally recognized fixed-term contracts -- but you still need someone who knows the system."

A dual-track approach to India entry

Budget 2026 and the labour code reforms have made both paths to India easier -- and smart companies are using them in combination.

- Employer of Record (EOR) / PEO -- Start fast: Hire employees immediately through a local legal employer. No entity required. Companies can have employees on the ground in 7-10 days with full payroll, tax, and labour law compliance handled from day one. Best for teams under 20, market testing, or getting started while incorporation runs in parallel.

- Subsidiary (Private Limited Company) -- Build permanent: Full legal entity with complete control. Required for large-scale operations, government contracts, or raising local funding. The new 15% corporate tax rate, simplified Income Tax Act, and digital MCA filings have cut setup timelines and made post-incorporation compliance far more predictable.

"What we're seeing is a 'start fast, build permanent' approach," says Shah. "Companies begin with EOR to get boots on the ground immediately, then transition to their own entity within 3-6 months once they've validated their India strategy. It used to be either-or. Now the smartest companies do both -- sequentially."

This phased approach is particularly popular with technology companies, GCC operators, and data center firms, where speed-to-hire directly impacts project timelines and revenue.

Two specialized platforms

Shah's practice operates through two platforms designed for each stage of this journey:

- SetMyCompany (setmycompany.com) handles company incorporation, entity setup, and ongoing compliance -- helping businesses navigate the new Income Tax Act provisions, GST, and regulatory filings.

- PEO Services India (peoservices-india.com) is dedicated to EOR and PEO solutions -- enabling companies to hire and manage Indian employees without a local entity, with full compliance under the consolidated Labour Codes.

"We separated the platforms deliberately," Shah explains. "A founder researching EOR options has very different needs from a CFO setting up a subsidiary. Keeping them distinct lets us go deeper on each."

Together, the two platforms have supported businesses from over 15 countries across technology, manufacturing, and services sectors.

Media Contact:

CA Jai Kumar Shah

Founder, SetMyCompany & PEO Services India

Email: jai@setmycompany.com

Websites: www.setmycompany.com | www.peoservices-india.com

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