Service · Contractor conversion
Clean up your India contractors before your next raise.
If you already pay engineers in India as contractors, we convert them to fully compliant employees in about two weeks — no Indian entity required. Done before diligence asks the question.
Why this matters now
Indian classification doesn't turn on the contract label — it turns on the substance of the relationship. A full-time, exclusive, embedded engineer is an employee in substance regardless of what the agreement says. That gap is invisible right up until someone has a reason to look.
- Investor & acquirer diligence.Misclassified contractors doing core engineering are a standard red flag in funding and M&A diligence — they surface as unquantified back-pay exposure and unclear IP ownership, exactly when you have the least leverage to fix them quickly.
- IP ownership.Under India's Copyright Act, contractor work does not automatically vest in the company without a valid written assignment. Employment plus a proper assignment closes the gap.
- Substance-over-form reassessment. A full-time, exclusive, embedded engineer can later be recharacterized as an employee — bringing backdated PF, ESI, and gratuity, plus TDS recharacterization.
We're not going to tell you the tax authorities are about to knock — there's no public record of a no-entity foreign company being penalized for this. The real trigger is diligence. Fix it before then and it's a footnote; fix it after and it's a negotiation.
How it works
How conversion works.
- Step 01Day 0–2
Review
We review each contractor engagement — scope, exclusivity, tenure, and any existing IP assignment — and flag which ones genuinely should convert.
- Step 02Day 2–5
Offer & contract
Compliant offer and employment contract, with CTC structured under the 50% rule (basic + DA ≥ 50% of CTC), PF/ESI/TDS, and IP assigned to you from day one.
- Step 03Day 5–10
Onboarding
EOR onboarding: 5–10 business days. KYC and statutory registrations completed; the engineer moves onto compliant payroll.
- Step 04Ongoing
Run
Monthly payroll, statutory filings, and payslips — run end to end by TWF Labs under the EOR arrangement.
What it costs
$129/engineer/month, all-in, on top of salary and statutory employer costs. No setup fee, no per-conversion fee.
Be ready for the real number: converting typically raises gross cost by 15–45% once employer PF, gratuity, and benefits are added. That increase isn't a TWF fee — it's the cost of the work actually belonging to you, properly and defensibly.
Prices are in USD. Services to overseas clients are generally treated as zero-rated exports under Indian GST, so no GST is added where the export conditions are met. Any taxes that do apply will be shown on the invoice as required by law. We'll confirm the treatment for your engagement in writing.
When you should NOT convert
Conversion isn't for everyone. A genuine contractor — multiple clients, milestone or output billing, their own tools, real control over how the work is done — should stay a contractor. Converting them would be the wrong call. This is for the full-time, exclusive, embedded engineer who looks like an employee in everything but the paperwork.
FAQ
Common questions, direct answers.
Do we need an Indian entity?
No. Your engineer is employed in India on a compliant local employment contract under the EOR arrangement we set up and run — you incorporate nothing. TWF Labs handles sourcing, setup, payroll, and compliance.
How long does conversion take?
About two weeks end to end. Once the offer and employment contract are signed, EOR onboarding takes 5–10 business days.
Will the engineer's take-home drop?
It can shift when a contractor invoice is restructured into a compliant CTC (basic + DA ≥ 50% of CTC, PF, ESI, TDS). We model the net impact for you and the engineer up front, so there are no surprises.
Who is the legal employer?
Your engineer is employed in India on a compliant local employment contract under the EOR arrangement we set up and run. You direct the work; we handle employment, payroll, and compliance.
What about IP already created as a contractor?
We flag the gap, put a proper go-forward IP assignment in place as part of employment, and coordinate remediation of previously created work with your counsel.
Convert your India contractors before diligence does it for you.
A free 20-minute review. We'll tell you which engagements should convert — and which shouldn't.