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Can Dutch Companies Build an Offshore Engineering Team in India?
- Saransh Garg
- 3 days ago
- 10 min read
Yes, Dutch companies can build an offshore engineering team in India, and hundreds already have. Most choose between a wholly owned subsidiary, an Employer of Record setup, or contract staffing, moving from decision to first hire within two to three months. The real question is not whether it is possible, but which structure fits your headcount, your legal risk appetite, and how fast you need engineers on the ground.
Bengaluru and Pune are the two cities Dutch tech and fintech companies turn to most, and cost is only part of the reason. India recently brought four new Labour Codes into force, replacing 29 older labour laws with one unified wage and social security framework, quietly rewriting how offshore cost models should be built.
The IST to CET overlap gives Dutch and Indian teams roughly four and a half hours of live working time daily, more than most European companies get with the US. Below is what actually works when you try to build offshore engineering team in India, what breaks, and what it genuinely costs.
Why Dutch Companies Cannot Hire Enough Engineers at Home
Dutch tech hiring is not slow because salaries are too high. It is slow because there are not enough engineers to hire at any price. Amsterdam and Eindhoven together account for most open backend, DevOps, and embedded software roles, and a company like ASML competes with every scale up in Veldhoven for the same shallow local pool.
We see this pattern constantly. A Series A or B Dutch company posts a senior backend role in Amsterdam and gets three qualified applicants in six weeks. The same role posted for an India based hire draws forty to sixty qualified applicants, simply because the pool is not capped by one city's residency requirements.
Salary inflation compounds the problem. Current benchmarks put Dutch software engineer total compensation between 73,000 and 87,000 euros a year, before adding the mandatory 8 percent holiday allowance, pension contributions, and 25 to 30 days of statutory leave every Dutch hire is entitled to.
There is also a structural shift happening now. The Dutch tax authority's enforcement moratorium on the Wet DBA has ended, and both clients and self employed contractors must now prove their working relationship is genuinely independent. Companies that once plugged gaps with local freelancers are far more cautious today, which is one reason more of them are choosing to build offshore engineering team in India structures instead of ad hoc domestic contracting.
Add in the current wave of AI adoption inside product teams. Dutch scale ups now expect engineers who can work alongside AI coding assistants, ship faster with smaller teams, and still own architecture decisions. That combination is scarce and expensive at home, and it is exactly where a well screened India based hire closes the gap.
Which Indian Cities Have the Strongest Offshore Engineering Team for Dutch Companies
Bengaluru and Pune are not interchangeable, and treating them as one undifferentiated India pool is where many first offshore plans go wrong. Bengaluru has the deepest pool for cloud infrastructure, backend platform engineering, and product led SaaS talent, built on two decades of global capability centers from companies like Philips, SAP, and Goldman Sachs.
Pune leans toward embedded systems, automotive software, and enterprise data engineering, shaped by a manufacturing corridor that includes Bosch and Cummins. Clients building anything touching hardware or industrial software often find stronger candidate depth here than in Bengaluru.
Hyderabad is a strong third option for data engineering and applied AI roles, thanks to large local engineering centers run by Microsoft and Amazon that have trained a deep bench of mid level talent.
What Indian engineers from these cities consistently bring is strong computer science fundamentals, fluency in modern cloud stacks (AWS and Azure dominate over GCP in our candidate pool), and years of direct client communication with European and US stakeholders.
What they typically lack for a Dutch scale up is exposure to a genuinely product led, ambiguity heavy environment, versus the spec driven delivery model common at larger Indian IT services firms.
We test for this directly: every senior candidate we shortlist completes a paired problem scoping exercise, not just a coding test, because the gap usually shows up in how someone handles an underspecified ticket rather than in their ability to write code.
Is It Legal for Dutch Companies to Hire Engineers in India
An offshore engineering team in India is legally structured one of three ways: a wholly owned Indian subsidiary, an Employer of Record arrangement, or an independent contractor relationship, each with a different risk profile under Indian and Dutch law. The most common mistake we see is a Dutch founder defaulting to the third option, hiring individual Indian engineers as freelancers who report directly into a Dutch manager's daily standup, because it feels fast and low commitment.
This is really a contract hiring versus full time hiring decision, and the distinction matters legally, not just operationally. Contract hiring suits defined, time boxed projects with a clear end date. Full time hiring, delivered through an EOR or a subsidiary, is the right call for any role core to your product and expected to run indefinitely, because that is where misclassification risk lives.
In India, if a working relationship shows the hallmarks of employment such as fixed hours, exclusive engagement, and day to day supervision, it can be reclassified, exposing the company to back dated statutory dues under the Code on Wages, one of the four newly enforced Labour Codes. That code sets a uniform definition of wages that changes how provident fund and gratuity contributions are calculated, a detail most Dutch finance teams have not priced in yet.
On the Dutch side, the same direct freelance control pattern is exactly what tax authorities now pursue domestically under the Wet DBA. That law does not reach an India based worker, but the underlying legal reasoning travels: Dutch advisors increasingly apply the same control and supervision test to any offshore hiring model, pushing more companies toward EOR or subsidiary structures instead of direct contractors.
A wholly owned subsidiary avoids both problems but takes ten to fourteen weeks to incorporate and requires ongoing statutory compliance. An EOR gets a Dutch company operational in India within two to three weeks, with the EOR entity as legal Employer of Record (EOR) and day to day management retained by the Dutch team. For teams under fifteen engineers, EOR is almost always the right starting point.
EOR, Subsidiary, or Contract Staffing: Which Structure Fits Your Stage
Your situation | Recommended structure | Time to first hire | Who carries statutory compliance |
Testing India before committing (1 to 5 engineers) | EOR, full time hiring | 2 to 3 weeks | EOR entity |
Scaling a core team (5 to 15 engineers) | EOR, transition to subsidiary later | 2 to 3 weeks | EOR entity, then you |
Building a permanent capability center (15+ engineers) | Wholly owned subsidiary | 10 to 14 weeks | Your Indian entity |
Short term or defined project (under 6 months) | Contract staffing via agency | 3 to 5 weeks | Staffing agency |
Single specialist hire (avoid for ongoing roles) | Direct contractor | 1 to 2 weeks | Legally ambiguous, reclassification risk |
Use this table as a first filter, not a final answer. The variable that moves companies between rows fastest is not headcount alone, but whether the roles are core, permanent engineering, or a defined, time boxed engagement, which is the practical line between contract hiring and full time hiring most first time plans miss.
Dutch data protection obligations under GDPR do not disappear because engineers sit in India. Any subsidiary or EOR contract needs a data processing agreement covering cross border transfer, one of the clauses we most often see Dutch legal teams miss on their first pass at an India contract.
Our Process and a Real Proof Point
Our standard process runs four stages: role scoping and market rate benchmarking in week one, candidate sourcing and technical screening across weeks two to four, client interviews and offer by week six, and onboarding through the chosen structure by week eight. For senior and lead roles we add a paired scoping exercise on top of the technical round, because a clean coding test score does not predict how someone handles an ambiguous spec.
A mid sized Dutch logistics tech company, roughly ninety people, came to us needing four backend engineers in Pune for a routing optimization service, with a hard deadline tied to a customer contract renewal. Their first instinct was to hire two engineers directly as freelancers to move faster than an EOR setup would allow.
We flagged the reclassification risk given the intended full time, exclusive, supervised nature of the roles, and the client almost signed direct contractor agreements before their own counsel raised the same concern a week later. We restructured through an EOR instead, added one week to the timeline, and delivered all four hires in seven weeks against an original six week target.
The near miss cost them a week. A reclassification dispute surfacing well into a customer critical system would have cost far more in both money and continuity. That team has since grown to nine engineers under the same EOR, with a subsidiary conversion planned once headcount crosses fifteen.
How Much Does It Cost to Build an Offshore Engineering Team in India
Here is what the same seniority levels cost in the Netherlands versus an India based hire, before factoring in the twenty to forty percent capacity gap Dutch companies typically cannot fill locally at any price. AnjuSmriti Global has closed forty plus Netherlands to India mandates across these levels, and the numbers below reflect that internal data alongside published salary benchmarks.
Mid level backend engineer (three to five years): Dutch base salary averages around 69,600 euros a year, typically ranging between 52,300 and 87,750 euros. The equivalent India based hire through an EOR runs 22,000 to 30,000 euros fully loaded, covering salary, EOR fee, and statutory contributions.
Senior engineer (eight or more years): average Dutch gross salary sits around 84,951 euros, with senior engineers averaging 95,941 euros. An India based senior hire in Pune or Bengaluru runs 38,000 to 48,000 euros fully loaded, including the higher employer contributions the current Labour Codes require on a broader wage base.
Lead or staff engineer: Dutch national senior median base salary is around 97,066 euros, climbing well above 100,000 euros total compensation at scale ups and international firms in Amsterdam. An India based lead engineer typically runs 55,000 to 68,000 euros fully loaded, reflecting a smaller pool of engineers who have led teams at scale up level rather than only inside large IT services firms.
Companies we work with almost always reinvest the savings into one or two additional hires rather than banking the difference. The point of choosing to build offshore engineering team in India, for most Dutch clients, is capacity they cannot get in Amsterdam at any price, not just a lower invoice.
What Is Changing Right Now for Dutch Companies Hiring in India
State level rules under India's Labour Codes are still being notified market by market, and wage base and social security calculations are likely to shift again as that finalizes. Dutch companies running EOR or subsidiary structures in India should budget for a compliance review in the coming quarters.
We are also seeing more Dutch scale ups skip the single freelancer test phase entirely and go straight to a three to five engineer EOR pod, because the current Wet DBA enforcement climate at home has made the direct contractor shortcut feel riskier than it used to. On the technology side, AI assisted development, cloud native infrastructure, and platform engineering are reshaping what "senior engineer" even means, and Bengaluru and Pune candidate pools are adapting to that shift faster than most Dutch hiring managers expect.
Right now, in live mandates, Bengaluru and Pune candidate pools for senior backend and DevOps roles pull in three to four times the qualified applicant volume Dutch companies get posting the same role in Amsterdam. Companies choosing to build offshore engineering team in India this year are solving a capacity ceiling, not just a cost line.
If you are weighing this decision, the fastest way to get a clear answer specific to your stage and role mix is a direct conversation, not another generic comparison article: start here.
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FAQs
1.Does India's Code on Wages apply to engineers hired through an EOR for a Dutch company?
Yes. The Code on Wages sets a uniform wage definition that determines provident fund and gratuity contributions for every India based hire. EOR providers must apply it regardless of who the end client is, which has raised employer side contribution costs for many existing teams.
2.Can a Dutch company hire Indian engineers as direct freelancers instead of using an EOR?
Direct freelance hiring is legally possible but risky for ongoing, full time roles. If day to day supervision resembles employment, India can reclassify the relationship and assess back dated statutory dues. Most Dutch legal teams now recommend EOR or subsidiary structures for roles expected to run past six months.
3.How long does it take to set up a wholly owned Indian subsidiary versus using an EOR?
An EOR gets a Dutch company hiring in India within two to three weeks. A wholly owned subsidiary typically takes ten to fourteen weeks to incorporate and register for statutory compliance. Companies usually start with EOR and convert once the India team passes fifteen engineers.
4.What timezone overlap do Dutch and India based engineering teams actually get?
India runs four and a half hours ahead of the Netherlands in winter, narrowing to three and a half hours during Dutch summer time. A Dutch morning window overlaps directly with an Indian afternoon, giving roughly four to four and a half hours of daily live collaboration between teams.
5.Which Indian city has the strongest talent pool for backend and DevOps roles for Dutch companies?
Bengaluru has the deepest pool for backend, cloud infrastructure, and SaaS platform engineering, built on two decades of global capability centers from companies like Philips and SAP. Pune is stronger for embedded, automotive, and industrial software roles tied to its manufacturing corridor.
6.Does GDPR still apply if the engineering team is based in India?
Yes. Dutch companies remain the data controller regardless of where engineers physically sit, and any EOR or subsidiary contract needs a data processing agreement covering cross border transfer. This is one of the most commonly missed clauses in first draft India contracts.
7.Is contract hiring or full time hiring better for building an engineering team in India?
Contract hiring suits defined, time boxed projects with a clear end date. Full time hiring, through an EOR or subsidiary, suits core product roles expected to run indefinitely. Treating a permanent role as a contract hire is the most common cause of misclassification risk in India.
8.How much does it cost to hire a senior engineer in India versus the Netherlands?
A senior Dutch software engineer with eight or more years of experience earns an average gross salary of around 95,941 euros. The equivalent India based senior hire through an EOR runs 38,000 to 48,000 euros fully loaded, including statutory contributions under the current Labour Codes framework.
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