The Ministry of Home Affairs (MHA) that formulates visa related policies has been, since late 2009, fine-tuning India’s existing visa regime by issuing notifications and a series of guidelines published by way of frequently asked questions (FAQs) on its website.An employment visa is granted to foreign nationals desiring to come to India for the purpose of employment, subject to fulfilment...
The Ministry of Home Affairs (MHA) that formulates visa related policies has been, since late 2009, fine-tuning India’s existing visa regime by issuing notifications and a series of guidelines published by way of frequently asked questions (FAQs) on its website.
An employment visa is granted to foreign nationals desiring to come to India for the purpose of employment, subject to fulfilment of the following conditions:
- The foreign national must be “highly skilled” and/or “qualified” and should not be applying for any job which is routine, ordinary, secretarial or clerical in nature;
- Applicants should apply to the appropriate Indian Embassy, High Commission or Consulate (the Post) either in the country of their citizenship or in the country where they have resided for at least two years on a resident or appropriate long term visa;
- The employment visa application is required to be sponsored by a duly registered Indian entity. An application for this visa should be supported with documents, including but not limited to, an appointment letter, employment contract, applicant’s resume, proof of authenticity of the employing organisation in India and a letter from the employer justifying the necessity to employ the foreign national;
- The foreign national being sponsored for an employment visa in any sector should draw a minimum salary of US$ 25,000 per annum. However, this condition does not apply to: (a) ethnic cooks, (b) language teachers (other than English language teachers)/translators, (c) staff working for an Embassy/High Commission in India, and (d) foreign nationals seeking to work with registered charitable organisations, for which the salary ceiling is '10,000/- per month;
- The foreign national must comply with all legal requirements including the payment of tax liabilities and social security contributions.
The duration of an employment visa depends upon the period stipulated in the employment contract and the validity of the applicant’s passport. An employment visa may be extended on a yearly basis up to a maximum period of five years, by filing an application at the Foreigners’ Regional Registration Office (FRRO) or at the Foreigners’ Registration Office in India (FRO).
Registration of Foreign Nationals in India
Foreign nationals entering India on an employment visa which is valid for more than 180 days, are required to register within 14 days of arrival with the FRRO/FRO under whose jurisdiction they propose to stay.
Employment and Social Security Matters
Foreign nationals working in an organisation that employs 20 or more individuals are required to make social security contributions to a statutory provident fund under the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (the EPF Act). Employees are required to contribute 12% of their Basic Salary plus Dearness Allowance, which is the cash value of food concession and retaining allowance, matched by an equal contribution by the employer. The withdrawal of these contributions is subject to certain restrictions.
Foreign nationals working in India by way of direct employment or secondment are generally subject to Indian income tax, which is levied on the worldwide income of residents in India. It is very often observed that companies, both Indian and multinational ones, are willing to bear a significant financial burden when they want to engage high-end talent in India. Many of them even offer “tax equalisation” benefits to their employees, thus offsetting any difference in tax liability so that working abroad is tax neutral for the worker. Till the local talent pool is enhanced, companies will continue to engage foreign nationals despite the added expenses.
Enforcement
India’s hitherto tax enforcement of its laws related to foreign national’s entry and stay in India is slated to change. The MHA recently posted on its website a notification reminding Police Officers of their powers to take action against foreign nationals entering India illegally.
Police officers of Sub-Inspectors or higher ranks and officers of the Customs Department empowered by the Central Government may arrest, without a warrant, any person who is in India or seeks to enter India without appropriate documents and may be subject to imprisonment of up to three months and a fine or both under the Passport (Entry Into India) Act, 1920.
The notification further states that any foreign national who is in India beyond the validity of his/her visa or has entered into the country without a valid visa may be subject to imprisonment of up to five years and a fine under the Foreigners Act, 1946.
The notification also asks eligible officers to take “strict action” and ensure “strict compliance” with these provisions. There have been no recent, legislative changes but this notification seeks a strict enforcement of existing regulations.
Disclaimer – The contents of this publication are not a comprehensive consideration of the subjects discussed and are designed to provide preliminary, general information. Readers should not conclusively rely on the information as legal advice and should seek independent counsel before any action is taken with respect to these or other specific issues.