Indian Immigration Alert | Foreign Nationals Seeking Indian Employment Visas May Continue to be Paid Outside India

Indian Employment Visa, Indian Immigration

Foreign Nationals Seeking Indian Employment Visas May Continue to be Paid Outside India

This is an update to the alert we published on August 28, 2022, regarding salary payments for foreign nationals employed in India.

We have procured clarifications from the Indian Consular posts in the U.S. and the U.K, regarding changes to the source of salary for foreign nationals seeking new employment visas.  There were certain changes to the requirements published online by the VFS in these two countries, that implied that the salary must be paid in India.  It also appeared that the salary must be paid from an Indian source.

We have now confirmed that the salary may be paid outside India and from a non-Indian source.  However, it is imperative that the salary is equal to or higher than the minimum threshold of INR 16,25,000 (approx. USD 25,000) annually and that all taxes due on that salary are paid to the Indian Income Tax department.  These requirements should be documented in the visa package with appropriate paperwork.  Also, it is prudent to ensure that the salary is commensurate to the foreign national’s position since Indian employment visas may only be granted to highly skilled or qualified workers.

Recent employment visa applications filed at different locations in India have been approved even when the foreign national receives his/her salary outside India.  Hence, the FRROs/FROs also continue to accept that foreign nationals may be paid abroad as long as the foreign national and employer are compliant with the tax requirements in India.  Please note that some FRROs/FROs are very stringent about the level of proof they require to establish tax compliance.

Indian Immigration Alert | Foreign Nationals Seeking Indian Employment Visas Must be Paid in India | Changes Announced at Certain Posts

Indian Employment Visa, Indian Immigration, Newsletter

Foreign Nationals Seeking Indian Employment Visas Must be Paid in India | Changes Announced at Certain Posts

Foreign nationals seeking Indian employment visas must now be paid their salaries in India.  Changes to this effect were introduced in the document requirements by Indian Consular posts or their third-party document support entities (VFS and BLS) in the United States, Germany and Hong Kong (SAR).  Applicants in these jurisdictions are required to submit proof that they will receive their salary in India.  It is not clear that the sponsoring entity must pay the salary, or it would suffice if the salary was received in India.  We have also learned anecdotally that the FRRO in Chennai is asking for such proof for employment visa extensions.

Previously, foreign nationals could be paid either by the home or the sponsoring entity and proof that the foreign national would receive or has received (for extensions) an adequate salary that would be subject to Indian income tax was sufficient irrespective of where they received the salary or which entity paid the salary.  We now expect that the affected consular posts will not only review the minimum salary threshold (of INR 1,625,000 per year) but will also confirm that the salary will be paid by the sponsoring entity in India.

On seeking confirmation from certain Consular posts in the U.S. and the VFS we received no response or responses that neither confirmed nor clarified the position.  The Ministry of Home Affairs in New Delhi, that formulates visa policies, has not made any announcement to this effect as yet.

It appears that these changes were made in the second week of August, but there is no definitive date.  Also, it is important to that that in the meantime, employment visa applications filed during the past two weeks, at Indian consular posts in the U.S., have been approved even though the applicants will remain on the home country payroll.  We are monitoring the situation and will provide further updates as they become available.