FW speaks with Divya Baweja, a spokesperson for Deloitte Touche Tohmatsu India Pvt Ltd, about corporate immigration in India.
FW: Could you briefly outline the current legal and regulatory landscape for corporate immigration in India? What trends and developments have you seen in recent years?
Baweja: In India, immigration provisions are administered by the Ministry of Home Affairs (MHA). India does not have a work permit as such – rather, foreign nationals coming to India will have to obtain an employment visa, or ‘e-visa’, or a business visa, or ‘b-visa’, depending on the purpose of their visit to India. Further, foreign nationals and their dependents may have to register themselves with the local Foreigners Regional Registration Office (FRRO) or Foreigners Registration Office (FRO) in circumstances stipulated in the visa. Over the last few years, there have been significant changes to Indian immigration regulations. India has also now prescribed a minimum salary of $25,000 per annum for foreign nationals visiting India for employment purposes. Further nationals from prior reference countries (PRCs) such as China Pakistan etc require prior approval of the MHA before obtaining an e-visa. Most of the processes associated with extending a visa, registering with the FRO and so on, have been streamlined. Foreign nationals make appointments online, upload documents and be present at the relevant FRRO/FRO on the appointed date. The MHA has also issued guidelines on the uniformity of support documents and making the jurisdictional FRRO/FRO the single point of contact by delegating more powers to FRRO/FROs. This means that the final decisions on the above processes can be made at the FRRO/FRO level itself.
FW: Specifically, could you outline the changes in relation to labour market-testing attestations and extending employment visas?
Baweja: Before hiring a foreign national under an e-visa, an Indian employer has to carry out Labour Market Testing (LMT). The LMT is an assessment which must be carried out to ascertain the availability of Indian workers with the necessary academic and professional qualifications to fill a proposed position. Evidence of having performed an LMT – such as a copy of the advertisement or declaration – is required at the time of submitting the initial e-visa application at an Indian embassy overseas. In normal practice, an LMT is not required when extending an e-visa.
“Most of the processes associated with extending a visa, registering with the FRO and so on, have been streamlined.”
FW: To what extent do immigration policies in India impact the ability of firms to hire, retain and transfer staff?
Baweja: Immigration policies have been relaxed over a period of time, making it relatively simple to hire, retain and transfer staff. There is no concept of a work permit in India, and foreign nationals only need to enter on an e-visa to take up employment. Foreign nationals coming to India on an e-visa or b-visa usually have to go through a single stage application process, except for nationals from specified PRCs. Visa processing timelines are relatively short at Indian embassies abroad compared to other countries, which helps to mobilise resources on short notice. Recently, as a step toward further liberalisation, visa extensions, visa conversions, visa changes arising from a change of employment, among others, can be carried out within India instead of visiting the home country.
FW: What is the process for third-party contractors obtaining work permission in India?
Baweja: Self-employed foreign nationals coming to India to provide engineering, medical, accounting, legal or other highly skilled services in their capacity as independent consultants, can apply for an employment visa with the supporting documents issued by a sponsoring company. For this purpose, they must apply at the Indian embassy in their home country. Furthermore, in the event that their e-visa is valid for more than 180 days, they must register themselves with an FRO or FRRO within 14 days of their arrival in India.
FW: Would you say that corporate immigration policies in India are relatively open or closed to foreign nationals? What are the underlying reasons behind this?
Baweja: Corporate immigration policies in India are relatively open and encourage foreign nationals to enter the country. With the opening up of the economy in the early 1990s, India witnessed a spurt of foreign direct investment (FDI). Over the past few years, Indian immigration processes have been liberalised to facilitate the entry of foreign nationals. Today, foreign nationals coming to India for employment purposes only require a valid e-visa. Generally, e-visas are approved and issued by the visa officer at the Indian embassy or High Commission level. No further approvals are required, except in cases where foreign nationals are from specified PRCs. Furthermore, India currently does not have any limits on the number of foreign nationals that may be employed in the country under the e-visa system. There were restrictions in place between 2009 and 2010, when the numbers of foreign nationals was restricted to 20-40 for the steel and power industries. However, these restrictions were effectively removed by Home Ministry guidelines issued in October 2010. As previously noted, under the new guidelines, foreign nationals are no longer required to return to their home country following a change in employment within a group company, as this can now be done in India with prior approval from the MHA. Recently, the MHA issued clarifications whereby Person of Indian Origin (PIO) cards will have lifelong validity and are exempt from requirements to register with the FRRO or FRO. Furthermore, for Japanese nationals, the FRRO or FRO registration processes have also been simplified. Further, there are proposals in place to extend ‘on arrival’ tourist visas to a number of countries. Over the years, India has simplified its immigration procedures to facilitate access to foreign technicians and experts that will enable the national economy to be more competitive globally.
“Over the past few years, Indian immigration processes have been liberalised to facilitate the entry of foreign nationals.”
FW: What penalties can firms expect to face if they are found to be in breach of India’s corporate immigration laws?
Baweja: Foreign nationals who contravene immigration regulations may be subjected to fines or deportation. In extreme cases, where there are gross violations, they may be subject to imprisonment. However, representation is available to all foreign nationals before any action is taken.
FW: What considerations should companies make when designing programs and procedures to control and monitor their immigration strategy?
Baweja: When framing their immigration strategy for India, companies need to assess the skill requirements and the limits placed upon them by regulators, where applicable. The focus should be on sending skilled manpower to India to impart training, on the job experience, general management, and so on. Care should also be taken to assess the impact on tax and social security. To that end, we see a lot of information being exchanged between various government quarters, especially between immigration and social security. The stand taken at the time of immigration could have a bearing on the individual and the corporate tax position of the employer. It could also have a bearing on the social security registration of the employer. These regulations have significant implications for employee mobility programs. Further, the immigration strategy and process should have sufficient flexibility to adapt to dynamic Indian immigration requirements.
FW: How, if at all, is new technology assisting Indian companies with their immigration needs?
Baweja: All the Indian embassies, immigration check posts (ICPs) and FRRO and FRO offices are now computerised and networked to offer a secure and integrated delivery framework to facilitate the visa process. This has helped to reduce processing time for e-visas. Most of the process associated with extending visas, registering with the FRO, and so on, have been computerised. Foreign nationals can make appointments online, upload documents and be present at the relevant FRO or FRRO on the appointed date.
“Seeking local advice will allow corporates to assess and evaluate the impact that changes to Indian visa regulations will have on their business.”
FW: In what ways might the recent change of government in India affect corporate immigration?
Baweja: Over the years, we have seen local visa regulations become more streamlined and focused on specific sectors, as well as the country’s overall requirements. The new government has further liberalised immigration norms. Accordingly, the validity of residence permits issued to Japanese nationals holding e-visas and dependent x-visas will now be co-terminus with the validity of the visa tenure. Furthermore, Japanese nationals are no longer required to renew their residence permits on an annual basis. For the purpose of registration, visa extensions, change of address and other prescribed circumstances with the FRO, the physical presence of the Japanese national is no longer mandatory. Similarly, the PIO cards are now valid indefinitely from the date of issue. Prior to this change, they were only valid for 15 years. Also, PIO cardholders are exempt from registering with the FRRO or FRO. US nationals who are chief executives or senior executives of a US company are now eligible for an employment visa for a period of three years or co-terminus with their contract, whichever is shorter.
FW: How important is it that foreign companies seek external, local advice on the regulatory framework for immigration, and their compliance obligations, when operating in India?
Baweja: Although immigration procedures in India are not overly complex, it would be advisable for foreign companies to seek professional help when attempting to comply with the regulatory framework. By doing so, foreign workers will be able to enter the country on a valid visa and comply with the stipulations under visa regulations. Furthermore, seeking local advice will allow corporates to assess and evaluate the impact that changes to Indian visa regulations will have on their business. Change of visa is generally not permitted within India, so if an individual arrives in India on the wrong visa, generally they would be required to go back to their home country to be issued with a new, correct visa. By seeking professional help, companies can maintain uniform positions with regard to tax, social security and immigration, and also mitigate the risk of non-compliance.
Divya Baweja is a spokesperson for Deloitte Touche Tohmatsu India Pvt Ltd. He is a Chartered Accountant with over two decades of experience in advising multinational companies on various issues pertaining to corporate tax, personal tax, international tax, immigration, regulatory issues and structuring operations. He has extensive experience dealing with regulatory authorities on matters relating to immigration and social security. He specialises in creating systems and procedures that facilitate a seamless cross-border immigration operation. Mr Baweja holds a Bachelor of Commerce degree. He can be contacted on +91 124 679 2891 or by email: dbaweja@deloitte.com.
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