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Foreign company

30 May 2016

Foreign Company want to open a company private limited in india for hiring employees and get them to do coding work online , no sale or purchase , and foreign company send salary and payment for other expenses. is it possible , if yes what is the revenue for indian company , when indian company work for foreign company, other option avaliable in such case, or it is right one.

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CA Rohit Jain (Practice) (1865 Points)
Replied 31 May 2016

yes, it is possible for a foreign citizen to start a company in India. As you metioned in your query that foreign company will only send salary directly to the employees of the indian company, then what will be revenue for the indian company. Foreign company can't pay salary directly to the employees of indian company. So foreign company should pay consultancy charges to indian company and indian company in turn will pay the same to its employees. Consultancy charges received from foreign company will be revenue of indian company. However a thorough advise from a direct and indirect tax consultants is recommended in this regard. FEMA regulations should also be taken care off.

I hope this will suffice.