Foreign company employing an indian consultant/consultants

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

13 October 2015 Hi
We need to understand:
if we hire some Indian nationals to do a process outsource for us. :

1) how can we pay salary to them. Can we direct transfer the monies to their account?
2) do we need a company account in India.?
3 do we need to have a subsidiary registered in India. If so please guide who to contact
4) we are happy for employee to be paid on training so in some cases they may be under the standard deduction at that time. What happens to TDS then
5 We will be not generating any profits in india so no income. Just paying employees. Do we need to do a tax return then?
6 as above we are not generating any profits there, are we liable for any sort of tax in india

Please advise if you can guide if we need to register as subsidiary or do not need to as no business is getting done in india but only paying salary to indian nationals who will do their own returns

Thanks

praveen

praveen (Expert)

13 October 2015 The intent of the transaction is required. If you want to have an employee - employer relationship with the Indian nationals it is always better to open a subsidiary or a liasion office in India. You can pay the amount to the liasion office and in turn such office can pay the employees here.

In case it is a one time job and you dont intend to have an employee - employer relationship then you can operate without an office in India.

For any queries contact me at mrpraveen@live.com

Querist : Anonymous

Querist : Anonymous (Querist)

13 October 2015 Hi Praveen

Thanks for replying

-it will not be a one time assignment but ongoing work
- can you suggest what is involved in opening a subsidiary and what do we need to comply with and our responsibilities for TAX as we wont generate or sell in india which means no profit? do we need to file return?

How to go about it

Thanks

praveen

praveen (Expert)

13 October 2015 In case you want to open an liaison office and RBI/Govt of India approval needs to be obtained.

Once obtained you can obtain a PAN based on that and open a Bank account as well.

You need to file a compliance report to the income tax department in form 49C

Compliance also needs to be filed with RBI

These forms and compliance will be certified by a Chartered Accountant.

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