How Do I Hire Staff in India?

November 14, 2012 Posted by India Briefing Reading Time: 3 minutes

Obtaining visas for foreigners and drawing up employment contracts under Indian labor laws

Nov. 14 – Whether your business uses foreign or domestic staff/workers when operating in India, there are a number of legal requirements to pay attention to, from visas for high-skilled workers to drawing up contracts for laborers.

In this article, we look at:

Visas for Foreigners
Contracts

Visas for Foreigners
All foreigners visiting India (excluding overseas citizens of India, persons holding a “Person of Indian Origin” card and Nepalese or Bhutanese nationals) need a visa.

India issues tourist visas, generally for 180 days with multiple entries. A tourist visa on arrival scheme has been set up by the Indian Immigration Department for up to 30 days for nationals of Cambodia, Finland, Indonesia, Japan, Laos, Luxembourg, Myanmar, New Zealand, Philippines, Singapore, and Vietnam. Applications must be made at the consular section at the nearest embassy or high commission. For UK nationals, India has outsourced its visa application services to VF Services and applications at the embassy in London are no longer accepted. In the United States, India’s visa application services are handled by Travisa Outsourcing.

For business activities, two other types of visas are important to note: business visa (for which the period of stay in India per visit is limited to six months) and employment visa. For the latter, there are additional requirements for employees of the IT and journalism sectors, and a less restrictive regime for the power and steel sectors.

For all foreigners intending to stay in India for longer than 180 days (on any type of long-term visa), there is a requirement to register with the local Foreigners’ Regional Registration Office. In most cases, this registration needs to be done within 14 days of arrival in India.

Contracts
Indian labor laws provide a minimum of guarantees and benefits to all employees and these laws supersede the provisions of labor contracts.

There are three types of contracts in India:

Permanent (direct) contract
Fixed contract
Temporary contract

Investors should pay special attention to the Industrial Disputes Act, which provides a large number of protections for employees; the Shops and Establishments Act, which governs the hours of work, payment of wages, leave, holidays, terms of service and other conditions; as well as the several wage and remuneration acts, which regulate the payment of wages, bonuses, and equalize pay for men and women.

Any termination policy should be checked against the current law prior to it is carried out. For example, companies that employ more than 100 workers need government permission to conduct layoffs.

Besides company rules and regulations, clauses related to the following points can be incorporated into contracts:

Non-disclosure
Employee poaching
Unfair competition
Trademarks, patents and trade secrets

This article was extracted from our complimentary new guide, titled “An Introduction to Doing Business in India.” In this guide, we introduce the basics of setting up and running a company in the country and some of the key issues investors should pay attention to. This issue is currently available as a complimentary download on the Asia Briefing Bookstore.

Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.

For further details or to contact the firm, please email india@dezshira.com, visit www.dezshira.com, or download the company brochure.

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