It is essential for companies planning to run Payroll Services in India to have a clear plan and make the right moves from day one. During the 21st century, India’s economy has accelerated to make this vast nation a significant influence in the global marketplace and a leading attraction for international investment and expansion by foreign companies. In 2021 the Republic of India was among the world’s fastest-growing economies at 9.5%, while a nominal Gross Domestic Product (GDP) of 2,946 billion US dollars ranked sixth in the world and accounted for over 3.0% of the global economy.
These are among the attractions that draw international corporations towards India’s economy. Foreign companies hiring staff in India and intending to operate payroll for their team face a mass of complexities and not just at the federal level. The first step is to set up a legal entity in the country – potentially an exhausting and time-consuming operation – then comes a multi-layered registration process. Employers and employees each need tax and social insurance numbers. And that is just the start of the registration process. India’s 28 states can also apply their own rules.
Setting up a subsidiary in India to run payroll is one option, but this involves a protracted registration process and poses many challenges. Our Professional Employer Organisation (PEO) and Employer of Record (EOR) services provide complete solutions to every issue your company will face before your planned move into the Indian Market. Our teams step in from the start, locating top-rated talent in India, then guiding you through such procedures and navigating the administration of the Indian payroll system for you.
Remote payroll – This option allows businesses to operate under a single payroll system by adding employees in India to the parent company’s payroll. However, these employees must operate under different regulations, which is likely to cause problems.
Internal payroll – You may operate payroll for your subsidiary, especially if you are committed to growing your company’s presence in India. However, this does require hiring dedicated HR staff who understand India’s employment and compliance laws.
Indian payroll processing company – If you are considering outsourcing, then working with an Indian payroll company will help in processing your payroll – but not when it comes to compliance.
Indian payroll outsourcing – However, another option is available to solve both concerns – by working with Bradford Jacobs. We can handle payroll and compliance for all your employees in India. We lift the administrative stress from your shoulders so you can focus on what you do best.
Companies looking to open a door into India’s thriving economy will also be in a prime position for further expansion into South Asia, the Far East and Pacific Rim nations. These opportunities come hand-in-hand with challenges – and payroll management is among them. Whether your company is planning to move staff abroad or hire employees in the new territory, you cannot afford to tumble over barriers in India’s payroll and income tax landscape – it will cost you time and money.
Foreign companies can establish a legal entity in India to run payroll for their staff. The most popular and straightforward option is the private limited company for which the application and registration are made to the Registrar of Companies (ROC). Before running payroll in India, taking this step requires detailed practical knowledge of company, tax and employment law and staying up to date with taxation rates.
However, there is an alternative and more straightforward route. Bradford Jacobs’ will navigate around these potential pitfalls effectively and efficiently. We recruit the staff in-country and then implement our comprehensive knowledge of tax and payroll regulations. As part of our service, Bradford Jacobs files returns and remits associated payments for tax and social security contributions directly from our payroll system to the relevant authorities.
Using our Payroll Services in India will streamline your operations by dealing with the following to make your staff operational:
International companies expanding their operations into India must set up a legal entity to hire staff and operate their payroll. The most popular choice is to form a private limited liability company as a subsidiary, which operates under the Companies Act (2013). The Act covers recruitment, terms and conditions of employment, management and administration, share capital and securities, accounts, directors, shareholders and meetings.
Registration procedures required by the Ministry of Corporate Affairs (MCA) for a foreign company establishing a subsidiary include:
General requirements include:
For more information, download our free guide or get in touch with our consultants here