Corporate immigration in India – Laws & Regulations

Last Updated at: Oct 23, 2019
Corporate immigration in India – Laws & Regulations

India being the corporate magnet of the world, large MNCs rush into the country to invest in the corporate field. The highest availability of skilled professionals at a very flexible and low rate is the main reason for the increased flooding of foreign companies entering India. Corporate immigration is basically the process of expansion of a foreign company either wholly or partly within India(host country). Immigration in general means the movement of people from one country to another for the purpose of settlements. Similarly, even corporate companies encroach into another country to settle down and gain a stronghold in the host nation. They use the existing resources and gain profits out of it, more like the relationship between a colonizer and a colony.

In order to expand the company’s workforce and maintain their value chain, they send in their topmost officials into the new company to stabilize the new emerging company according to the current business environment. For doing so, every company needs to follow the host country’s immigration laws properly in order to avoid any legal mishaps in the future. The local district magistrate or the Senior Superintendent of Police usually play the role of the registration officer as per the 1939 Rules.

Immigration Procedures and Compliances:

The basic duty as an immigrant is to apply for a suitable type of visa (chosen according to the purpose and duration of visit) and to get themselves registered with the FRRO( Foreigners Regional Registration Office). During registration, the foreign nationals are required to sign the report of registration and also submit the prescribed documents to the officer. The compliances to be reported and the powers of the FRRO only begins as soon as the visitor enters India. The state has the ultimate power to select or reject any business or foreign employee visa and not Judicial review petition is sustainable against visa rejection. The Foreigners Order of 1948, section 10 describes the restrictions on the employment of foreign nationals within India.

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Legal provisions and policies:

The Foreigners Act, 1946; Usually called the 1946 Act, it provides the rules and regulations for registration of foreigners and the fundamental legislation covering all aspects of foreigners in India. The movement of the foreign nationals within and out of the country and their departure, etc. are all strictly formalised under this Act. The 1946 Act was preceded by the  Registration of Foreigners Rules 1939 (the 1939 Rules) which gave the detailed description for registration of foreigners who visit India in section 6 of the act, such as:

  • The visitors must submit their registration report as specified by the registration officer at the place of arrival if they tend to stay in India for more than 180 days.(section 6(1)(b))
  • The report must be submitted within 14 days of arrival, except for Pakistani nationals who have to submit the report within 24 hours of arrival. (section 6(2)(b))
  • The visitors are obligated to surrender any information relevant to prove the authenticity of documents provided and will receive a certificate of registration once they have signed the report. (section 6(3))
  • Rule 15 of the 1939 rules specify that the personnel ought to submit their certificate of registration prior to their departure.

The 1946 act, however, provided the state the ultimate power to expel any foreign national from India, it may seem fit. The absolute power of deporting any foreigner who at any cost has broken the business is vested upon the state and the constitution also does not have a say in it.

Issues with large scale immigration of foreign personnel:

Immigration does not just end with applying for a visa or registering with the FRRO, their relocation into a country other than their own involves many other legal issues to be addressed. Once they move into India, there arises a question of nationality as India prohibits dual nationality. Since the personnel earn money in India, they are also liable to pay taxes and the amount of taxes levied is once again a controversy.  In case the foreign nationals are to break any business codes and would have to be penalized, there need to be specific provisions devoted for this purpose as they cannot be randomly victimized to any law that does not govern them. The newly delineated Persons-of-Indian-Origin (PIO) and Overseas Indian Citizens (OIC) are fractions of people who are eligible for the benefits provided by the state. If they are to work in India, they can avail these benefits with careful considerations by the State.