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India Reverses Payroll Localization Requirement for Employment Visa Holders


By the end of August, there were reports indicating that some Indian consulates and the local registration authorities in India started requiring foreign nationals seeking or holding Employment (E) visas to provide proof that their salaries were being paid or were paid in India. Most recently, it seems like the Indian government reversed this requirement. Although no formal announcement was made either as to the payroll localization requirement or the most recent reversal, the move is a welcome change for global employers, many of which choose to maintain foreign assignees on their home country’s payroll.

Background: E Visas and Payroll Localization

India’s Employment (E) visa is available to foreign nationals who are highly skilled or qualified professionals in a given sector and who meet a minimum salary threshold of INR 1,625,000. At present, applicants for new E visas may be paid either by their home employer or by their sponsoring entity in India. Applicants for E visa extensions may similarly remain on non-Indian payroll. All E visa holders must comply with local tax regulations.

In August 2022, the FRRO in Chennai some Indian consulates and the Indian government’s third-party visa services began implementing a localization requirement for both new applications and extensions, though no formal announcement was made by the Ministry of Home Affairs (MHA). Applicants in the relevant jurisdictions – including the United States, Germany, and Hong Kong – were being asked to demonstrate that they would receive their salary in India. These changes now appear to have been scrapped, at least for the time being, such that new E visa applicants as well as applicants for extensions can remain on their home employer’s payroll.

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