Use of business visas in India and their limitations vis-à-vis employment visas

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Poorvi Chothani
LawQuest. Mumbai
poorvi@lawquestinternational.com

Ashwina Pinto
LawQuest, Mumbai
ashwina@lawquestinternational.com

 

Introduction

Indian business visas (whether consular-processed or electronic) are usually granted to individuals who wish to establish, or explore the possibility of establishing, an industrial or business venture in India, or wish to purchase or sell industrial products in India. It is not granted to an individual who wishes to come to India in connection with money-lending or petty trading, or to undertake full-time employment in India.

The basic difference between a business visa and an employment visa is that a foreign national cannot be working for and receiving an income with an Indian entity, as is the case with an employment visa where the individual is considered to be an employee of the Indian entity.

If a business trip, however brief, will involve activities other than those indicated below, an employment visa will typically be required. Additionally, there may be differences between activities permitted by law and those allowed in practice at the discretion of visa officers.

Set out below is representative list of situations in which applicants may be granted a business visa (consular-processed and electronic). They are for foreign nationals:

  • who wish to visit India to establish an industrial/business venture or to explore the setting up of an industrial/business venture in India;
  • coming to India to purchase/sell industrial products, commercial products or consumer durables;
  • coming to India for technical meetings/discussions, attending board meetings or general meetings for providing business services support;
  • coming to India for recruitment of manpower;
  • who are partners in the business and/or functioning as directors of the company;
  • coming to India for consultations regarding exhibitions or for participation in exhibitions, trade fairs, business fairs and so on;
  • who are buyers, who come to transact business with suppliers/potential suppliers at locations in India, to evaluate or monitor quality, give specifications, place orders, negotiate further supplies and so on, relating to goods or services procured from India;
  • who are experts/specialists on a short visit in connection with an ongoing project with the objective of monitoring the progress of the work, conducting meetings with Indian customers and/or to provide technical guidance;
  • coming to India for pre-sale or post-sale activity not amounting to actual execution of any contract or project;
  • who are trainees of multinational companies/corporate houses coming for in-house training in the regional hubs of the concerned company located in India;
  • coming as tour conductors and travel agents and/or conducting business tours of foreigners or business relating to it;
  • who are academics/experts coming under the Global Initiative for Academic Networks;
  • who are crew members of scheduled/non-scheduled flights operated by scheduled airlines, non-scheduled and chartered flights operated by non-scheduled airlines and special flights;
  • intending to visit India to participate in cultural events/activities with remuneration; and
  • who are engaged in commercial sports events in India, such as the Indian Premier League and Indian Super League, on contract with remuneration (including coaches). Such individuals may be granted a B-sports Visa with a multiple entry facility for the appropriate period and shall comply with all statutory obligations, such as payment of taxes.

Important notes

In certain circumstances, despite the fact that the foreign national’s activities are limited to those listed above, an employment visa may be required if the foreign national will generate profit for the host entity, receive compensation from the host entity and/or take direction from the host entity.

Further, audit-related activities (both internal and external) are not permitted on a business visa. An Indian visa is determined on the activities to be performed and not on the duration of stay in India.

Since Indian business visas are relatively easy to obtain, many Indian businesses use them for foreign nationals to conduct training activities in India. Imparting training is productive work and requires an employment visa – even if the training is for only one day. However, if the foreign national is set to receive training in India and not conduct the training, they may do so on a business visa in certain circumstances.

Often, companies use business visas for many activities that do not fall within the permitted activities. Since enforcement in India is not yet that strong, they ‘fly under the radar’. As in the United States, a company could face problems if there is a large-scale misuse of these visas. It is generally the employee, however, who is subject to penalties for misuse if they are caught. There also have been cases where foreign national applicants have remained in India for too long under the visa, or worked under the wrong visa, and have been denied entry on a business visa – even where appropriate.

Visas for members of the board of directors

Generally speaking, foreign nationals who are directors in companies may visit India on a business visa to attend general and board meetings.

However, it is important to note that, in India, an executive director can either be a full-time director of the company (one who devotes the entirety of their working hours to the company) or a managing director (one who is employed by the company as such and has substantial powers of management over the affairs of the company subject to the superintendence, direction and control of the board).

Therefore, it is best for foreign nationals who are set to act as executive directors in an Indian company to procure an Indian employment visa. In contrast, a non-executive director who is neither a full-time director nor a managing director may visit India on a business visa to attend board meetings.

Visa duration

First-time consular-processed business visa applicants are usually granted a six-month or one-year consular processed business visa.

Business visas are specifically endorsed with the length of stay on each visit and the need to register with the Foreigners Regional Registration Office or Foreigners Registration Office (if necessary). Subsequent consular-processed business visa applications with a good travel record could get visas for a validity period of five years. US nationals may be issued business visas with a validity of ten years. Extensions on business visas are only granted in very limited circumstances, as described in the section on business visas for investors. On the other hand, employment visas are historically granted for a period of one year, even if the duration of employment is longer than a year.

Employment visas may be extended in India for an additional 12-month period every year, enabling the individual to remain in India on the employment visa for up to a total of five years from the date of initial issue of the visa.

The validity of an electronic business visa is 365 days from the date of grant of the electronic travel authorisation (eTA). The eTA is specifically endorsed with the length of stay on each visit. This type of visa may not be extended and is not valid to visit protected, restricted and cantonment areas as designated by the Ministry of Home Affairs.

Business visas for investors

This option is very rarely used, but foreign nationals are permitted to stay in India for the long term provided they meet certain investment criteria. In order to conduct business in India, foreign nationals are permitted to make investments on a business visa. Foreign nationals are permitted to invest in up to 100 per cent of the equity of an Indian business subject to a few limitations and prohibitions.

Foreign nationals who meet certain investment criteria could reside in India for extended periods of time if their investments result in gross sales or turnover of approximately US$133,000 per annum. This threshold must be reached within two years of setting up the business.

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