Sending a German employee to India triggers four separate questions: immigration (employment visa and registration), personal income tax (the 183-day test and who pays), social security (stay in the German system under the agreement or join the Indian provident fund) and corporate tax (whether the secondment creates a permanent establishment). Settle all four before the person travels. A German employee who works on the Indian company's payroll and under its control is normally an employee of the Indian entity for Indian tax.
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Key facts
| Visa | Employment visa with a minimum salary floor of USD 25,000 a year, for skilled roles, with exceptions |
|---|---|
| Registration | FRRO registration within 14 days of arrival for stays over 180 days |
| Income tax | Residence test and the treaty's 183-day rule for short stays; Indian salary tax is withheld under Section 392 |
| Social security | Social Security Agreement of 2008: certificate of coverage from the German side keeps the employee in German schemes for up to 48 months, with a 12-month extension |
| Contract | Secondment letter or local contract; who is the employer, who pays, who directs the work |
| PE risk | Dependent agents and long secondments can create a PE; see the DTAA guide |
| Exit | Return planning: German tax, social insurance and residence status |
Three ways to send staff
| Option | Employer in India | Pros | Cons |
|---|---|---|---|
| Business trip | None (stays German employee) | Simple for short visits | Visa category matters; the treaty 183-day test and PE watch |
| Secondment to the Indian subsidiary | Subsidiary directs the work; German parent may still pay salary and recharge | Keeps the German contract; transfers know-how | Salary may still be taxable in India; recharge and Withholding Tax issues |
| Local contract in India | Indian subsidiary employs the person | Clean for Indian tax and labour law | German employment and social insurance status must be handled on exit and return |
Visa and registration
- An employment visa generally requires a skilled role, a signed contract and a salary above a floor of USD 25,000 a year; the floor does not apply to every category.
- Register with the Foreigners Regional Registration Office within 14 days of arrival if the visa is for more than 180 days.
- Family members need dependent visas.
- Short business visits on a business visa are for meetings and talks, not for productive work in India. If your engineers will commission or maintain equipment on site, check the right visa category.
Income tax for the employee
- Under the treaty, salary of a German resident working in India for up to 183 days in the fiscal year is taxable only in Germany if the employer is not in India and does not bear the cost. A secondment to the Indian subsidiary, where the subsidiary bears the cost, usually fails that test.
- Where the person is employed by or seconded to the Indian company, the employer must deduct tax on salary under Section 392 of the Income-tax Act, 2025, and deposit it by the 7th of the following month.
- A person who stays long enough becomes resident in India and is taxed on world income, subject to the rules for residents who are not ordinarily resident. A tax adviser should model the case before travel.
- Germany taxes residents on world income; moving residence out of Germany and the German tax consequences should be reviewed with a German adviser.
- Tax equalisation or hypothetical tax policies need to be priced into the assignment budget.
Social security
India and Germany have a Social Security Agreement, in force since 1 October 2009. A detached employee who stays in the German system can obtain a certificate of coverage from the German implementing body (the DVKA), which the Indian employer gives to the EPFO to be exempted from provident fund contributions. Coverage is for up to 48 months, with a 12-month extension possible. See German employees and the Social Security Agreement for the full process.
Permanent establishment checks
- Staff who conclude contracts for the German company in India can create a dependent agent PE.
- A fixed place, such as an office or a site used by German staff, can create a fixed-place PE.
- The India-Germany treaty contains a construction and installation clause at six months. Check the current text for services clauses before assuming any exposure either way. See the India-Germany DTAA.
- Keep a record of the days, tasks and decision-makers for each seconded person.
Pre-departure checklist
- Decide the model and write the secondment or local contract.
- Apply for the visa category that matches the real work.
- Request the certificate of coverage from the German side before departure, if staying in the German system.
- Register with the tax and payroll systems and decide how salary and recharges flow.
- Brief the person on registration (FRRO), banking and tax filing.
- Plan the return: German registration, insurance and tax.
Official sources
Check the rules at the primary sources: Income Tax Department (India), Reserve Bank of India, Ministry of Corporate Affairs, Federal Central Tax Office (BZSt), Handelsregister and the Deutsche Bundesbank.
Frequently asked questions
What visa does a German employee need to work in India?
An employment visa for a skilled role with a contract and a salary floor of USD 25,000 a year, with exceptions. A business visa is for meetings, not for productive work.
Is FRRO registration needed?
Yes, within 14 days of arrival for stays of more than 180 days.
Is a German employee in India taxed in India?
Possibly. The treaty's 183-day rule can leave salary taxable only in Germany for short stays, but a secondment to the Indian subsidiary at its cost usually fails that test and the employer must withhold under Section 392.
Can a seconded German employee stay in the German social insurance system?
Yes, under the Social Security Agreement with a certificate of coverage, normally for up to 48 months plus a 12-month extension.
Does a secondment create a permanent establishment?
It can, for example if the person concludes contracts for the German company or works from a fixed place at its disposal. Review each assignment.
Is a local Indian contract better than a secondment?
It is cleaner for Indian tax and labour law but changes the person's German status, so plan the return as well.
Related guides
German Employees Working in India: What the Tax Treaty and the Social Security Agreement Mean
How income tax and social security apply to German staff in India: the 183-day treaty test, the 2009 social security agreement, the 48-month detachment rule, certificates of coverage and German tax residence.
Read the guide →The India-Germany Tax Treaty (DTAA), Article by Article: India as Source State, Germany as Residence State
The India-Germany double taxation agreement explained article by article from the German parent's point of view: the flat 10% rates table, permanent establishment, share gains, relief and how to claim.
Read the guide →Hiring in India as a German Employer: What Changes from German Practice
A comparison for German HR teams hiring in India: employment contracts, provident fund, ESI, gratuity, labour codes, notice and dismissal, no works council, payroll tax and share plans, set against German practice.
Read the guide →Common Mistakes German Companies Make in India and How to Avoid Them
The most frequent mistakes German companies make when setting up in India: late FEMA filings, missing forms for treaty relief, works council surprises, apostille errors, PE creation and transfer pricing gaps.
Read the guide →Sources
Last updated 26 October 2026. General information only, not legal or tax advice. Indian and German rules change often; confirm current requirements before acting.