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I'm a Indian citizen. A UK based company has approached me to work for them. I have never worked for a company outside India and I do not have a work permit or VISA to work in UK.

Since they are unable to support a VISA for me now, we are exploring the possibilities of me working from India for their company. The UK company does not have a branch / legal office here in India.

Here are my questions:

  1. Living in India, can I be a direct employee of the UK company? Is it legally allowed in India to draw salary from a UK company? Will I be paying income tax in India or in UK or in both the countries?

  2. If the above option is not a valid one, should I be a self employed contractor? Should I start my own company for this? If yes, what type of company - proprietary or private limited?

Thanks

  • Hi Anadan, and welcome. You might like to check out our other sites, particularly Expatriates and The Workplace which answer questions respectively about living and working abroad, and about employment practices. Either might be a better fit for this question. – DJClayworth Aug 22 '18 at 16:37
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Please be sure this is not some kind of scam. i.e. you know the company very well and can verify independently that the offer is genuine.

Living in India, can I be a direct employee of the UK company? Is it legally allowed in India to draw salary from a UK company? Will I be paying income tax in India or in UK or in both the countries?

You can be; however this puts quite a few reporting and taxation requirements on the foreign company and they may not comply or be able to comply. It is best not take this option if you are the only Indian worker.

If the above option is not a valid one, should I be a self employed contractor? Should I start my own company for this? If yes, what type of company - proprietary or private limited?

You can work as independent contractor or freelancer. You would need to pay taxes every month. It would be advisable to take the services of a qualified CA who will help you. As an independent contractor you can claim certain items as expenses, eg laptop, broadband etc reducing your tax liability. You can't claim quite a few other tax benefits that salaried employee get like LTA, Medical, etc

It is not necessary to have a proprietary or private limited company. You can work as independent contractor. If you need you can create any. They have their own merits and a CA would explain it better in your context.

  • Definite +1 for the first sentence alone. It seems very unlikely to me that a UK company without any presence in India would approach a random Indian person for work, unless you are extremely well-known in your field. – Vicky Aug 23 '18 at 8:49

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