Documentation helps you prepare an HR Documentation Checklist for Foreign Employers Hiring in India, ensuring legal compliance, valid work permits, correct tax obligations, and clear employment contracts to avoid penalties and streamline onboarding.
Step-by-Step Checklist for Employee Onboarding
Onboarding Checklist Overview| Step | Required Documents / Actions |
|---|---|
| Pre-employment | Passport, Aadhaar, PAN, address proof, offer letter |
| Joining day | Signed employment contract, bank details, nominee form |
| Statutory enrolment | EPF, ESI registration, tax declaration (Form 12BB) |
| Records | Signed copies, background check reports, onboarding checklist |
Pre-Employment Verification and Identity Documentation
Collect copies of government-issued IDs (passport, Aadhaar, PAN), proof of address, and academic credentials; you should require scanned originals or certified copies to confirm authenticity for visa-supported hires.
Verify identity through background checks, employment history, and biometrics where permitted; you must flag any identity mismatches or discrepancies that could trigger compliance risks or visa complications.
Post-Joining Statutory Declarations and Enrollment Forms
Prepare statutory declarations, nominee forms and tax declaration templates (for example, Form 12BB) so you can capture investments and exemptions for accurate TDS computation.
Enroll the employee into EPF and ESI where applicable, register for professional tax and obtain bank details for salary; if you miss enrollment it can attract penalties and jeopardise benefits.
Maintain signed copies and digital records on the employee file and complete government portal filings within statutory timelines so you preserve compliance and enable smooth claims processing.
Essential Statutory Registrations for Foreign Entities
You must complete company incorporation with the ROC, register for GST where applicable, and set up employee social security accounts (PF/ESI) if you hire staff; failure to register can attract penalties and disrupt operations.
PAN, TAN, and Tax Identification Requirements
Obtain a PAN for the entity and a TAN if you will deduct tax at source, while ensuring non-resident directors and employees have PAN or documented exemptions; late filings and missing IDs lead to fines and withholding issues.
Shops and Establishments Act Licensing
Register under the local Shops and Establishments Act for each state office to define working hours, leave entitlements and record-keeping obligations; noncompliance may result in fines or closure orders.
State-specific rules vary on registration timelines, mandatory notices and inspection regimes, so you should consult the state labour department and keep registers updated annually; accurate filing reduces inspection risk.
Pros and Cons of Different Hiring Models
| Pros | Cons |
|---|---|
| Wholly owned subsidiary: full control over hiring, policies, and brand presence. | Wholly owned subsidiary: high setup cost and ongoing compliance burden (registrations, audits). |
| Branch office: quicker market entry for foreign firms with ability to conduct limited business. | Branch office: needs RBI approvals and faces activity and tax restrictions. |
| Liaison office: low setup cost and simple reporting for non-commercial representation. | Liaison office: cannot invoice locally and is strictly limited in activities. |
| PEO/EOR: rapid hiring with provider handling payroll, taxes, and statutory filings. | PEO/EOR: higher service fees and misclassification risk if contracts aren't precise. |
| Contractors/consultants: flexible engagement and cost control for short-term needs. | Contractors/consultants: risk of misclassification, reduced control, and IP protection issues. |
| Joint venture: local partner knowledge and shared commercial risk. | Joint venture: complex governance and potential partner disputes that affect operations. |
You should match the model to your risk tolerance, speed requirements, and willingness to handle Indian statutory obligations; the table helps you compare trade-offs quickly.
Consider documentation needs like employment contracts, statutory registers, payroll records, and termination paperwork when choosing a model to avoid penalties.
Establishing a Wholly Owned Subsidiary
Setting up a wholly owned subsidiary gives you direct control over hiring, policies, and payroll, and lets you apply global HR standards locally, but you must manage company registrations, tax filings, and labor compliance continuously.
Utilizing Professional Employer Organizations (PEO) or EOR
Using a PEO/EOR lets you employ staff quickly while the provider handles payroll, statutory contributions, and local filings, which is ideal when you need speed and operational simplicity.
Outsourcing through an EOR reduces administrative burden, but you should expect higher recurring fees and limited contractual control over employment terms and termination.
Be sure you conduct due diligence on the provider's compliance record, insurance, and local registrations, since provider non-compliance or misclassification can expose you to fines and back liabilities.
Conclusion
Following this HR documentation checklist, you ensure compliance with Indian employment and immigration laws while maintaining accurate visa, tax, contract, and payroll records. You should confirm valid work permits, PAN and GST registrations when applicable, statutory deductions, and clear employment agreements. You will reduce legal risks and speed onboarding by keeping organized records, periodic reviews, and consulting local counsel for complex cases.