Gibtele, a telecommunications company, sought to employ Indian residents through a Professional Employer Organization (PEO) in India. Majmudar & Partners provided comprehensive legal guidance on potential permanent establishment (PE) risks and other tax implications associated with this employment model.

Facilitating the Transaction

Majmudar & Partners played a crucial role in assisting Gibtele by:

• Assessing PE Risk: Evaluated whether employing Indian residents through a PEO could inadvertently create a PE for Gibtele in India, leading to unforeseen tax liabilities.
• Employee Tax Compliance: Advised on the tax obligations for Indian employees, including income tax withholding, social security contributions, and adherence to local employment laws.
• Structuring Employment Agreements: Drafted and reviewed employment contracts to ensure compliance with Indian labor regulations and to mitigate potential legal risks.
• Navigating Regulatory Frameworks: Guided Gibtele through India’s complex regulatory environment, ensuring all statutory requirements were met for employing residents through a PEO.

By leveraging Majmudar & Partners’ expertise, Gibtele successfully employed Indian residents through a PEO without triggering any PE risks in India. This strategic approach enabled Gibtele to expand its workforce efficiently while remaining compliant with Indian tax and employment laws.

Majmudar & Partners specializes in providing legal solutions for international companies navigating employment and tax regulations in India. Contact us to learn how we can assist your business in achieving compliant and efficient operations in the Indian market.