The Reserve Bank of India released a Notification in early December  which amended the Foreign Exchange Management (Foreign Currency Accounts by a Person Resident in India) Regulations 2000 affecting both:

  • Payment of salary outside India to employees of a foreign company who are on secondment to an office, branch, subsidiary or joint venture in India (Indian entity) of the foreign company.
  • The remittance of salary received by foreign nationals whilst resident in India who are employees of Indian companies.

The Notification replaces the earlier sub-regulation (8) of regulation 7 and now allows an approved category of persons who are on secondment in India or employed there to receive or remit their entire post-tax salary outside India.


Prior to this amendment, an employee of a foreign company, who was on secondment to an Indian entity could receive up to 75% of his salary into a foreign currency bank account outside

India subject to the following conditions:

  • The remaining salary was paid in India in Indian rupees.
  • Indian income tax was paid on the entire taxable salary

Key changes to the regulations

1.Employees on secondment to India :- The Notification has increased the amount of salary that may be received outside India from 75% to 100%.  The requirement to pay Indian income tax remains unchanged.

The Notification also indicates that the post-tax salary can be paid to the employee fully by either the foreign or Indian entity  or partly by both. Previously, only the foreign entity was permitted to pay 75% of the individual’s salary outside India.

2.Foreign nationals employed  directly by an Indian company :- The Notification permits a foreign national who is employed by an Indian company to remit overseas his entire post-tax salary received  in India, i.e., the Indian company can pay their salary in Indian  Rupees into the individual’s Indian bank account and they can then remit the entire amount to their overseas  bank account.

This only applies to foreign nationals who are employed by Indian companies, i.e., foreign nationals who are employed by the Indian branch of a foreign company will not be eligible for this unless their employment in India is by way of a secondment.

Next steps

Employers should review their existing secondment and employment arrangements which involve foreign nationals in India, to ensure that:

  • They comply with the tax and exchange regulations
  • They take advantage of the changes to the payment arrangements where possible

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February 2024