The hidden immigration and tax risks behind India Inc.’s global expansion

The growth story of Indian business is no longer confined to India. Increasingly, they are expanding into some of the world’s fastest-growing markets. What was once a handful of Indian companies investing overseas has become a new generation of businesses building a truly global footprint. Today, an Indian company expanding overseas does not only merely enter a new market; it also carries the responsibility of showcasing ‘Brand India’ to the rest of the world.

In the current global landscape, regulatory frameworks are changing rapidly. Countries are tightening border protection laws, strengthening compliance checks on immigration, tax and social security, and seeking to protect revenue through stronger tax enforcement. While India is actively signing trade agreements and encouraging companies to enter new markets, the pace of this expansion requires Indian businesses to be equally prepared for compliance obligations.

For India Inc., global expansion is often planned around client demand, market entry, and delivery timelines. However, the immediate focus is frequently on expediting employee onboarding and commencing operations quickly in the new location. Cross-border talent mobility is far more than a human resources or travel exercise; it constitutes a distinct regulatory mandate unique to each sovereign jurisdiction. In the US, employers must verify work authorisation and petition for the correct immigrant or non-immigrant classification before a foreign national can work. In the EU, a non-EU national’s right to work depends on national law, although frameworks such as the Blue Card, Single Permit, and ICT (Intra-Corporate Transferee) route provide structured pathways. In the UAE and Singapore, a valid work permit or work pass is a precondition to employment, while Australia places continuing reporting obligations on approved sponsors. The practical implication is clear; deployment planning must begin with role mapping, sponsor readiness, work location, employment structure, and permitted activity, rather than merely coordinating travel logistics and employee onboarding.

As corporations accelerate global recruitment, immigration compliance has emerged as a critical and growing blind spot. The most severe yet entirely preventable exposure lies in permitting operational deployment before the requisite right-to-work checks, visa, work pass, permit, or sponsor framework is legally established. For instance, USCIS (US Citizenship and Immigration Services) lists knowingly hiring unauthorised workers, Form I-9 failures, document fraud and pattern-or-practice violations as civil or criminal exposure. UK sponsor guidance states that illegal-working breaches can lead to licence revocation and civil penalties of up to £60,000 per illegal worker. UAE rules warn that working without proper visa status can lead to imprisonment, fines and/or deportation for both employer and employee. Singapore’s EFMA (Employment of Foreign Manpower Act) provides fines and imprisonment for employing a foreign worker without a valid pass, and in Australia, sponsor breaches can trigger cancellation, bans, penalties, and enforceable undertakings. Initial compliance missteps can quickly become a business continuity challenge.

These regulatory risks are not merely theoretical. On July 8, 2026, the US Department of Labor’s Office of Inspector General launched a nationwide investigation into fraud and human trafficking risks in the H-1B and PERM (the labour-certification step required for most US employment-based green card categories, such as EB-2 and EB-3) programmes, working with DHS (Department of Homeland Security), DOJ (Department of Justice) and the federal Task Force to Eliminate Fraud. Investigators

have issued subpoenas to employers and labour brokers, examining allegations of fraudulent applications, wage-kickback arrangements and below-market-wage practices. Employers sponsoring H-1B workers or filing PERM applications should expect closer review of the LCA (Labour Condition Application), PAF (Public Access File), wage attestations, worksite and role accuracy, and the genuineness of the underlying job opportunity. For India Inc., this enforcement wave shows that immigration exposure has moved from paperwork risk to an active, cross-agency investigative priority.

Employee movements can also trigger tax and payroll obligations for the sending Indian company in the host jurisdiction. Payroll tax, social security withholding and labour compliances vary by country, and employers setting up a presence abroad need to assess these requirements before employees land in that location. For example, USCIS notes that employers of foreign workers may be subject to special US tax withholding rules, while foreign nationals employed in the US may have their own tax and social security obligations. A related and recurring issue in tax litigation is the risk of permanent establishment (PE): HMRC guidance states that, even without a fixed place of business, a dependent agent can create a PE if the person habitually concludes contracts or plays the principal role leading to contract conclusion. Work-permit conditions add a further layer of exposure, since they are often tied to a specific role and location. Singapore’s rules link the worker to the employer, occupation and salary declared to the Ministry of Manpower (MOM), while US H-1B rules require employers to attest to wage levels. An immigration mismatch (wrong employer, unreported work location or unauthorised role) can just as easily weaken the factual basis for payroll, PE and treaty-position analysis. Another area frequently overlooked by companies is tracking business travellers. Unchecked and repeated presence of employees in foreign jurisdictions can give rise to regulatory compliance requirements. Missing these can cause unintentional exposure to non-compliance risks. This risk is often compounded by employees travelling on the wrong visa category. Together, these gaps can cause unintentional exposure to non-compliance risks.

Correct structuring of international work arrangements, proper documentation, and advance planning are therefore critical before employees are deployed overseas.

For individual employees, navigating host-country tax compliance and reporting obligations demands uncompromised vigilance. Non-compliance can affect future visits, particularly as tax and immigration streams become more closely linked. Residency rules differ by country, and Indian citizens may also have global income and foreign asset reporting obligations in India in years when they are ordinarily resident in India. Differing tax years can create double taxation, requiring recourse to Double Taxation Avoidance Agreements, subject to specific conditions. A common misconception is that limiting physical presence to less than 182 days automatically protects an individual from tax exposure. This is not always the case. In practice, DTAA conditions can be nuanced, and employees and HR teams may not know the details of the commercial arrangement under which work abroad is performed. This can lead to incorrect tax positions and increased risk. Proactive and timely professional guidance is invariably far less costly than future notices, litigation, and loss of brand value.

A “one size fits all” approach, or an assumption that Indian processes can simply be replicated abroad, can become an expensive mistake.

These rules show why managing mobile workforces cannot sit only with HR operations; it is a multi-functional process. In several countries, work permits are closely linked to employer compliance, and violations can suspend new permits for offending firms. Mobility governance must therefore involve legal, tax, payroll and business leadership. Indian companies still face a significant learning curve as the understanding of the complexities remains limited, and some businesses often resort to reactive, ad hoc measures to facilitate employee movement. Integrated mobility planning (aligning

tax, immigration, payroll, and legal functions before deployment) is the strategic framework that many Indian companies have yet to implement. As ESG priorities become deeply institutionalised within corporate strategies, ensuring compliance in cross-border workforce mobility must be elevated to a fundamental pillar of sound corporate governance. The practical solution is not to impede expansion but to plan a cross-border workforce by holistically integrating tax, payroll, social security, and regulatory considerations. Prior to talent deployment, the company should confirm the host-country route, sponsor or licence position, permitted duties, work location, salary and payroll mechanics, dependent tax implications, and whether PE exposure has been properly managed.

As global regulatory bodies accelerate their audit requirements and implement highly rigorous sponsor-level scrutiny, integrated mobility planning is not merely an operational recommendation. It is now the baseline risk-mitigation standard needed to withstand regulator reviews and to ensure that India Inc.'s global ambitions are matched by credible, compliant execution.

(Sengupta is India Lead & Partner, Vialto Partners; Jinny is Partner, at Vialto Partners. Views are personal.)