Why payroll outsourcing is a game changer for European companies in India

Managing payroll abroad can be challenging and time-consuming, as each country has unique laws and regulations regarding social security and taxes. By outsourcing administrative matters, you won't lose valuable time and can focus on growing your Indian business. These are the benefits of payroll outsourcing for European companies in India.

Better compliance with local labor and tax laws

If you have staff abroad, you know better than anyone how important it is to stay up to date on the latest payroll regulations, such as annual salary increases, a 13th month paid holidays, etc. Keeping up to date in this area can take an immense amount of time, especially in India. In addition, being non-compliant with new regulations can negatively impact your business in the country. 

Therefore, to ensure compliance and reduce risk, it makes sense to outsource payroll to a local expert. That way, European companies can be sure that all processes comply with laws and regulations at the state, federal, local and industry levels, without having to invest significant resources. 

Streamline HR function through payroll outsourcing

Outsourcing payroll can reduce the workload on your HR department alleviate, allowing them to truly focus on human resources issues. By taking difficult administrative tasks off your HR staff's hands, they can focus on challenging cultural issues that need to be bridged, for example. 

Transferring payroll to a third party ensures that you do not have to hire and train additional staff, saving you money and time that you can invest in your core business.

Maintain confidentiality and transparency

With in-house payroll, there is a risk of losing sensitive personal data of employees. Therefore, it is advisable to consider payroll outsourcing. This approach helps maintain confidentiality while limiting access to payroll data to key decision makers and senior employees. 

To ensure data security compliance, it is essential to work with a trusted payroll administrator that offers secure solutions, including data encryption, storage and reporting.

Are you looking for a reliable administrative partner?

From our European offices in the Netherlands, Germany, Spain and Sweden, and our offices in Delhi, Bangalore, Pune and Chennai, IndiaConnected helps dozens of companies from across Europe do business in India every year.

For companies with a subsidiary in India, we take care of the entire administration: accounting, payroll, tax returns, legal support and necessary compliances. We also perform the Company Secretary and the Chartered Accountant function. Do you need business and tax registrations, such as GST, DIN, DSC or TAN? We apply for them for you.

Let us know what administrative matters you could use help with, and we will put together a customized package for you.

How does a foreign company deal with corruption in India?

Any foreign company doing business in India will eventually have to deal with corruption. Prime Minister Modi has made many changes in recent years to improve the situation in the country, but India still ranks 80th in Transparency International's corruption index. As an international company, you want to stay as far away as possible from paying bribes, because this can have serious consequences not only in India, but also in your own country.

Every year, Transparency International ranks 176 countries worldwide on corruption. India is ranked 80.

Clean business takes time

It is still not uncommon in India to be asked for 'speed money', an amount paid under the table to get a permit approved more quickly, for example. Despite the fact that in some cases it seems as if there is no other solution than to pay, we strongly advise international companies against this. Firstly, it is of course forbidden and secondly, it is perfectly possible to do clean business in India. 

For instance, the German IT company Optanium went to India to look for an accounting firm that could set up their entity in India without paying bribes. The process of setting up the company took longer, thirteen months instead of six, but it allowed Optanium India to get off to a flying start. An important tip is therefore to plan enough time for dealing with issues such as applying for licences or the release of your products from customs. 

It is easier for foreign companies not to cooperate with corruption'.

In an interview with Quartz, Ravi Venkatesan, former chairman of Microsoft India and author of the book 'Conquering the Chaos: Win in India, Win Everywhere', explains how companies should deal with corrupt situations. "It is easier for a foreign company not to participate in corruption. The local management can stand firm and say that paying bribes is against their company policy. If a hard line is taken, the bribe-takers will drop out." 

In addition, having a very strong administrative department is essential, according to Venkatesan. "Manage your business with competent, long-term administrative staff who can hold their own in discussions with officials. Many companies do not invest enough in these functions because they do not see them as the core of the business. Instead, they outsource these administrative tasks to local agents, who do pay the 'speed money' and simply bury it in their other expenses."

"Many companies in India do not invest enough in administrative staff. That makes them vulnerable to corruption."

- Ravi Venkatesan

Always your papers in order

Fortunately, there are more and more situations in India where corruption has been completely eliminated because those processes are now automated or better controlled, such as filing your taxes or getting your identification. If you make sure you always have all your paperwork in order and therefore never need special assistance, you can avoid corruption with ease.

Of course, the experts at IndiaConnected can help you ensure that your business is always and in every area compliant.