Visa and Tax Travails of Foreign Artists in India By Poorvi Chothani

Engaging foreign nationals in the entertainment industry has been a long time favorite with Bollywood producers. Earlier, foreign nationals were engaged as supporting performers in dance sequences or as cabaret dancers often referred to as “item girls,” a term that is not intended to be pejorative. Foreign nationals have also been involved in Bollywood as technicians and cinematographers.  As the Indian entertainment industry, with an increasing global reach, has evolved, there has been an influx of artists including actors from overseas, TV personalities, dancers, musicians, international singers and many more.   According to some industry opinions, foreign actors are attractive because they (1) offer fresh faces and international personalities, (2) command lower fees  (3) do not have impossibly busy schedules, (4) offer the mystique and charm of being “foreign,” and (5) foreign women actors tend to be less inhibited than local ones about risqué scenes.

Whatever may be the reason, Bollywood is welcoming the increased number of foreign artists into its fold, many even from directly across the border, despite strained political relationships.   In this article we will explore how these individuals may be authorized to work in India.

Background

Hitherto foreign artists of any origin were generally issued business visas, albeit not a legal option in many cases as they were gainfully engaged in work within India.  On expiry of their business visas, these artists went back to their countries of origin and were issued fresh visas or came back on business visas for another stint in India.   Generally, banks open bank accounts for those foreign nationals who were authorized to work or were in the country on long-term visas, for example, either as students or dependents of Indian nationals.  But, banks have continued to open accounts for foreign nationals even if they were on business visas.  Payment to the foreign artists was facilitated through these accounts, or they were paid overseas or they were paid in cash (i.e., bank notes).

Overview of Employment Visas

India has always had among other categories, specific B or Business visas and E or Employment visas.  However, until 2009 there was not much clarity on when a person must have an employment visa to work in India.  In 2009, the Ministry of Home Affairs published guidelines by way of FAQs where the government gave some clarity on the difference between these two categories.  Employment visas are generally issued to highly skilled specialists, managers or executives only. Employment Visas are not granted for jobs in positions where large numbers of qualified Indians are readily available. All employment visa applications must be sponsored by a duly registered Indian entity.  Employers are required to pay foreign nationals on employment visas in India a minimum annual salary of more than $25,000. Any perquisites such as housing, telephone, transport, entertainment etc., which are received in kind, should not be included when computing the salary of the individual.  Sponsoring employers are also required to certify that the visa holder will comply with all applicable tax requirements, including the timely filing of tax returns in India.

Foreign national employees who have not paid the appropriate taxes or otherwise complied with Indian tax laws may be required to depart the country. In addition, noncompliant foreign nationals are subject to deportation and possible imprisonment, although this is rare. Either the foreign national employee or the Indian sponsoring company may incur the cost of repatriation and any penalties imposed by the tax authorities.

Appropriate Visas for Working in Bollywood

The way the FAQs are drafted, it was widely understood that foreign nationals coming to participate in the entertainment industry should obtain employment visas.  But in practice we saw consulates issuing business visas to such foreign nationals.  The anomaly, we thought was due to the differences between the Ministry of External Affairs that issues visas and the Ministry of Home Affairs that makes the policy.  To get this clarified, we filed a Right to Information application with the Ministry of Home Affairs regarding the conundrum faced by foreign nationals coming to engage in brief stints and received a response to the Right to Information request, from the Ministry stating that a Business visa will suffice.  This is an anomaly as a foreign national can neither “work” in India, nor accept remuneration for “services rendered” while in India on a business visa.

A Business visa is also very inconvenient unless it is for a year or more as the foreign national artists has to leave ongoing projects for long periods of time till they obtain new business visas.

The Government of India under one of its FAQs now requires foreign nationals in fields like acting, adventures, modeling etc. to procure employment visas within the ambit of the Employment visa.

Talent management companies, generally being registered Indian entities sponsor the visas for foreign nationals allowing them to stay and work in India for extended periods.

Foreign nationals coming on employment visa to work in the field of modeling, advertising and films are required to submit a contract/agreement signed with the visa sponsor clearly specifying the terms of remuneration.  Such foreign artists do not receive a fixed salary from the visa sponsor and are paid a large portion of the fee that the talent management company charges on behalf of the foreign national as compensation for their work.  Foreign nationals who are unable to establish when applying for their visa, that they will receive the minimum salary equivalent to $25,000 are granted stay in India for three months within which they should gain enough contracts or confirmation that they will receive the minimum salary. Foreign nationals who are unable to comply with this requirement are required to leave the country.  This sometimes results in the exploitation of lesser-known artists.

It is important to note that all remuneration paid to foreign nationals is subject to withholding tax and India’s social security payments under The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.

Talent management companies, which are service providers, are liable to pay service tax to the government. This burden is often passed on to the contracted foreign national, who now face the burden of agency charges, income tax, as well as service tax.  But the entertainment industry being what it is, and the remuneration being high for successful artists, foreign nationals are generally not complaining.

Poorvi Chothani is the founder and managing partner of The Law Offices of Poorvi Chothani and LawQuest a unified business and immigration law firm with offices in New York, Mumbai and Bengaluru. Her practice has been focused on immigration law since 2003. This coupled with more than 25 years of experience in dispute resolution, corporate and commercial laws enable her to provide holistic legal counsel to LawQuest’s clients.  She can be reached at poorvi@lawquestinternational.com

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