Global ExpansionFebruary 3, 2026by pamgro-adminHow to Work for US Company from India?

If you’re in India and want to work for a US company, whether as a freelancer, part-time remote employee, or long-term hire, this guide gives you the complete, practical roadmap you need for 2026.

A recent report shows that six out of ten Indian professionals now prefer global remote roles over relocating abroad, driven by tighter visa processes and the desire to access international opportunities while staying in India.

This shift underscores a broader reality: Indian talent is increasingly pursuing remote, cross-border work, and that includes opportunities with US-based companies. In this guide, you’ll find a clear roadmap for working for a US company from India, covering legality, structure options, compliance, payments, and real-world steps you need to take to make that transition successful in 2026.

In this guide you’ll learn:

Yes, it is legally permitted for Indian residents to work for a US company while living and performing the work from India. The legality depends less on where the company is and more on where the work is actually performed and how you are paid and taxed.

Here’s the practical breakdown:

Remote Work = Export of Services

Providing services from India to an overseas company is treated under Indian law as export of services. That means:

• You can invoice a foreign entity for services rendered from India

• You can receive payments in foreign currency (USD, EUR, etc.)

• The RBI’s Foreign Exchange Management Act (FEMA) permits this as cross-border services trade.
  (Source: Reserve Bank of India – FEMA regulations)

Because the work and services are performed outside the US, this income is generally not taxed in the US as long as you are not a US tax resident, but it must be reported and taxed in India in your Indian income tax return.
(Source: Income Tax Department of India)

What this means for you

You are not breaking any law by working from India for a US company. However, how your work relationship is structured (contractor vs employee) dictates your tax treatment, compliance, and payment mechanism.

There are three common and compliant ways you can work for a US company as an Indian resident. Each comes with different tax, compliance, and practical considerations.

This is the most common arrangement for Indians working remotely for foreign companies.

• You draft an agreement with the client

• You issue invoices for your work

• You declare business income in India

Pros:

• Minimal employer compliance burden

• Flexible arrangement

Cons:

• You handle your own taxes, GST/LUT, and accounting

• No standard employee benefits

This model requires careful tax reporting and compliance, which we’ve covered later.

In this scenario, the US company directly employs you even though you work from India.

How it works:

• The employer must decide how they will process payroll

• Many US firms handle this via offshore payroll or compliance partners

• This model is uncommon without local entity presence

Pros:

• You have employee status

• Benefits like leave, insurance may apply

Cons:

• Employer’s compliance burden increases

• Must handle Indian statutory requirements

With an EOR, your employment contract is with an Indian legal entity that acts on behalf of the US company.

• You are on Indian payroll

• Benefits and statutory compliance handled by the EOR

• The US company avoids direct entity setup

Pros:

• Best balance of compliance + simplicity

• Employee benefits managed locally

Cons:

• EOR fee applies

This is the cleanest approach if you want full-time employment with all statutory employee benefits without compliance headaches.

If you have previously worked in the US on an H-1B visa and returned to India, here’s how that affects your remote work prospects:

Once you return to India and are no longer physically present in the US:

• Your H-1B status is effectively inactive

• You are treated as a non-US person performing services from India

This means your work arrangement with a US company is not tied to your H-1B anymore; it simply becomes work from India.

If you meet the Indian tax residency criteria (e.g., 183 days presence), your global income, including income from the US company, is taxed in India.

This is why proper income reporting and compliance are critical.

To avoid unnecessary withholding in the US, most US companies will request:

IRS Form W-8BEN (Certificate of Foreign Status of Beneficial Owner)

This tells the US company:

• You are not a US tax resident

• They need not withhold US federal tax

(Source: IRS — Official Form W-8BEN)

Since you are working in India:

• US payroll obligations (like Social Security / Medicare) typically do not apply

• Indian compliance takes precedence

If you’re working for a US company while living in India, your tax liability is determined by Indian tax law, not US payroll rules. The key factor is where the work is performed, not where the company is based.

Because the services are performed from India, your income is taxable in India, even if you’re paid in USD. However, you generally do not pay US income tax on this income if you’re not a US tax resident and the work is performed entirely outside the US.

This section breaks down the exact tax and compliance rules that apply in 2026.

Under the Indian Income Tax Act, if you qualify as a resident for tax purposes, your global income must be reported in India. This includes income earned from foreign clients or employers.

Tax residency is typically determined by the 183-day rule, among other conditions.
(Official source: Income Tax Department of India)

How you’re taxed depends on how you work:

• Independent contractor → business/professional income

• Employee (via EOR or payroll) → salary income

If you work as an independent professional or contractor, Section 44ADA can significantly simplify taxation.

Under Section 44ADA:

• Applicable if your gross receipts are up to ₹75 lakh in a financial year

• 50% of your receipts are deemed profit

• You pay income tax only on that 50%

• No detailed expense bookkeeping required

Example:

If you earn ₹60 lakh from a US client:

• Taxable income = ₹30 lakh (50%)

• Remaining ₹30 lakh is treated as expenses automatically

This provision is one of the main reasons many Indian professionals choose the contractor model when working with US companies. (Official source: Income Tax Act – Section 44ADA)

If you’re providing services from India to a foreign company, GST rules may still apply.

Key points:

• GST registration is mandatory if turnover exceeds ₹20 lakh in a financial year

• Services provided to a foreign client may qualify as export of services

• Export of services is zero-rated under GST

To avoid charging GST:

• • You must file a Letter of Undertaking (LUT)

  • You still need to file GST returns, even if no tax is paid

Official source: Central Board of Indirect Taxes & Customs (CBIC)

All foreign income received by Indian residents is governed by the Foreign Exchange Management Act (FEMA).

If you’re working for a US company:

• Payments must be received in India through approved banking channels

• Foreign income must be repatriated to India within prescribed timelines

• You should maintain proof of inward remittance (such as bank advice)

This applies whether you’re a contractor or employee.

Official source: Reserve Bank of India – FEMA Regulations

In most cases, no.

If:

• You are not a US tax resident, and

• You perform all services from India

Then US income tax typically does not apply. To confirm this to your US employer or client, you’ll usually be asked to submit Form W-8BEN.

This form certifies that:

• You are a non-US person

• The income is not effectively connected with US trade or business

Official source: IRS – Form W-8BEN

If you earn income from outside India or hold foreign accounts, you must disclose them in your Indian tax return.

This includes:

• Schedule FSI – Foreign Source Income

• Schedule FA – Foreign Assets (foreign bank accounts, etc.)

Failure to disclose foreign income or assets can attract heavy penalties, even if the income is fully taxed in India.

Official source: Income Tax Department – Foreign Asset Disclosure

Once compliance is clear, the next question is practical: how do you actually get paid?

There are three common ways Indian professionals receive payments from US companies.

Traditional bank transfers directly to your Indian bank account.

• Widely accepted

• Slower settlement

• Higher fees and FX markups

Works, but often inefficient.

Many professionals use global payment platforms that allow them to:

• Receive USD

• Convert at transparent exchange rates

• Transfer to Indian banks easily

This approach offers:

• Faster payments

• Better FX rates

• Clear transaction records for compliance

If you’re hired through an EOR:

• Salary is paid in INR

• Statutory deductions handled automatically

• You don’t manage invoicing or FX

Earnings vary by role, experience, and engagement model, but US-based compensation is typically higher than local Indian roles.

Approximate market ranges (illustrative):

• Software developers: $25–60/hour

• Designers & product roles: $20–45/hour

• Project & operations roles: $20–40/hour

• Customer support & ops: $12–25/hour

Actual pay depends on skills, niche, and company maturity.

• The first step is confirming how you are classified, because this determines your tax, compliance, and legal obligations. Misclassification is one of the biggest risks in cross-border work.

• Employees typically work for one company, follow set hours, and are subject to employer control. Contractors can serve multiple clients and control how and when work is delivered.

• If a US company wants to hire you as a full-time employee without setting up an Indian entity, the safest option is an Employer of Record (EOR) like PamGro, which legally employs you in India while the US company manages your work.

• Employees should receive a locally compliant Indian employment contract outlining salary, benefits, leave, notice periods, and statutory protections.

• Contractors need a well-defined service agreement clarifying scope of work, payment terms, IP ownership, and independence to avoid misclassification.

• When hired through PamGro’s EOR, contracts are automatically localized to Indian labor laws, protecting both the worker and the US employer from compliance gaps.

• Employees working for US companies typically submit Form W-8BEN, while contractors or entities submit W-8BEN-E, confirming they are non-US taxpayers.

• Regardless of classification, income earned while working from India is taxable in India, including applicable statutory contributions.

• PamGro handles Indian payroll taxes, statutory deductions, and filings on behalf of the employer, ensuring nothing is missed.

• Indian citizens working remotely for foreign companies generally do not need special permits, but foreign nationals residing in India must hold valid work or business visas.

• Compliance obligations don’t stop at visas—labor laws, minimum wage rules, and statutory benefits still apply.

• Using PamGro ensures continuous compliance monitoring as regulations evolve, reducing risk for both employee and employer.

• Payments can be received via direct bank transfer, virtual bank accounts, or international payroll systems—each with different cost and compliance implications.

• Contractors must track remittances carefully for tax and GST purposes, while employees should receive salary through compliant payroll.

• With PamGro, employees are paid via fully compliant Indian payroll, eliminating FX confusion, delayed payments, and reporting errors.

• Contractors exporting services from India may need GST registration and a Letter of Undertaking (LUT) to avoid paying IGST on foreign income.

• GST compliance depends on service type, invoicing structure, and place of supply—mistakes here are common.

• Employees hired through an EOR like PamGro are not required to manage GST, simplifying compliance significantly.

• All foreign income must be tracked under FEMA guidelines and reflected correctly in bank remittance certificates.

• Accurate records help during tax filings, audits, and future visa or financial reviews.

• PamGro provides structured payroll documentation that simplifies income tracking and disclosures.

• You must file Indian income tax returns annually, reporting global income and claiming applicable deductions.

• DTAA benefits may apply if any foreign tax is withheld, preventing double taxation.

• PamGro’s compliant payroll setup ensures tax filings are accurate, timely, and audit-ready.

Need help setting this up correctly? Talk to PamGro

PamGro helps Indian professionals work with US companies legally and compliantly, without the complexity of setting everything up alone.

With PamGro:

• You can be hired as a full-time employee in India on behalf of a US company

• Payroll, statutory benefits, and compliance are handled locally

• US companies can hire you without setting up an Indian entity

This approach is especially useful for long-term roles where stability, benefits, and clean compliance matter.

Yes. If you are living and working from India, a US work visa (including H-1B) is not required. US visas are only needed when you physically work from within the United States. When services are performed from India, Indian laws apply.

In most cases, no. If you are not a US tax resident and all services are performed from India, your income is generally not subject to US income tax. This is typically confirmed by submitting Form W-8BEN to the US company.

Yes, Indian law does not restrict working US time zones for foreign companies. As long as services are exported and income is received through permitted banking channels, working US hours from India is fully legal.

Yes, but with limitations. US companies can engage Indian professionals as contractors, or they can use an Employer of Record (EOR) to hire full-time employees compliantly without setting up a local entity.

It depends on your priorities.

• Contractor: More flexibility, potential tax efficiency, but you manage compliance yourself

• Employee (via EOR): Stability, benefits, payroll handled, less admin

Neither is “better” universally, the right option depends on income level, risk tolerance, and long-term plans.

Only if your turnover exceeds the prescribed threshold (currently ₹20 lakh per year).
If registered, services provided to foreign clients may qualify as export of services, which are zero-rated under GST, provided you file a Letter of Undertaking (LUT)

Yes. Indian residents are permitted to receive foreign currency payments for exported services. Payments can be received via international transfers, multi-currency platforms, or payroll arrangements, as long as FEMA guidelines are followed.

Yes. Freelancing or consulting for US clients from India is legal and widely practiced. However, income must be properly reported in India, and applicable tax and regulatory requirements must be followed.

Non-disclosure of foreign income or assets can attract significant penalties, even if the income itself is taxable and taxed in India. Proper reporting in the relevant schedules of the Indian income tax return is mandatory.

Yes. Many professionals start as contractors and later move to full-time employment through an EOR arrangement once the relationship stabilizes. This transition must be structured correctly to avoid misclassification risks.

You should be cautious. Cross-border tax and employment compliance involves overlapping Indian and international regulations. It’s important to rely on verified, India-specific expertise, especially as income scales up.