Precautionary Steps: India Suspends Visa of German Nationals

published on 13 March 2020 | reading time approx. 1 minute

India: The travel and visa restrictions have been further updated and come into effect on 13th March 2020, 5:30 p.m. (IST).

• The suspension of visa is now applicable to nationals of any country and valid until 15 April 2020.
• The Suspension of Visa is not applicable to those who hold an Employment or Project Visa or those who are already in India.
• It is possible to apply for a new visa if a travel to India for compelling reasons is required It remains to be seen what circumstances justify a compelling reason for a new visa application.
• Foreigners and Indian nationals, arriving from or having visited China, Italy, Iran, Republic of Korea, France, Spain and Germany after 15th February, 2020 will be quarantined for a minimum period of 14 days.
   

This update is a welcome relief from the initial advisory, as now at least employment and project visa holders can continue to travel to India. Further other foreigners can under certain circumstances apply for a new visa.

For Details refer to: Bureau of Immigration India » 

To avoid an immediate impact on projects of foreign enterprises in India, for example assembly of plants and machinery, a timely discussion with Indian customers and planning of alternative solutions to fulfill contractual obligations is required.

From legal and tax angle the following three aspects gain high relevance:

• Defending against penalties and damages due to late delivery, based on force majeure,
• At the same time securing payments from India,
• Review whether the pausing of activities in India may temporarily halt the expiry of the 6 months threshold relevant for having a Permanent Establishment in India – this may be challenged by India tax authorities.

In the medium run, with meetings of the Board of Directors in India getting impossible, companies may have to operate their Indian subsidiaries from Germany for a certain period of time. Resolutions may have to be taken by video conference or circulation. In case the situation persists, this may bear the risk of the Indian subsidiary creating a Permanent Establishment in Germany due to management activities performed in Germany.

For further updates and information please feel free to contact us.