India is a fast developing country and a foreigner employed in India is not an unusual sight anymore. They have to abide by some rules and regulations while working in India, and for their queries, they search answers on the internet. Two most frequently asked questions asked are
1. Do they need to contribute to social security in India, and if yes, would they get an exemption?
2. Can withdraw the provident funds?
1. The Social Security Contribution
Until a few years ago, no foreign employee had to contribute to the social security in India. The rule, however, was changed in 2008. Now, a qualified international worker has to contribute to the Indian social security.
2. International Worker
An international worker is a person who can work in an Indian company, where Employee Provident Fund rules apply, even if he or she does not possess an Indian passport. India has signed a Social Security Agreement with many countries and if the international worker is from one of those countries, with a Certificate of Coverage, he or she may contribute to the social security only in their own country.
3. Social Security Agreement
Social Security Agreement (SSA) is a mutual agreement between two countries to protect the social security interests of an employee in a country from the other country. India has signed this agreement with many countries such as Switzerland, Germany, France, Belgium and Luxembourg to ensure that Indian workers are treated equally in that country and vice versa.
4. Provident Fund Withdrawal
An expatriate, working in India, can withdraw his or her provident fund under the following conditions:
- If the international worker is covered under an SSA, the worker can withdraw the provident fund according to the regulations of that particular SSA.
- If the worker is not covered under an SSA, he or she can withdraw the provident fund at the age of 58, which is the age of retirement. However, exceptions are made if he or she has retired because of any incapability to work or is suffering from leprosy, cancer and tuberculosis.
- An international worker under an SSA can have the provident fund credited to his or her bank account outside India. However, if he or she is not covered under an SSA, the PF would be credited to his bank account in India.
Recently, the Reserve Bank of India has permitted expatriates to maintain their bank accounts in India even after repatriation in order to settle their pending dues.