India Desk

India desk: German law for companies and investors from India

Our India desk serves a fast-growing group of clients. Companies from India have expanded steadily in Germany, particularly in IT services and software, engineering and automotive components, pharmaceuticals, chemicals and renewable energy. Many have acquired German Mittelstand companies to gain technology, brands and access to European customers, while IT service providers have built large delivery teams in Germany.

The legal questions follow these business models: how to structure entry and acquisitions, how to bring IT and engineering staff to Germany, how the double tax treaty and permanent establishment rules apply to services, how to draft technology and services contracts under German law, and what the EU-India trade agenda will change. At the same time, German companies are expanding in India and need German law advice on their side of the relationship.

This page is part of our international clients practice. It describes the legal framework and how we work, without claims about individual team members' backgrounds.

Entry structures and acquisitions

Most companies from India establish a German limited liability company (GmbH), which requires share capital of at least EUR 25,000 and notarised articles of association. A subsidiary is usually preferred over a branch because German customers, banks and employees expect a local legal entity and because a branch leaves the Indian parent fully liable.

Indian regulations on overseas direct investment must be observed on the Indian side and are outside the scope of German law, so our India desk coordinates with Indian counsel on them, but they affect the timing and structure of capital contributions. Opening a German bank account requires documentation of the ownership chain and can take several weeks, so it should start as soon as the articles are signed. See our GmbH formation checklist.

Acquisitions of German companies by buyers from India follow German M&A practice: share purchase agreements with independent guarantees, notarisation of GmbH share transfers, locked-box or completion accounts mechanisms and, often, warranty and indemnity insurance. Many targets are family-owned Mittelstand companies whose founders stay involved for a transition period, so earn-outs, management agreements and cultural integration matter.

Sellers often care about the continuity of the site and the workforce as much as about the price, and credible commitments on these points can decide a competitive process. Acquisitions by non-EU investors of 10%, 20% or 25% of the voting rights in companies in sensitive sectors can be reviewed under the Foreign Trade and Payments Ordinance, and in listed sectors must be notified before closing (§ 56 AWV). See our pages on mergers and acquisitions and international clients.

Integrating a German Mittelstand target

After acquiring a German company, buyers from India often want to integrate it into global processes for IT, purchasing, HR and finance. In Germany, many of these changes require works council involvement, for example when introducing new HR software, changing working time models or relocating functions. Transfers of functions to India can trigger operational change procedures with social plans and, for tax purposes, transfer pricing and exit taxation considerations. Planning integration with these steps in mind avoids conflicts with employees and authorities.

Pharmaceuticals, chemicals and regulated products

Indian pharmaceutical and chemical companies supplying the German market face EU product regulation that applies regardless of where the producer is located. Medicinal products need a marketing authorisation and manufacturing sites must comply with good manufacturing practice, verified through inspections. Chemical substances exported to the EU must be registered under REACH, which non-EU manufacturers can do through an only representative established in the EU. Generic medicines are priced through reference pricing and rebate contracts with German health insurers, which are awarded in tenders. Our India desk works with our life sciences and chemicals practices on these matters; see our pages on life sciences and healthcare and chemicals.

Immigration for IT and engineering staff

Bringing skilled staff from India to Germany is a central concern for our India desk. The EU Blue Card is the main route for university graduates: it requires a job offer with a salary of at least 50% of the annual contribution ceiling in the statutory pension insurance, which equals EUR 50,700 in 2026, or a reduced threshold of EUR 45,934.20 for shortage occupations, including many IT and engineering professions, and recent graduates (§ 18g AufenthG).

IT specialists with substantial professional experience can, under conditions, obtain a residence permit even without a formal degree. Blue Card holders can obtain permanent residence after 27 months, or 21 months with German language skills at level B1, and family members can join them with facilitated conditions, which makes the Blue Card attractive for longer-term assignments and recruitment.

For temporary assignments within a group, the intra-corporate transfer card (ICT card) allows managers, specialists and trainees to work in a German entity of their group for a limited period (§ 19 AufenthG). Employers can apply for the accelerated skilled worker procedure at the immigration authority on behalf of the employee, which shortens visa processing (§ 81a AufenthG). The opportunity card (Chancenkarte) allows qualified persons to come to Germany to look for work and to work part-time during the search (§ 20a AufenthG). See our pages on immigration and global mobility and our insight on the EU Blue Card.

Employment contracts for staff from India

Employees from India working in Germany are protected by German employment law in the same way as German employees. Contracts must state the essential terms in writing, salaries must at least meet the minimum wage and, for Blue Card holders, the salary threshold, and working time is limited to an average of eight hours per working day. Holiday entitlement, sick pay and dismissal protection apply. Social security coordination between India and Germany can avoid double contributions for posted employees under certain conditions, and posted workers need a certificate of coverage. Our India desk helps clients design assignment policies that work under German law and Indian requirements.

Double tax treaty and permanent establishment

The double tax treaty between Germany and India allocates taxing rights and reduces withholding taxes on dividends, interest, royalties and fees for technical services. For Indian IT and engineering service providers, the central question is whether their activities in Germany create a permanent establishment. Under German law, a fixed place of business at the company's disposal (§ 12 AO), dependent agents who habitually conclude contracts, and construction or installation projects lasting longer than the treaty threshold can create a permanent establishment, with profits taxable in Germany. Long-term deployment of staff at client premises can also create a taxable presence depending on the facts and the treaty.

Where a German subsidiary exists, transfer pricing for services provided between the Indian parent and the German entity must be at arm's length and documented, and German tax audits regularly review offshore delivery models. Royalty and service payments from Germany to India may be subject to German withholding tax, which can be reduced under the treaty with an exemption certificate.

Coordination with tax advisers in both countries is essential, because the same facts may be assessed differently by the German and Indian tax authorities, and mutual agreement procedures under the treaty take time. Clear documentation of which functions are performed where, who has authority to conclude contracts and how long staff stay in Germany is the best protection against unexpected tax assessments. See our page on international tax and transfer pricing.

Technology and services contracts under German law

Indian IT companies serving German clients typically contract under German law and on the client's terms. German law classifies IT contracts according to their content: software development as a contract for work with acceptance, ongoing services as service contracts, and SaaS subscriptions often as rental-type contracts. Clients' standard terms are reviewed for fairness under § 307 BGB, but suppliers should still negotiate liability caps, acceptance procedures, change request mechanisms and termination rights.

Outsourcing contracts with banks and insurers must meet supervisory requirements and, for financial entities, the Digital Operational Resilience Act. Temporary deployment of staff at client sites must be structured so that it does not amount to unlicensed temporary agency work, which German law regulates strictly: if the client directs the deployed staff like its own employees, the arrangement can be reclassified, with an employment relationship deemed to exist with the client and fines for both parties.

Data protection is a key issue: personal data processed for German clients in India requires a transfer mechanism, usually standard contractual clauses, because there is no EU adequacy decision for India, and a transfer impact assessment. India's own Digital Personal Data Protection Act adds requirements on the Indian side. Contracts should allocate controller and processor roles, security measures and audit rights clearly. See our insight on IT outsourcing in regulated sectors.

The EU-India trade agenda

The EU and India concluded negotiations for a Free Trade Agreement on 27 January 2026, and on 11 September 2026 the European Commission presented proposals to the Council for its signature and conclusion, according to the Commission's trade policy page. Negotiations on an investment protection agreement and a geographical indications agreement, launched in 2022, continue.

Once in force, the FTA is expected to reduce many tariffs on goods traded between the EU and India and to address services, public procurement and regulatory cooperation; companies should check the final text and its rules of origin to see which benefits apply to their products. Until then, current tariffs and the EU's other trade instruments apply. German exporters to India and Indian exporters to Germany should review their supply chains and origin documentation in preparation.

German companies doing business in India

Our India desk also supports German companies expanding in India from the German law side. Typical topics are the German parent's governance and compliance obligations for its Indian subsidiary, export control licences for technology transfer to India, supply chain due diligence for Indian suppliers under the Supply Chain Due Diligence Act, and contracts with Indian partners governed by German law. Matters of Indian law are handled together with counsel admitted in India. Anti-corruption compliance is a particular focus, because German companies and managers can be liable in Germany for bribery committed abroad.

Renewable energy and infrastructure

Indian renewable energy developers and manufacturers of solar modules, wind components and electrolysers are increasingly interested in the German market. Projects in Germany depend on grid connection, permits, land rights and support under the Renewable Energy Sources Act, which is being reformed, and on long-term power purchase agreements with industrial buyers. Manufacturers supplying German projects must meet EU product rules and, increasingly, sustainability and resilience criteria in tenders and support schemes, including requirements under the Net-Zero Industry Act. Investments in energy infrastructure by non-EU investors can be subject to investment screening. See our page on energy and infrastructure.

Disputes and enforcement

For contracts between Indian and German parties, arbitration is often preferred because both countries are parties to the New York Convention, and awards can be enforced in both. Institutional arbitration under the rules of the ICC, the DIS or Asian institutions is common, with seats in Germany, Singapore or London. Recognition of Indian court judgments in Germany depends on the conditions of § 328 ZPO, including reciprocity, and is less predictable. Since 1 April 2025, German Commercial Courts can hear business disputes from EUR 500,000 in English where the states provide for it, which can be attractive for Indian companies litigating in Germany. See our page on international arbitration.

How our India desk helps

Our India desk advises Indian companies and investors on setting up and growing their business in Germany: formation of subsidiaries, acquisitions of German companies and their integration, employment contracts and works council matters, immigration of IT and engineering staff, and technology, services and outsourcing contracts under German law. We advise on investment screening, data protection and data transfers, and coordinate with tax advisers on treaty and permanent establishment questions. We represent clients in German courts and in arbitration, and advise German companies on their business with Indian partners. To discuss your plans, please contact us. This page provides general information, not legal advice.