Rashmi Singh 23 November 2022

Reimbursement between entities

Hi, The director of an Indian entity has started another company in Dubai. This Dubai entity has utilized some employees on the rolls of the Indian entity to work for the Dubai entity. The salaries for these indian employees for the duration that they were working for the Dubai entity have been processed through the Indian Entity. Now, we want to transfer these employees legally to Dubai Entity. And, Dubai Entity wants to reimburse the Indian entity for the salaries for these employees for the period they were on the rolls of Indian entity but were working for the Dubai Entity. What is the best hassle free way to settle this payment for these employees with the Indian Entity?

Reply Follow

2 Replies

Real Soul.... (LEGAL) 24 November 2022

Entity - you mean branch or subsidairy or indpendent office;

Your query is hazy and vague; If the companies are subsidaries theh you need to pass transfer orders with terms of payment for salries.

It the companies are independent of each other with common propriertor/owner and you want to shift the emloyees from indian offcie to Dubai then you have to terminate the employment of employees in Indian Offcie and issue fresh appoitnment orders in the new compnay.

It depends how you structrued the companies - best way is to draft MOU between the two concerns and and in that you can incorporate an articlticle about recruitment, transfer, termination etc of employees.