Whether your offshore staff work from home or office is easy to hear as a preference, phrased as culture or supervision. For a delivery center inside an Indian Special Economic Zone, part of that answer is fixed by a rule the provider did not write, and that rule has already been replaced since it first appeared. The rest is whatever your contract says, and a contract that says nothing leaves the choice with the provider.
Offshore Staff Work From Home or Office Is Decided Before You Ask
A Special Economic Zone in India is an enclave with its own customs and tax treatment, and a company operating inside one is a Unit working under a letter of approval that names its premises and the services it may perform. For those Units, work outside the zone is governed by rule 43A of the Special Economic Zones Rules, 2006. The Ministry of Commerce and Industry substituted the whole rule on 7 November 2023, and the replacement is titled Hybrid working (G.S.R. 824(E)).
Sub-rule (2) sets who the rule reaches: employees of information technology Units and information technology enabled services, employees who are temporarily incapacitated, employees who are traveling, and employees who are working offsite (G.S.R. 824(E)). Only the first of those turns on what the Unit is approved to do, and whether accounting production counts as an information technology enabled service turns on how the Unit itself is approved, not on how the work is described in a proposal. The rule does not define the last one, so it is worth asking which category the people on your account sit in rather than assuming it is the first.
If the provider's delivery center is not a Unit inside a zone, rule 43A is not what settles the question, and nothing in the provider's registration constrains where people sit. If the site is in the Philippines instead, there is a statutory ceiling on the share of the workforce who may work from home, and it sits inside the provider's incentive registration, which outsourcing accounting to the Philippines sets out.
What Rule 43A Says Today
The current text is looser than the one it replaced, and looser in the places a firm cares about. Sub-rule (4) says the facility for hybrid work may cover all the employees of the Unit, so there is no headcount ceiling left in the rule. Sub-rule (5) requires the Unit to intimate the Development Commissioner, the central government officer who administers the zone, by email on or before the date the facility is permitted (G.S.R. 824(E)). That is notice, not approval.
The paperwork moved rather than disappeared. Sub-rule (6) excuses the Unit from filing the list of people on hybrid work, but requires it to maintain that list and produce it for verification whenever the Development Commissioner asks (G.S.R. 824(E)). A list that has to exist is a list your contract can reach.
The permission also has an end date. Sub-rule (3) originally ran to the end of 2024, and an amendment made on 26 December 2024 substituted 31 December 2027 (G.S.R. 786(E)). A contract signed now can outlive the permission that currently allows the arrangement, which is an argument for saying what happens to the site if the rule lapses.
The version first notified in July 2022 read differently. It capped work from home at 50% of the Unit's total employees including contractual employees, allowed it for a maximum period of one year, and put both the equipment and the secured connectivity on the Unit (Press Information Bureau, 2022). The Development Commissioner could extend that period a year at a time on the Unit's request, and could approve a share above 50% for a bona fide reason recorded in writing. A provider still quoting that ceiling is quoting a rule that has been replaced.
The Office Still Has to Exist
The zone Unit cannot quietly become a network of homes. Sub-rule (7) conditions the hybrid work facility on the Unit continuing to operate from the premises named in its letter of approval, and sub-rule (8) requires the work done outside to be within the services approved for the Unit and related to one of its projects (G.S.R. 824(E)). The office is a condition of the arrangement, not a courtesy the provider extends on request.
That is worth knowing when the answer you get is "we are hybrid". In the rule's own words, hybrid working is a flexible work model whereby an employer may permit its employees to work from office or from any location outside the employer's office from time to time. It describes an option, not a split. The split is the thing you actually need, and only the provider can tell you what it is on your account.
Whose Equipment, and Whose Network
Sub-rule (11) lets the Unit give an employee duty-free goods, including a laptop, a desktop and other electronic equipment needed for hybrid work, and lets that equipment leave the zone on a temporary basis, provided it stays accounted for in the Unit's records and available for verification. Sub-rule (12) allows that removal only for as long as the hybrid work facility is valid, and makes the duty payable if the equipment does not come back (G.S.R. 824(E)).
Read the verb. The rule permits the Unit to issue the machine. It does not oblige it to, so "the firm supplies the laptop" is a fact about that provider rather than a fact about India.
The connection is a larger hole. The current text says nothing about it at all, while the announcement of the older version put secured connectivity on the Unit alongside the equipment (Press Information Bureau, 2022). If you care whether your workpapers cross a home router, the rule will not settle it for you. Your own safeguards duty does not move with the desk either, which is the subject of cybersecurity for CPA firms.
Who Counts as Their Staff
The rule defines employees for its own purposes, and the definition is wider than a payroll list. Sub-rule (13) covers people on the rolls of the Unit, people under a direct contract, and people supplied under a contract with another organization where the Unit is the principal employer, where those people report to the Unit for work on a day to day basis, and where the Unit controls their attendance (G.S.R. 824(E)).
That width is useful to you. "Our employees all work from the office" can be true while contracted people on your account work somewhere else, because they are not employees in the sense the speaker meant. A site term that reaches only the provider's payroll leaves the gap open. Write it to reach anyone who touches your files.
Write the Site Into Your Contract
The site is a term you can require, and on the India side the documents that would prove it already exist. These are the clauses worth insisting on.
- The named site. Which legal entity performs your work, and from which premises. A zone Unit and an ordinary company office sit under different regimes, and the difference decides whether rule 43A reaches your work at all.
- The registration. Whether that entity is a Unit inside a Special Economic Zone, and if it is, which category of sub-rule (2) its people fall in. The answer should come with the letter of approval, not with a sentence of reassurance.
- The evidence. For a zone Unit, the email to the Development Commissioner and the maintained list of people on hybrid work both have to exist. Reserve the right to see them on reasonable notice, and note what happens if they cannot be produced.
- The share. What proportion of the people assigned to you may work outside the office, and how much notice you get before that proportion changes. A ceiling you never audit is a preference again.
- The equipment. Whose machine, whose build, whose encryption, who supports it, and who recovers it when the person rolls off your account.
- The network. Whether work on your files may be done over a residential connection at all, and if it may, through what. This is the clause the Indian text leaves entirely to you.
The site is one of the few variables in an offshore engagement you can settle with a sentence, and on the India side the rule leaves documents behind that let you check the sentence is true.
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