Do we need an AÜG licence for an offshore team in India?
The question German procurement raises first, and the one that stalls offshore engagements longest when nobody answers it plainly.
Last manually reviewed:
So does an offshore team need an AÜG licence?
No — as long as the work is performed in India. The German Temporary Employment Act (Arbeitnehmerüberlassungsgesetz, AÜG) governs workers who are hired out to work in Germany [1]. Someone who does their work entirely from India is not being hired out into Germany at all.
- The professionals are employed or contracted in India by KVC — not by you, and not by a German lender.
- The work is performed entirely from India. Nobody is integrated into a German workplace.
- Your contract is with JoinNow FZCO in Dubai. You receive a service invoice, not a hiring-out agreement.
- Travel to your site is the exception, not the model — and it is exactly where the analysis changes.
Why the answer holds
Three things decide it, and only the first is really doing the work.
Where the work happens
The AÜG addresses workers placed with a hirer to work in Germany [1][2]. Offshore delivery keeps the work in India, which is the ordinary arrangement across the entire Indian IT industry and has been for decades. The Federal Employment Agency's directives address this exact constellation — worker stays in the third country, working exclusively online for a German hirer — and place it outside the licensing requirement, while noting that no supreme-court ruling exists on it yet [2].
Who gives technical direction
You do — that is what staff augmentation means, and we say so everywhere on this site. Directing someone who works abroad is normal offshore practice; it is the place of work, not the direction, that brings a German licensing requirement into play.
What the contract actually is
You contract with a Dubai company for a service, and the employment relationship sits in India. There is no German lender, no hiring-out agreement, and no German employment relationship to license.
What this means for your review
What to document now, so procurement does not have to reconstruct it later.
Record where the work is performed
Make the place of performance explicit in the engagement documents. It is the fact the whole position rests on, and the one a later reviewer will look for first.
Treat site visits as a separate decision
A workshop or a kick-off week in Germany is a different arrangement from remote delivery. Decide it deliberately, with advice, rather than letting it happen by habit.
Keep the contracting chain visible
Dubai entity, Indian employer, your company. Three parties, documented, is far easier to defend than an arrangement nobody wrote down.
Ask us before you assume
If your legal team reaches a different conclusion for your industry or your works agreement, we would rather hear it early than argue it after signature.
What we hand over for the review
- The contracting structure in writing: which entity contracts, which employs, and where the work is performed.
- The data processing agreement and the compliance documents that go with the engagement.
- A call with your legal or procurement team, with our side of the setup explained directly rather than through a sales contact.
Follow-up Questions
Does it still hold if we assign tasks daily?
Day-to-day direction is exactly what staff augmentation involves, and it does not by itself pull a team working in India into German licensing. The place of performance is what the AÜG turns on. If your advisers weigh the direction more heavily for your particular setup, tell us and we will work through it with them.
What if someone travels to Germany for a workshop?
Then the facts change and so should the analysis. Short visits for a kick-off or a workshop are a different matter from a period of working at your site, and we treat them as a decision to take with advice rather than something that just happens. It is the reason travel is not part of the standard model.
Is this the same as a Werkvertrag or Dienstvertrag?
Neither label decides it on its own. What we provide is capacity working from India under your technical direction, invoiced as a service from Dubai. The right characterisation under German law depends on how your own contract is drafted, which is a question for your advisers rather than for a web page.
Does the same reasoning apply in Austria and Switzerland?
The territorial logic is similar but the statutes are not the same — Austria and Switzerland have their own rules on hiring out labour. We work with companies in all three countries and the offshore setup is the same, but confirm the position locally rather than assuming the German answer transfers.
Can our lawyers see the actual contracts before we commit?
Yes, and we would prefer they did. The contracting structure, the employment arrangement in India and the data processing agreement are all available for review before anything is signed.
Sources
All sources retrieved and checked against the cited passages on 6 August 2026.
- [1] § 1 Arbeitnehmerüberlassungsgesetz (AÜG) — scope of the licensing requirement. Federal Ministry of Justice, gesetze-im-internet.de — https://www.gesetze-im-internet.de/a_g/__1.html § 1(1) sentence 1 (our translation): “Employers who, as lenders, wish to supply workers (temporary agency workers) to third parties (hirers) for the performance of work as part of their economic activity require a licence.” German original at the link.
- [2] Fachliche Weisungen zum AÜG (official technical directives on the AÜG), valid from 1 July 2026, Bundesagentur für Arbeit (PDF) — https://www.arbeitsagentur.de/datei/fw-aueg_ba026870.pdf Section 1.2.3 para. 2 (pp. 9–10): where the lender sits in another EU/EEA state or a third country, the hirer sits in Germany and the worker stays abroad, working “exclusively online” for the German hirer, “the licensing requirement of § 1(1) sentence 1 AÜG does not extend to these cases for lack of sufficient domestic connection. No supreme-court case law exists yet on these constellations.” (our translation). Para. 3: once the work is performed (even partly) in Germany, the licensing requirement applies.
This page describes how our engagements are set up and how we understand the rules to apply to that setup. It is general information, not legal advice — have your own advisers review your specific situation before you rely on it.
Put this in front of your legal team
We will walk them through the structure directly — the contracting chain, the employment side in India, and the documents behind both.