Setting up presence in India
There are several ways a business can make an entry into Indian markets; and the format in which it sets up operations will be a consequence of the purpose as well as goals of the entrant business. Entities can be in various formats – from being simply a project office with definitive goals to being a partnership wherein the parent entity is looking to establish a long term presence in India. To know of the various types of entities that can be created and to acquire a holistic understanding of the attributes and guidelines of the different formats, please download this document.
Funding of Indian Business
The next step to setting up a business in India is to decide upon an appropriate format for the funding of the entity. The option(s) selected will depend on the type of entity as well as the strategy the parent entity or group has in place as to tap into the growing potential of Indian markets. From seed capital and equity to debt and bank receipts there are several options available to the entrant business. To know of the possibilities available for funding of Indian businesses as well as to understand the features of the various formats, please download this document.
The Indian tax system has always posed as an inhibition for international companies to setup and expand their businesses into Indian markets. However, there have been some radical reforms in the compliance and taxation regulations in recent times. From introducing new policies to changing guidelines to changing tax structures, the Direct Tax system in India is seeing a consistent uptick of progression. To help you get started, this document will outline all the information you need to factor in when planning your business operations in India.
Transfer Pricing Regulations
Subsequent to commencing operations and taking into consideration the tax implications of your business operations in India, it is important to develop an understanding of transfer pricing regulations that will be applicable on the financial transactions between your business’s global entity(ies) and your Indian business entity. Particularly because India’s tax treaties with different countries play a role in transfer pricing, this document will help you strengthen your approach to international transaction with respect to your Indian business entity.
As part of its efforts to bring more coherence to taxation in India with respect to global practices as well as to improve India’s standing in the World Bank’s Ease of Doing Business index, the Government of India introduced the Goods and Services Tax in mid-2017. The new tax has not only eased transactions through its uniformity supported by digitisation but also brought several unorganised sectors into the tax fold, consequently benefitting the business ecosystem in India. This document briefly explains the nature of the new Tax and the various rates that are applicable for different categories of goods and services, depending on their nature.
Goods and Services Tax
Given that your business entity in India will need to factor in key technological strengths and know-how that will be instrumental to your operations in India, it will be necessary to bring in important managerial and execution personnel to India to setup operations correctly and at times for longer-duration management. Therefore, it is also important to understand all the taxations as well as bureaucratic mandates that will be applicable on your expat employees stationed in India. This document will provide the preliminary knowledge that you will require to help you make an informed decision on how to proceed with your employee appointments and postings.
General Anti Avoidance Rule
An insight into the details and implications of GAAR introduced through Chapter X-A, section 95 to 102 inserted during Finance Act 2013.
The Indian POEM
The Finance Act 2015 amended the residency test for a company, wherein a company would be considered as resident in India if it is an Indian company or if a company’s Place of Effective Management (POEM) is in India during the relevant year. It was defined as “a place where key management and commercial decisions that are necessary for the conduct of the business of an entity as a whole are, in substance made.”