Training Presentation - LO,BO,PO,FDI
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Transcript of Training Presentation - LO,BO,PO,FDI
India Entry - Liaison Office (LO), Branch Office (BO),
Project Office (PO), Foreign Direct Investment (FDI)
India Entry Options
A representative office set up
primarily to explore and
understand business investment
climate.
No commercial activities carried
out.
Channel of communication
An establishment carrying on
substantially the same activity as
its HO.
Suitable for setting up temporary
offices.
An establishment set up for the
limited purpose of executing a
specific project.
Also called site office.
Liaison Office Branch Office Project Office
FDI
FIIs – Foreign Institutional Investors, NRIs – Non Resident Indians, PIO – Persons of Indian Origin, QFI – Qualified Institutional Investors
Foreign Venture
Capital
Investments
Automatic
Route
Foreign
Investments
Other
Investments ( G -
Sec , NCDs , etc )
Foreign Direct
Investments
Foreign Portfolio
Investments
Investments on
non - repatriable
basis
Government
Route
Persons Resident
outside India
SEBI regd .
FVCIs
NRIs , PIO ,
QFIsFIIs
VCF IVCUs
NRIs , PIONRIs , PIO ,
QFIs
LO BO PO - Suitability
Branch Office
• Export / import of goods
• Rendering professional or consultancy
services
• Promoting technical or financial
collaborations
• Representing parent company in India
and acting as buying/selling agent in
India
• Carrying out research work in which
parent company is engaged
• Rendering services in IT and development
of software in India; providing technical
support
• Representing a foreign airline / shipping
company
Liaison Office
• Representing the parent Company in
India
• Promoting export/import from/to India
• Promoting technical/financial
collaborations between the parent
companies and companies in India
• Acting as a communication channel
between the parent company and Indian
companies
Project Office
• There are no specific permitted activities
for a Project office
• They have secured a contract from an
Indian company to execute a project in
India; and
• The project is funded directly by inward
remittance from abroad; or
• The project is funded by a bilateral or
multilateral International Financing
Agency; or
• A company or entity in India awarding the
contract has been granted Term Loan by a
Public Financial Institution or a bank in
India for the project.
FDI suitability
FDI is prohibited in the following sectors
• Lottery Business including Government/private lottery, online lotteries, etc.
• Gambling and Betting including casinos etc.
• Chit funds
• Nidhi company
• Trading in Transferable Development Rights
• Real Estate Business or Construction of Farm Houses
• Manufacturing of cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes
• Activities not open to private sector investment (such as atomic energy and railway transport)
Setting up BO/LO/PO
• Prior approval of RBI required in the following cases for setting up BO/LO/PO in India:
- Country Specific Restrictions– Applicant is a citizen of or is registered/citizen in Pakistan
- Region/State Specific Restrictions - The applicant is a citizen of or is registered/incorporated in Bangladesh, Sri Lanka,
Afghanistan, Iran, China, Hong Kong or Macau and the application is for opening a BO/LO/PO in Jammu and Kashmir, North East
region and Andaman and Nicobar Islands;
- Sector Specific Restrictions - The principal business of the applicant falls in the four sectors namely: Defense, Telecom, Private
Security and Information and Broadcasting.
- Type of Organization - The applicant is a Non-Government Organization (NGO), Non-Profit Organization, Body/ Agency/
Department of a foreign government.
Liaison Office(LO), Branch Office (BO), Project Office
(PO)
General Criteria for LO/BO/PO
• Type of entities that can open LO/BO/PO
- Company / Body corporate
- Firm/LLP
- Other association of individuals
incorporated outside India, in sectors where 100% FDI is allowed
• Track record for entities applying for BO/LO
LO BO
Track record
of profits
Preceding 3 financial
years
Preceding 5 financial
years
Net worth Atleast USD 50,000 Atleast USD 100,000
Applicants who do not satisfy the eligibility criteria and
are subsidiaries of other companies can submit a Letter
of Comfort from their parent company, subject to the
condition that the parent company satisfies the eligibility
criteria as prescribed here.
Procedure for application
Application in Form FNC
•Submission of application in Form FNC to designated AD Category I Bank along with required details
Grant of approval
•RBI shall allot a Unique Identification Number (UIN) to each BO/LO
•Post allotment of UIN, AD Category I Bank shall issue approval letter for establishing BO/LO in India
Set up of LO/BO/PO
•After receiving permission for setting up of BO/LO/PO, AD Category I Bank to be informed date on which BO/LO/PO is set up
•The approval granted shall lapse if the BO/LO/PO is not opened within six months from the date of approval letter
•The AD bank may grant an extension of six months in case the delay is due to reasons beyond control of the non-resident entity
•Prior approval of the RBI shall be required for any further extension
Opening of Bank Accounts
Liaison Office
•Only One Bank Account can be maintained at a given point of time without prior permission of RBI by an LO.
•Following transactions are permitted in such Accounts
•Credits : Funds received from office, refund of security deposits, taxes, duties etc. and Sale proceeds of assets of LO
•Debits : Local Expenses of the office
Branch Office
•Following transactions are permitted in such Accounts
•Credits : Funds received from HO for meeting expenses of the office and any other legitimate receivables in process of business operations
•Debits : expenses incurred by the BO & towards remittance of profit / winding up proceeds.
Project Office
•Can open two foreign currency accounts – One denominated in USD and other in home currency
•Conditions for opening Non- interest bearing foreign currency accounts• Contract governing project specifically
provides for payment in Foreign currency.
• Following transactions are permitted in such Accounts
• Debits : payment of project related expenditure
• Credits : foreign currency receipts from parent/ group company
• Accounts have to be closed on the completion of the project
Compliances - LO/BO/PO
LO BO PO
Annual Activity Certificate
(AAC)
To be submitted to –
• AD category – I bank
• DGIT Income Tax
To be submitted to –
• AD category – I bank
Validity Period 3 Years* 3 Years Tenure of the project
Extension Available subject to conditions Available subject to conditions N.A.
Additional Office If number of offices exceeds 4 (1 in each zone), the applicant
has to justify the need for additional offices & require prior
approval of the RBI
N.A.
*Except for NBFC & entities in Construction & development validity ~2 years (Cannot be renewed)
Funding, repatriation and Exit (1/2)
The AD bank may extend fund/non-fund based facilities to BOs and POs only
Remittance of profits/surplus:
• BOs permitted to remit profit net of applicable taxes
• POs permitted to make intermittent remittances before winding up / completion of project subject to sufficient provisioning for taxes
Closure of BO/LO/PO
• Application for closure to submitted with the following documents:
• Approval letter for establishing the BO/LO/PO
• Auditors certificate
• Confirmation from the applicant/parent company that no legal proceedings are pending
• Report from the Registrar of Companies regarding compliance with the provisions of the Companies Act, 2013
• AD bank to ensure that the BO / LO/ PO had filed their respective AACs
Funding, repatriation and Exit (2/2)
Transfer of assets
• Proposals considered only from BOs/LOs/POs who are adhering to the operational guidelines
• Transfer of assets by way of sale to the JV/WoS allowed only when the non-resident entity intends to close their BO/LO/PO
operations in India
• certificate is to be submitted from the Statutory Auditor furnishing details of assets to be transferred
• assets should have been acquired by the BO/LO/PO from inward remittances and no intangible assets such as good will, pre-
operative expenses should be included
• AD bank must ensure payment of all applicable taxes while permitting transfer of assets
• Credits to the bank accounts of BO/LO/PO on account of such transfer of assets will be treated as permissible credits
• Bonafide donation by BO/LO/PO of old furniture, vehicles, computers, etc. to NGOs or other not-for-profit organizations be
permitted
Other GuidelinesRequirement of obtaining PAN
• BOs / LOs / POs shall obtain Permanent Account Number (PAN) from the Income Tax Authorities on setting up of their office in India
• The existing PAN and bank accounts can be continued when an LO is permitted to upgrade into a BO
Transactions of LO/BO/PO
• BO/ LO/PO are required to transact through one designated AD bank only who shall be responsible for the due diligence and KYC norms
• BO/LO/PO can change their existing AD bank subject to both the AD banks giving consent in writing
Allowance of Term Deposit by AD category Bank
• Term deposit account for a period < 6 months in favour of a BO/LO/PO of a person resident outside India permitted subject to certain
conditions
ROC Compliances (if any)
General permission to carry out permitted/ incidental activities from leased property subject to lease period not exceeding five years
Taxation
Taxation
Branch Office & Project Office
• A BO/PO would constitute a PE in India
• In determination of the tax liability, expenses relating to PE in India would be deductible in computing taxable income
• While computing the profits attributable to PE in India, the deduction for head office expenditure will be restricted to 5% of taxable
income of branch.
• MAT will be applicable
Transfer Pricing Applicability
Branch Office
• Transactions between BO and HO subject to transfer pricing regulations.
Project Office
• In case of PO, Transactions are subject to transfer pricing regulations. - It is treated as an extension of the foreign company and is
liable to pay income tax.
Taxation Liaison Office
Since no commercial activities are undertaken, no income is
earned and hence no taxability
• Tax treaties also provide that maintenance of a fixed
place of business for the collection of information or any
other activity of a preparatory or auxiliary nature will not
lead to the creation of a PE or a taxable presence for the
foreign entity in India
• But PAN and TAN have to be obtained
• LO has to file an Annual Statement (Form 49C) under Sec
285 of IT Act within 60 days from end of FY
• The Annual Statement contains details of work carried
out by LO, information on employees, agents, distributor
and representatives etc. It helps the tax authorities to
determine whether the foreign entity has a PE in India.
Nike Inc - Karnataka HC
• Activities confined to purchase of goods for purpose of
export not taxable
• Identifying manufacturers, providing technical know-how
to manufacturers, acting as an interface between
manufacturers and parent entity cannot be construed as a
taxable activity
Brown & Sharpe Inc – Delhi ITAT
• Rendering services for promotion and sale of products is a
taxable activity
• In this case, the LO was registered with the ROC for
establishment of a place of business in India and filed IT
returns showing losses under Business Income. Further,
the variable component of employee salaries depended
on the number of sales orders placed.
• The LO received from the HO amounts over and above the
actual expenses incurred by it. Such excess amount was
held to be chargeable as business income.
To determine the taxability of LO in India, it is relevant to examine whether LO is
carrying out am important part of the business activity of the foreign company or it
is merely carrying out subsidiary and ancillary activities
Comparative Analysis
Comparative Analysis (1/2)Particulars Liaison Office (LO) Project Office (PO) Branch Office (BO)
Permissible activities Acting as a communication channel
between parent company and Indian
audience. However, it is not allowed to
undertake any business activity in India
Established provided the foreign parent
have secured a contract from an Indian
company to execute a project in India
Can carry out certain trading / service
activity / acting as a buying and selling
agent in India
Legal status Represents Parent Extension of Parent Extension of Parent
Ownership of immovable property Not allowed (but can be leased for limited
period)
Allowed to acquire Allowed to acquire
Life Initial approvals are given for 3 years Up to the life of the project Initial approvals are given for 3 years
Maximum Income Tax Rates / Minimum
Alternate Tax (‘MAT’)
No tax since no commercial activity being
carried out
40 % (In case of tax losses MAT @ 18.5 %
on book profits could be applicable) [to
be increased by applicable surcharge &
cess]
40 % (In case of tax losses MAT @ 18.5 %
on book profits could be applicable) [to
be increased by applicable surcharge &
cess]
Dividend Distribution Tax Not applicable Not applicable Not applicable
Control Generally with parent
Approvals Approvals of Authorised Dealer / Reserve
Bank of India
Approvals of Authorised Dealer / Reserve
Bank of India
Approvals of Reserve Bank of India
Comparative Analysis (2/2)Particulars Liaison Office (LO) Project Office (PO) Branch Office (BO)
Funding of Indian operations Through inward remittances received from the
Head Office outside India through normal
banking Channels
Through inward remittances or through
earnings from business operations
Through inward remittances or through
earnings from business operations
Repatriation of Funds As such, there may not be any repatriations
from the LO. However, in case of closure of
the LO, the balance cash may be repatriated
with the Reserve Bank of India approval
Approval not required for remittance of post-
tax profits to the foreign parent outside
India, subject to filing of requisite documents
with the AD
Approval not required for remittance of post-
tax profits to the Head Office outside India,
subject to filing of requisite documents with
the AD
Exit mechanism Prior approval of the RBI, ROC, IT authorities, certificate from the Auditors indicating and confirming certain facts and a confirmation from the
parent Company that there are no legal proceedings in any court in India pending and there is no legal impediment to the remittance would be
required
Foreign Direct Investment
Eligible Investors / Investees
Eligible Investors Investees
• Person Resident outside India / entity incorporated outside
India
• Entity / citizen of Bangladesh / Pakistan through
government route
• Investment from Pakistan not allowed in defense, space
and atomic energy
• NRIs resident in / citizens of Nepal / Bhutan (subject to
certain conditions)
• FII / NRI / FVCI / QFI as per regulations governing those
investors
• Special dispensation available to NRIs also available to
Company / trust / partnership firm incorporated outside
India and owned & controlled by NRIs
• Eligible NRIs can invest in NPS on repatriable basis
• Indian companies
• Firms and proprietorships
• Automatic: investment by NRI / PIO non-repatriation basis
• Approval route for all other cases
• Trusts – VCFs and Investment Vehicles
• LLP – in sectors where 100% FDI is permitted, subject to
certain conditions
• Investment Vehicles – including REITs, InvITs & AIFs
Eligible InvesteesFDI in Partnership Firm/ Proprietary Concern
NRI / PIO Other Non residents
Non repatriation
option
• Inward remittance or out of NRE/FCNR(B)/NRO account
maintained with AD Bank.
• The firm or proprietary concern is not engaged in any
agricultural/plantation or real estate business or print media
sector
Prior approval of RBI shall
be required
Repatriation option Prior approval of RBI shall be required Prior approval of RBI shall
be required
FDI in Trust
• VCF & Investment Vehicles
(including REITs, InvITs &
AIFs) – Permitted
• Other trusts – Not permitted
FDI in LLP
a) LLPs operating in sectors/activities where 100% FDI under automatic route is
allowed and there are no FDI linked performance conditions – FDI permitted
under automatic route
b) Downstream investments in (a) also allowed
c) Other cases – prior approval of the RBI
Sectoral Caps
Sector / Activity Percentage Entry Route
Agriculture and Animal Husbandry 100% Automatic
Plantation 100% Automatic
Miming 100% Automatic
Petroleum & Natural Gas – Refining by PSUs 49% Automatic
Petroleum & Natural Gas – Other 100% Automatic
Manufacturing 100% Automatic
Defence 49% Automatic
Broadcasting Carriage Services 100% Automatic
Broadcasting Content Services 49% Government
Print media 26% Government
Sectoral Caps
Sector / Activity Percentage Entry Route
Civil Aviation - Airports 100% Automatic
Civil Aviation - Air transport Service – Scheduled / Regional 100% 49% Automatic
Civil Aviation - Air transport Service – Non-Scheduled & Helicopter/Seaplane 100% Automatic
Civil Aviation – Others 100% Automatic
Construction Development: Township, housing, built-up infrastructure 100% Automatic
Industrial Parks 100% Automatic
Satellites 100% Government
Private Security Agencies 74% 49% Automatic
Telecom services 100% 49% Automatic
Trading – Cash & carry Wholesale 100% Automatic
Sectoral Caps
Sector / Activity Percentage Entry Route
E-commerce 100% Automatic
Single Brand Product Retail Trading 100% 49% Automatic
Multi Brand Product Retail Trading 51% Government
Duty Free Shops 100% Automatic
Railway Infrastructure 100% Automatic
Asset Reconstruction Companies 100% Automatic
Banking – Private sector 74% 49% Automatic
Banking – Public sector 20% Government
Credit Information Companies 100% Automatic
Infrastructure companies in Securities Market 49% Automatic
Sectoral Caps
Sector / Activity Percentage Entry Route
Insurance 49% Automatic
Pension Sector 49% Automatic
Power Exchange 49% Automatic
White Label ATM operations 100% Automatic
NBFC 100% Automatic
Pharmaceuticals – Greenfield 100% Automatic
Pharmaceuticals – Brownfield 100% 74% Automatic
Entry Routes
1. Automatic Route - the investor or the Indian company does not require any approval from Government of India
2. Government Route - prior approval of the Government of India / FIPB in cases where:
• Indian company established with foreign investment; or
• Transfer of control / ownership to a non-resident entity as a consequence of transfer of shares and/or fresh issue of
shares through amalgamation, merger/demerger, acquisition etc.; or
Debt instruments issued to non-residents shall not be treated as foreign investment. Equity holding resulting from
conversion of debt instruments shall be reckoned as foreign investment.
Investment by NRIs and any company, trust and partnership firm incorporated outside India and owned and controlled by
NRIs deemed to be domestic investment at par with the investment made by residents
Investment Companies
• Foreign investment into an Indian company, engaged only in the activity of investing in the capital of other Indian
company/ies/ LLP, will require prior Government/FIPB approval.
• Foreign investment into Non-Banking Finance Companies (NBFCs), carrying on activities approved for FDI, will be subject
to specified conditions. Core Investment Companies (CICs), will have to additionally follow RBI’s Regulatory Framework
for CICs.
• Indian company which does not have any operations and also does not have any downstream investments, will be
permitted to have infusion of foreign investment under automatic route.
Downstream Investments
Other requirements
• Notify SIA, DIPP and FIPB of its downstream investment within 30 days of such investment
• Downstream investment in an existing Indian Company supported by a resolution of the BoD as also a SHA
Foreign Investment
Eligible Investee(India)
Indian Company /
LLP
FDI
Downstream
Investment
Comply with
relevant sectoral
conditions (entry
rotes, caps, etc.)
Pricing / valuation
guidelines
applicable on
transfer / issue of
shares
Investments acquired under
CDR, restructured loans,
defaults etc. by Banking
companies NOT CONSIDERED
foreign investment
Bring in requisite funds from
abroad and not leverage funds from
the domestic market
May raise debt in the
domestic market
Eligible Instruments
* Optionality clause allowed subject to:
a. Minimum lock-in period – 1 year from date of allotment
b. Investor exercising the option to exit without any assured returns
Instrument Equity
Shares
Preference
shares
Debentures
Non-convertible /
vanillaP *
ECB ECBOptionally convertible
NAPartially convertible
Fully and compulsorily
convertibleP * P *
Conversion of CCD / CCPS:
a. Conversion formula / price of conversion to be
fixed upfront
b. Pricing at time of conversion:
Fair value at time of issuance: X
Price Allowed / not allowed
X+ Allowed
X Allowed
X- Not allowed
Eligible Instruments
Partly paid shares & Warrants
a. Conversion formula / price of conversion to be fixed
upfront
b. Consideration to be paid as follows:
c. Pricing at the time of conversion:
At least 25% upfrontBalance to paid within:
a. Partly paid shares – 12
months
b. Warrants – 18 months
Fair value at time of issuance: X
Price Allowed / not allowed
X+ Allowed
X Allowed
X- Not allowed
Other Conditions:
a. Government Route - Approval of FIPB
b. Non-payment of calls – Forfeiture
c. To ensure that sectoral caps are not breached even after
shares get fully paid-up or warrants are converted
Eligible Instruments
Foreign Currency Convertible Bonds (FCCBs) and Depository Receipts(DRs)
a) FCCBs/DRs may be issued in accordance with guidelines issued in that respect.
b) A person can issue DRs, if it is eligible to issue eligible instruments to person resident outside India
c) The aggregate of eligible securities which may be issued or transferred to foreign depositories, along with eligible
securities already held by persons resident outside India, shall not exceed the limit on foreign holding of such
eligible securities under the relevant regulations framed under FEMA, 1999.
d) Pricing guidelines and Reporting requirements to be complied with
Two-way fungibility Scheme
Sponsored ADR / GDR issue
Provisions Relating to Issue
Issue price of shares: Not less than –
a. Listed shares – as per SEBI guidelines
b. Unlisted shares - Fair value of shares (done by Merchant Banker / CA as per any internationally accepted pricing
methodology on arm’s length basis); and
c. Preferential allotment - Price as applicable to transfer of shares from resident to non-resident as per RBI guidelines
d. Subscription to MOA - May be made at face value
Inward remittance / Debit to NRE/FCNR(B) a/c *
Allotment of capital instrumentsOR
Refund to non-resident investor
Within 180 days
* Amount may be retained in Foreign currency with RBI approval
Provisions Relating to Transfer
Transferor Transferee Sale Gift
Non-resident Non-resident P P
Non-resident NRI P P
NRI NRI P P
NRI Non-resident RBI approval RBI approval
Non-resident Resident P P
Resident Non-resident P RBI approval
General permission for transfer
The transfer is subject to the following conditions:
- Company being in a sector under Automatic route
- Compliance with pricing guidelines
Provisions Relating to Transfer
Transfer which requires Government approval:
i. Sectors under Government approval route
ii. Breach of sectoral caps
Transfer which requires approval of the RBI:
i. Transfer from resident to non-resident by way of sale, where payment of consideration is deferred
ii. Gifting of shares from a resident to non-resident
iii. Transfer of shares from NRI to non-resident
iv. Transfer of shares from and to erstwhile OCBs
v. Cases where pricing guidelines are not complied with
Conversion of ECB/ Lump sum Fee into Equity
General permission for issue of equity shares / CCD / CCPS against:
• ECB (excluding deemed ECB) in convertible foreign currency
• ECB under Automatic or Government route
• Whether due for payment or not
• Includes secured / unsecured loans from non-resident collaborators
• Lump sum technical know-how fee & royalty (conversion to be net of applicable taxes)
• Import of capital goods/ machinery / equipment (excluding second-hand machinery)
• Pre-operative / pre-incorporation expenses (including payment of rent)
Rights / Bonus Shares
• Issue of Rights/ Bonus shares to existing non-resident shareholders allowed, subject to sectoral cap and compliance
with applicable statutory requirements
• Offer price for rights issue:
• Listed company - price determined by the company
• Unlisted company - not less than the offer price for resident shareholders
• Additional allocation of rights share by residents to non-residents
• out of the unsubscribed portion
• overall issue of shares to non-residents does not exceed the sectoral cap
• Rights / Bonus issue to erstwhile OCBs
• Rights issue – RBI approval required
• Bonus issue – general permission
M&A, ESOPs, Share swap
Acquisition of Shares under a court approved Scheme of Merger/Demerger/Amalgamation
• Sectoral cap not breached
• Transferor/Transferee company is not engaged in activities which are prohibited under FDI policy
• Bonus issue of Non convertible / redeemable preference shares or debentures
• distribution as bonus from its general reserves under a court approved Scheme of Arrangement
• subject to no-objection from the Income Tax Authorities.
Issue of ESOPs / Sweat Equity
• Scheme as per SEBI regulations / Corporate laws, as applicable
• Sectoral cap not breached
• FIPB approval – sectors under the approval route & issue of shares to Citizen of Pakistan / Bangladesh
Share Swap
• Valuation of shares by a Merchant Banker
• Government approval required for sectors under Government route.
Pledge of Shares
Pledge of Shares
• A person being a promoter of a company registered in India, which has raised ECB can pledge the shares of the
borrowing company or its associate resident companies for securing the ECB raised by the borrowing company provided
no objection obtained from a AD Bank.
• Pledge would be subject to the following conditions:
• Period of the pledge shall be co-terminus with the maturity of underlying ECB
• In case of invocation of pledge, transfer shall be as per FDI policy & directions issued by RBI
• Statutory auditor has certified that the borrowing company will /has utilized the proceeds of the ECB for the
permitted end use only.
Repatriation and Remittance
Remittance of Sale proceeds
a. Remittance made net of applicable taxes
b. Security sold is held on repatriation basis
c. Sale is in accordance with prescribed guidelines
d. NOC / Tax clearance certificate
Remittance of proceeds of liquidation / winding up
a. NOC / Tax clearance certificate
b. Auditors certificate (concerning provision for liabilities, compliances, etc)
Repatriation of Dividends / Interest
a. Repatriation to be net of TDS / DDT
b. Considered as a Current account transaction
Calculation of Direct & Indirect FDI
Direct Investment
All investment by non-resident shall be counted towards foreign investment
Indirect Investment
Considered as Domestic Investment Considered as Foreign Investment
Investing Company/LLP ‘owned and controlled’ by
residents/Indian Companies/LLPs Investing Company is ‘owned or controlled’ by non-
resident entitiesDownstream investment by Investment Vehicles*
* If either the Sponsor or Manager or Investment Manager is Indian ‘owned and controlled’
F.Co 1
I.Co 1
I.Co 2
49%
80%
F.Co 1
I.Co 1
I.Co 2
51%
80%
F.Co 1
I.Co 1
I.Co 2
75%
60%
F.Co 1
I.Co 1
I.Co 2
75%
100%
Taxation – Indirect Transfer
F.Co 1
F.Co 2
I.Co
F.Co 3
Taxable if:
• Value of assets in India > INR 10 Cr
• Value of assets in India > 50% of value of
all assets of F.Co 2
Note: The term ‘value’ means fair market value of
assets as determined under new Rule 11UB of
Income Tax Rules, 1962
Capital Gains taxable in India:
Gains on transfer
Value of ASSETS in India
India
Overseas
Value of all ASSETS of F.Co 2
X
As per Rule 11UC of Income Tax Rules, 1962
THANK YOU