The global flow of capital, investment and trade in fast changing world today requires businesses to respond quickly to meet international competition and to exploit emerging opportunities. When the multinationals look at business opportunities beyond the boundaries of their countries, they are faced with crucial question of structuring. It has to be structured properly to claim tax reliefs, minimise tax and avoid double taxation. So, it is very important for all the companies to understand the rules and regulations of overseas company registration and set up in India that are incorporated under the companies act 1956.Greenvissage helps you in all areas of the foreign company registration with a well-planned tax structures to make your process easier and comfortable
A substantial chunk of foreign direct investment has gone into IT and ITES industries. Most of the companies set up for IT services and BPOs enjoy a tax holiday under section 10A/10B. In order to claim these benefits, there are certain conditions attached to it and hence need to be planned accordingly. Our team of professional accountants help the investors to make up with foreign company registration in India throughout the guide and assist them to make the perfect plan accordingly.
Apart from structuring and tax incentives, the companies also need to be legally compliant. To garner full company satisfaction, we offer the key services of foreign company registration in India which make our organization a one-stop solution for all your inbound investment and legal service needs. With the professionals who are well aware about the regulatory approval process in different jurisdiction, we also provide assistance on entity and capital structuring for the inbound investments. Current exchange control regulations require an Indian company, which is not eligible to avail of the automatic route for accepting investments from foreign entities, to obtain approval of the Reserve Bank of India (“RBI”) every time it receives investments from overseas companies. However most of industry sectors are covered under automatic route and do not need approval from RBI. Certain set of compliances have to be done while accepting investments from overseas companies.
Global companies are facing increasing government scrutiny and complex reporting requirements. Hence awareness of local laws, regulations, taxes and practices is of paramount importance. We help companies in guiding them a structure which is tax optimum and legally compliant. Our services with regard inbound investments include following:
Outbound investments also referred to as Overseas Direct Investments (ODI) is a natural progression for firms who seek for better business opportunities available abroad. Necessary development in most of the major and important sectors of commerce and economy, and liberal FDI policies of governments, in countries of all around the world, have opened the door to extensive investments (domestic as well as foreign direct investments) in diverse profitable and financially secure sectors. Outbound investments from India have undergone a considerable change not only in terms of magnitude but also in terms of geographical spread and sectorial composition. So, there is an essential need to understand interplay of cross-border taxes and regulatory challenges in making up with outbound investments. The main sectors for investment includes manufacturing, Financial, Insurance and business services, Transport, storage, communication services, agriculture and mining, wholesale, retails, restaurants and hotels, social, personal services and many others. Our professional team will handle all your outbound investment services with key strategies by offering end to end financial and business solutions.
Current exchange control regulations require an Indian company, which is not eligible to avail to the automatic route for investing in foreign entities, to obtain approval of the Reserve Bank of India (RBI) every time it makes investments in ventures overseas. Automatic approval is available for investments in subsidiaries/joint ventures upto maximum of USD 100 million in one-year subject to certain conditions.
There is increased government scrutiny and complex reporting requirements. Hence due care need to be taken to legally compliant. Our outbound services include following:
1. Assistance in obtaining approvals & compliance with various requirements of RBI/ FEMA.
2. Advisory on outbound structuring, i.e. choice of appropriate jurisdiction, structuring of investments, etc.
3. Assistance in regular FEMA compliances as per statutory provisions like filing of form/returns, etc.
4. Advise on tax implications and tax compliances.
It is the vision of a company’s leadership which decides whether the company grows at a pace from its own business activities or chooses to grow more rapidly by considering opportunities through successful mergers, acquisitions and joint ventures. Mergers and acquisitions can provide advantages like increase in market share, additional skills and expertise of new staff and meeting higher capital needs. There are many challenges to be overcome before and after these business transactions are planned.
We at Greenvissage make the deals work by partnering with the companies from the evaluations of the opportunities, finalising the strategy to the successful integration of the business. Our subject experts work in the background for collection of data with respect to the entities, conducting benefit analysis, deciding on the legal stability, accounting aspects, regulatory framework, management capabilities and general culture of the entities whether compatible. At the forefront, our experts guide in negotiations, identifying the tax issues and implications, conducting due diligence at the site, handling any complexities arising in the course of the transaction. Our team is involved at each and every stage of transaction advisory process followed by post-transaction until the client is organised for the final handover.
Our approach is methodological in achieving the desired results within specified time frame. We ensure that everything runs smoothly by collaborating with the client and the involved team members. Transaction advisory is all about addressing the problems before they occur and this is precisely what we do. Our team understands every transaction to be unique which helps them in getting innovative solutions.
Our services include:
Foreign companies need to follow some of the guidelines and procedures in respect to the Companies Act 2013, RBI and others, to register a company in India. With a professional team, Greenvissage helps you with foreign company registration in india by executing all the procedures in quick and easy way.
Known for inexpensive company registration services, Greenvissage helps you with your foreign company registration in a flexible and reliable manner. The company registration process can be completed within few weeks subject to timely submission of documents. We ensure that all the registration process is handled in a professional way to create the desired result.
What is ECB?
External commercial borrowing is a loan obtained by an Indian entity (eligible borrower) from a non-resident entity (eligible lender). Such loan should confirm the parameters such as minimum average maturity, permitted end-use, all-in-cost ceiling etc. The loan should meet all the parameters in totality and not on standalone basis. The ECB has been divided into different frameworks based on the type of borrower, average maturity and currency. This again has impact on its all-in-cost ceiling and end use, which we will see in detail now. ECB is typically governed by the Master Director issued by Reserve Bank of India (RBI) as updated time to time.
Why ECB is important?
Due to lesser cost of funds from external sources ECB is an attractive way of obtaining funds. Indian companies can usually borrow at lower rates from outside India as interest rates are lower there compared to the home country, India.
ECB is just a form of a loan and may not be of equity nature or convertible to equity. Hence, it does not dilute stake in the company and can be done without giving away control because debtors do not enjoy voting rights.
Process for availing ECB:
In order to obtain ECB it is required to first ascertain the following:
Further, the ECB is available under the following route:
Automatic route: under the automatic route the cases are approved by the Authorised Dealer Category-I (AD Category-I) banks.
Approval route: under the approval route, the requests have to be sent to the RBI through the Authorised Dealer bank for examination.
While the regulatory provisions are mostly similar, there are some differences in the form of amount of borrowing, eligibility of borrowers, permissible end-uses, etc.
The following form of ECB can be raised under automatic route:
Foreign Currency Exchangeable Bonds (FCEBs) have to be raised under Approval route only.
Eligible Borrowers
Recognized Lenders
The term foreign equity holder for the purpose of ECB means:
(a) Direct foreign equity holder with minimum 25% direct equity holding by the lender in the borrowing entity,
(b) Indirect equity holder with minimum indirect equity holding of 51%, and
(c) Group company with common overseas parent.
Maximum amount in a financial year
$ECB proposals beyond aforesaid limits will come under the approval route
Maturity
All in cost ceiling (Interest and other processing charges for availing ECB)
| Average Maturity Period | All-in-cost Ceilings over 6 month LIBOR* |
| Three years and up to five years | 350 basis points per annum |
| More than five years | 450 basis points per annum |
| 1 year of ECB upto USD 50 million or its equivalent for companies in manufacturing sector only | 450 basis points per annum |
*or applicable bench mark for the respective currency
For ECB’s denominated in INR the all-in-cost should be in line with the market conditions. But there is no clarity on the term ‘market conditions‘ hence one can follow above mentioned conditions as all-in-cost ceiling.
End Use
For eligible (as we are) entities, the ECB proceeds can be used for all purposes excluding the following:
ECB is also allowed for general corporate purpose (working capital) (including working capital) provided the ECB is raised from the direct / indirect equity holder or from a group company for a minimum average maturity of 5 years and no pre-payment.
In case the ECB is raised from direct equity holder, aforesaid individual ECB limits will also subject to ECB liability: equity ratio requirement. The ECB liability of the borrower (including all outstanding ECBs and the proposed one) towards the foreign equity holder should not be more than seven times of the equity contributed by the latter. This ratio will not be applicable if total of all ECBs raised by an entity is up to USD 5 million or equivalent.
We identify your standard recurring expenses and forecast and budget for it in your expense projection.
While making relevant provisions for it on an annual / monthly basis, we also help you design and frame policies that seek to improve efficiencies within your business unit.
We set in motion a proactive follow-and-update process on accruing regulatory changes that saves you the ordeal of chasing us.
Our deep insight enables us to visualise issues or challenges and give you sufficient buffer time to act on it.
Along with our accounting services we also closely co-ordinate with several agencies such as bankers, auditors, insurers, lawyers, directors etc.
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