EFS Consultants (India) Pvt. Ltd. (EFS) Foreign Direct Investments FDI in India April 20 by Julie Rosenthal © EFS Consulta...
The 4 criteria for Holding Companies <ul><li>Withholding Taxes on Incoming Dividends </li></ul><ul><li>Corporate Income Ta...
Withholding Taxes on Incoming Dividends <ul><li>Incoming dividends remitted by the subsidiary to the holding company must ...
Corporate Income Tax on Dividend Income Received   <ul><li>Dividend income received by the holding company from the subsid...
Capital Gains on the Sale of Shares   <ul><li>Profits realized by the holding company on the sale of shares in the subsidi...
Withholding Taxes on Outgoing Dividends   <ul><li>Outgoing dividends paid by the holding company to the ultimate parent co...
The 4 Key Jurisdictions For India <ul><li>Cyprus </li></ul><ul><li>Malta </li></ul><ul><li>Mauritius </li></ul><ul><li>Sin...
Cyprus at a glance <ul><li>10% Corporation Tax with eligibility for lower rates under certain circumstances </li></ul><ul>...
Singapore © EFS Consultants (India) Pvt. Ltd. www.efs-consultants.com
Singapore at a Glance Singapore consistently ranks as one of the top most competitive and profitable places for business. ...
Foreign Direct Investment (FDI) <ul><li>Foreign Direct Investments are usually directed by Bilateral Investment Treaties (...
Flexible Holding Structure for Company with Indian interest © EFS Consultants (India) Pvt. Ltd. www.efs-consultants.com Ma...
An active typical foreign investment structure Shareholding structure Royalty  structure © EFS Consultants (India) Pvt. Lt...
Utilising Double Taxation Treaties to allow us to <ul><li>Avoid withholding tax </li></ul><ul><li>Minimise exchange contro...
India’s Double Taxation Treaties  (Dec 08) ) © EFS Consultants (India) Pvt. Ltd. www.efs-consultants.com Romania  Netherla...
EFS Consultants on FDI India © EFS Consultants (India) Pvt. Ltd. www.efs-consultants.com EFS Consultants Pvt Ltd. Mumbai 7...
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Tax Planning With Double Taxation Treaties

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Tax Planning With Double Taxation Treaties

  1. 1. EFS Consultants (India) Pvt. Ltd. (EFS) Foreign Direct Investments FDI in India April 20 by Julie Rosenthal © EFS Consultants (India) Pvt. Ltd. www.efs-consultants.com
  2. 2. The 4 criteria for Holding Companies <ul><li>Withholding Taxes on Incoming Dividends </li></ul><ul><li>Corporate Income Tax on Dividend Income Received </li></ul><ul><li>Capital Gains on the Sale of Shares </li></ul><ul><li>Withholding Taxes on Outgoing Dividends </li></ul>© EFS Consultants (India) Pvt. Ltd. www.efs-consultants.com
  3. 3. Withholding Taxes on Incoming Dividends <ul><li>Incoming dividends remitted by the subsidiary to the holding company must either be exempted from or subject to low withholding tax rates in the subsidiary jurisdiction. This is usually achieved by having in place a double taxation treaty to which the subsidiary and holding company jurisdictions are parties. </li></ul>© EFS Consultants (India) Pvt. Ltd. www.efs-consultants.com
  4. 4. Corporate Income Tax on Dividend Income Received <ul><li>Dividend income received by the holding company from the subsidiary must either be exempted from or subject to low corporate income tax rates in the holding company jurisdiction. </li></ul>© EFS Consultants (India) Pvt. Ltd. www.efs-consultants.com
  5. 5. Capital Gains on the Sale of Shares <ul><li>Profits realized by the holding company on the sale of shares in the subsidiary must either be exempt from or subject to a low rate of capital gains tax in the holding company jurisdiction. </li></ul>© EFS Consultants (India) Pvt. Ltd. www.efs-consultants.com
  6. 6. Withholding Taxes on Outgoing Dividends <ul><li>Outgoing dividends paid by the holding company to the ultimate parent corporation must either be exempt from or subject to low withholding tax rates in the holding company jurisdiction. </li></ul>© EFS Consultants (India) Pvt. Ltd. www.efs-consultants.com
  7. 7. The 4 Key Jurisdictions For India <ul><li>Cyprus </li></ul><ul><li>Malta </li></ul><ul><li>Mauritius </li></ul><ul><li>Singapore </li></ul>© EFS Consultants (India) Pvt. Ltd. www.efs-consultants.com
  8. 8. Cyprus at a glance <ul><li>10% Corporation Tax with eligibility for lower rates under certain circumstances </li></ul><ul><li>0% withholding tax on interest </li></ul><ul><li>0% withholding tax on incoming dividends </li></ul>© EFS Consultants (India) Pvt. Ltd. www.efs-consultants.com
  9. 9. Singapore © EFS Consultants (India) Pvt. Ltd. www.efs-consultants.com
  10. 10. Singapore at a Glance Singapore consistently ranks as one of the top most competitive and profitable places for business. Singapore today is a reputable financial centre, a key regional trading centre, the world's busiest port, and a top location for investments and doing business. Singapore's safe, pro-business environment is supported by a well-respected government with transparent and consistent policies that protect companies' physical and IP investments © EFS Consultants (India) Pvt. Ltd. www.efs-consultants.com
  11. 11. Foreign Direct Investment (FDI) <ul><li>Foreign Direct Investments are usually directed by Bilateral Investment Treaties (BIT). BITs are agreements establishing the terms and conditions for private investment by nationals and companies of one state in the state of the other. This type of investment is called Foreign Direct Investments (FDI). </li></ul>© EFS Consultants (India) Pvt. Ltd. www.efs-consultants.com
  12. 12. Flexible Holding Structure for Company with Indian interest © EFS Consultants (India) Pvt. Ltd. www.efs-consultants.com Malta Holding Private Property Holding Holiday Home Thailand Trading Company EU Commercial Property Holding General Trading Company India
  13. 13. An active typical foreign investment structure Shareholding structure Royalty structure © EFS Consultants (India) Pvt. Ltd. www.efs-consultants.com Holding Company (Isle of Man) Trading Co Russia (Netherlands) Trading Co Turkey (Netherlands) Trading Co Phillipines (Netherlands) Trading Co Singapore (Netherlands) Trading Co India (Netherlands) Trading Co Malaysia (Netherlands) Joint Venture (India) Joint Venture (Malaysia) Joint Venture (Turkey) Joint Venture (Russia) Joint Venture (Philippines) Joint Venture (Singapore) Holding Company (Malta) Holding Company (Netherlands) Holding Company (Mauritius)
  14. 14. Utilising Double Taxation Treaties to allow us to <ul><li>Avoid withholding tax </li></ul><ul><li>Minimise exchange control </li></ul><ul><li>Expand abroad </li></ul><ul><li>Brand or IP acquisition abroad </li></ul><ul><li>Build new markets </li></ul><ul><li>Implement Privacy and Confidentiality </li></ul>© EFS Consultants (India) Pvt. Ltd. www.efs-consultants.com
  15. 15. India’s Double Taxation Treaties (Dec 08) ) © EFS Consultants (India) Pvt. Ltd. www.efs-consultants.com Romania Netherlands Nepal Namibia Morocco Mongolia Mauritius Malta Malaysia Libya Kyrgz Rep. Korea (South) Kenya Kazakhstan Jordan Japan Ireland Italy Israel Indonesia Hungary Greece Germany France Finland Egypt Denmark Czech Republic Cyprus China Canada Bulgaria Brazil Belgium Belarus Bangladesh Austria Australia Armenia   Zambia Vietnam Uzbekistan USA Ukraine UK United Arab Republic U.A.E. Uganda Turkmenistan Turkey Trinidad and Tobago Thailand Tanzania Syria Switzerland Sweden Sudan Sri Lanka Slovenia Spain South Africa Singapore Saudi Arabia Russia Qatar Portugal Poland Philippines Oman Norway New Zealand
  16. 16. EFS Consultants on FDI India © EFS Consultants (India) Pvt. Ltd. www.efs-consultants.com EFS Consultants Pvt Ltd. Mumbai 723 Midas, Sahar Plaza Kurla Andheri Road Andheri East Mumbai – 400059 India Tel: +91 22 30727610 www.efs-consultants.com EFS Consultants Shanghai Unit 615, No.709 Central Tibet Road MeiXin Plaza Shanghai 200001 China Email: [email_address] EFS Consultants Ltd London 150 152 Fenchurch Street London EC3M 6BB United Kingdom Tel: +44 207 2207363 Fax: +44 870 4865532 www.efs-consultants.com

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