Premlata Purohit and AssociatesLoading…
Pillar 05
Foreign exchange management, foreign contribution and cross border tax structuring for Indian businesses, foreign investors, non resident Indians and not for profit organisations. The firm advises on the Foreign Exchange Management Act, 1999, the regulations issued by the Reserve Bank of India and the Foreign Contribution (Regulation) Act, 2010, alongside the corresponding tax provisions in the Income Tax Act.
What this pillar covers
Cross border work sits at the intersection of FEMA, the Income Tax Act, the Companies Act and bank reporting requirements. The firm runs this pillar with awareness that a single transaction may trigger reporting under multiple regimes, that the timelines under each are different, and that the rupee value movement between transaction date and reporting date can change the form of the-filing. Engagements are scoped to identify every applicable reporting obligation at the outset.
Sub services
01
Advisory on the eligibility, conditions and reporting obligations under the Foreign Exchange Management Act, 1999 and the regulations and master directions issued by the Reserve Bank of India. The firm advises on capital account transactions including investments, loans, guarantees and immovable property; on current account transactions including remittances and trade transactions; and on the application of the Liberalised Remittance Scheme to resident individuals.
02
Foreign Direct Investment structuring for inbound investors, including sectoral cap analysis under the FDI Policy, automatic route versus government approval route determination, pricing guidelines under the FEM (Non Debt Instruments) Rules, 2019, and reporting in Form FCGPR within thirty days of allotment and Form FCTRS for transfer between residents and non residents. The firm coordinates with authorised dealer banks to ensure that the unique identification number is generated and the-filings are accepted.
03
Overseas Direct Investment for Indian residents and Indian entities under the Foreign Exchange Management (Overseas Investment) Rules, 2022. The engagement covers the choice between the automatic and approval routes, financial commitment limits, the Form ODI Part I filing at the time of investment, the Annual Performance Report under Part II, and the disinvestment reporting under Part III.
04
Annual filing of the Foreign Liabilities and Assets return by every Indian entity that has received FDI or made ODI in the preceding financial year, due by 15 July of every year. The firm prepares the return based on audited financial data, files through the FLAIR portal, and tracks acknowledgments.
05
Advisory on ECB eligibility, end use restrictions, all in cost ceiling, automatic and approval routes under the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018. Drafting and submission of Form ECB at the time of borrowing, monthly returns in Form ECB 2 through the authorised dealer, and closure reporting on full repayment.
06
Setup of liaison offices, branch offices and project offices in India by foreign entities, under the FEM (Establishment of Branch Office, Liaison Office or Project Office or Any Other Place of Business in India) Regulations, 2016. Coordination with the authorised dealer for Reserve Bank of India approval where applicable. Annual filings including the Annual Activity Certificate and audit of the local accounts.
07
Registration under the Foreign Contribution (Regulation) Act, 2010 for trusts, societies and Section 8 companies receiving foreign contribution. Prior permission applications where ongoing FCRA registration is not in place. Annual return filing in Form FC 4 within nine months of the close of the financial year. Renewal of FCRA registration every five years. Compliance with the SBI New Delhi Main Branch (Sansad Marg) designated bank account requirement.
08
Income tax return filing for non resident Indians, residency determination under Section 6 read with the relevant DTAA, taxation of capital gains on Indian assets, taxation of rental income from Indian property, and repatriation of funds through the NRO to NRE route within the annual one million US dollar limit through the prescribed Form 15CA and 15CB process.
09
Advisory on the application of Double Taxation Avoidance Agreements between India and the relevant treaty partner, including the determination of treaty residency, the scope of permanent establishment, the taxation of business profits, dividends, interest, royalties and fees for technical services, and the foreign tax credit mechanism under Rule 128 of the Income Tax Rules.
10
Structuring of holding entities, exit planning and inter group financing for groups with Indian operations and foreign affiliates. The firm advises on the choice of holding jurisdiction, the implications of the General Anti Avoidance Rule under Sections 95 to 102 of the Income Tax Act, the Place of Effective Management test under Section 6(3), and the substantive presence requirements under the Multilateral Instrument.
Our approach
For every cross border mandate, the first step is to map the transaction against every regulatory regime that may apply: FEMA, the Income Tax Act, the Companies Act, FCRA where applicable, and the bank reporting framework.
Where the transaction is yet to be executed, the firm advises on the structure, the choice of route, the documentation and the reporting calendar before execution. Pre transaction advisory is often where the engagement adds the most value.
At the time of execution, the firm coordinates with the authorised dealer bank, drafts the prescribed forms, and ensures that timelines are met. Pricing certificates and valuations are arranged where required.
Post execution reporting to the Reserve Bank of India through the FIRMS portal, ODI portal, FLAIR portal and other applicable systems is filed within the statutory timeline. Acknowledgments are tracked.
For ongoing mandates, the firm tracks the FLA return, the ODI Annual Performance Report, FCRA annual return and any other recurring reporting on the firm's compliance calendar.
Where the matter requires a Chartered Accountant's certificate, the certification is issued after substantive review of the underlying facts.
Frequently asked questions
Inbound or outbound investment, FCRA, NRI tax, DTAA application or specific structuring, the firm is reachable through the office or via the contact form.