Maier and Vidorno

Managing finances in India – What all should you consider

Client Speak
LI Ping HR Director / BHS Corrugated Machinery(Shanghai) Co.Ltd

Strong support in recruitment
M+V is very professional in India HR market. They were able to provide us with strong support in our recruitment. We are satisfied with their service.

Falk Tzchichholz Sales Manager Export / Kjellberg Vertrieb GmbH

Incubation solution
With the incubation solution from Maier + Vidorno , we successfully placed our products in the Indian market and established valuable product market presence, which we can now build on further with our subsidiary

Andreas Dauerbock Quality Assurance / Voestalpine Grobblech GmbH

BIS registration project
The BIS registration project went smooth and efficient. We are very satisfied with the way the documentation, communication and inspection on-site was handled from the Maier+ Vidorno Team. We are happy to recommend working with M+V in India – with the expert’s advice you will need.

Rajesh Nath Managing Director / VDMA India Services Pvt Ltd German Engineering Association

Competent Partner
India has great investment potential for foreign companies if you manage the highly complex business environment professionally. Our experience shows – Maier+Vidorno is a competent partner to efficiently set up and run business.

Bjoern Becker Export Sales / Jumo GmbH & Co KG

Market Presence and Profitability
The cooperation of JUMO and Maier+Vidorno is a success story in India since 2008. Our sales, market presence and profitability in India shows constant growth. M+V knows about the challenges foreign companies face while doing business in India – and provides hands-on solutions.

Rene Pluss CFO, Member of the Board / Regent Beleuchtungskorper AG

Business Diagnostic and Implement Improvement
Maier+Vidorno understands business challenges in the Indian business environment and provides solutions with the help of its experts. M+V has experience in running business diagnostics and implement improvement and expansion strategies in various industries in India.

    Managing finances in India - What all should you consider

    The scope of managing finances in India is very wide. The session aims to briefly touch on important aspects of what are the various options available to a foreign company to raise money for their business in India.

    Managing finances falls broadly into 3 categories:

    •       Taxation
    •       Profit repatriation options, and
    •       Funding

    The discussion started out, to begin with, the kind of taxation system present in India.

    Taxation:

    • Domestic and Foreign companies in India have to pay corporate taxes.

    • However, Tax percentage varies on the basis of the turnover and income range of the businesses

    • Moreover, the concept of transfer pricing applies to all the international transactions done by any two associated enterprises. This is in regards to purchasing and sale of properties, provision of services or lending and borrowing money. All the transactions have to occur at arm’s length prices.

    • India and Europe follow the same methods in regards to calculating Arm’s length prices between transactions.

    • Goods and Services Tax: Indirect tax levied on manufacture, sale, and consumption of goods as well as services at the national level.
    • GST rates vary from 0%-28% on various categories of goods and services.

    • Registered persons are entitled to a credit of input tax charged on supply of goods and services to him subject to certain exceptions.

     

    Profit Repatriation:

    • Dividend option: When a foreign company sets up a wholly-owned subsidiary (WHOS) in India, shareholders receive dividend from Indian company is not taxable. But the WHOS has to pay dividend distribution tax.

    • Buyback of shares: Foreign Company could return the shares that it holds in its Indian subsidiary. Alternatively, in return the Indian company would pay the consideration at a pre-determined price.

    • Royalties: If the Indian company is using a technology patented by the parent foreign company then the Indian company is liable to pay a royalty to the foreign company.

    • Payment for services: If the Indian company is using the resources of the foreign company then the Indian Company is liable to pay service fees for the resources used by the foreign company.

    Funding:

    • Investment through Shares and convertible instruments: Foreign companies can finance their subsidiary in India either through investment in equity shares, convertible preference shares, and convertible debentures subject to amount restrictions.

    • External commercial Borrowing (ECB): Furthermore, a foreign shareholder can fund its Indian subsidiary through debt by raising funds through ECB.

    • By way of Business arrangements: Indian subsidiaries can enter into a service contract with the foreign shareholders and receive income as a part of providing services to such shareholders.

    To conclude with, on 11th November Maier+Vidorno (M+V) organized an insightful session on “Everything you should consider while Managing finances in India”.

    M+V’s Praveen Singhal moderated by Maarten van der Schaaf of India Connected conducted the session.

    Reach out to us, so that we can help you to establish your subsidiary in India.

    ESTABILISH YOUR SUBSIDIARY IN INDIA. GET IN TOUCH WITH US