key issues and considerations when moving an Indian company's holding structure overseas

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Inversion
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Files & media

Corporate Structure Changes

  • Analyze implications for setting up new parent holding entity overseas
  • Appropriate jurisdiction choice from tax perspective
  • Related costs for restructuring exercise

Capital Flow Considerations

  • Examine foreign exchange management rules for outbound investments from India
  • Any sectoral caps under automatic/approval route
  • Plan fund flows, reporting needs under Liberalized Remittance Scheme

Tax Implications

  • Potential capital gains tax arising for shareholders
  • Indirect transfer provisions under Income Tax Act
  • Availability of foreign tax credits

Regulatory Obligations

  • Requirement for RBI approval if NRI/PIO/OCI investors involved
  • Intimations needed to ROC, ED, RBI for implementing the structure

Shareholder Requirements

  • Shareholder approval needed as per Companies Act 2013
  • Management of minority shareholders during restructure
  • Coordinate share transfers through overseas entity setups

Future Flexibility

  • Retain room for attracting foreign investors later
  • Scale oversight needs if global investor entry happens
  • Geography neutral structure without biases