Presentation is loading. Please wait.

Presentation is loading. Please wait.

Foreign Holding Structures for Indian Outbound Investments Brussels, 2 September 2008.

Similar presentations


Presentation on theme: "Foreign Holding Structures for Indian Outbound Investments Brussels, 2 September 2008."— Presentation transcript:

1 Foreign Holding Structures for Indian Outbound Investments Brussels, 2 September 2008

2 Indian Group with Foreign Subs Indian Parent Company Europe AsiaNorth America

3 Foreign Holding Company Objectives are: Tax efficient repatriation of profits Obtaining treaty benefits (e.g. royalties) Indian deferral planning Tax efficient financing of foreign operations Protection under Bilateral Investment Treaties Organizational and business reasons Regulatory reasons

4 Foreign Holding Company Example #1 Indian Parent Company NL Group Companies EU Group Companies US Group Companies Singapore Holding Company Dutch Holding Company

5 Foreign Holding Company Example #2 Indian Parent Company Luxembourg Holding Company EU Group Companies Asian Group Companies Mauritius Holding Company Singapore Holding Company

6 Ideal Holding Regime (1) No taxes on dividend income and capital gains Losses on participations deductible Financing expenses deductible No thin capitalization rules No withholding tax on dividends paid to holding company No withholding tax on repatriation of profits No capital tax/stamp duties

7 Ideal Holding Regime (2) No CFC rules No subject-to-tax requirements No holding period No non-resident taxation exposure Politically stable, no exchange controls or foreign ownership restrictions, good infrastructure Excellent international reputation The preferred system is simple, predictable, reliable and has a long lifetime expectancy

8 No Tax on Dividends DWHT in the source state Non-resident taxation in the source state Taxation in the jurisdiction of the holding company DWHT on distributions by the holding company

9 No Tax on Capital Gains Sale of shares in a subsidiary: Separate capital gains tax in sources state Non-resident taxation in the source state Taxation in the jurisdiction of the holding company Sale of shares in the holding company: Non-resident taxation in the source state Taxation in the jurisdiction of the shareholder

10 Financing Expenses Deductible Thin Capitalisation or Earning Stripping Rules Other Limitations

11 No CFC Rules CFC Rules (Anti) Passive Investment Rules

12 Ruling System Which jurisdictions offer protection to (potential) investors through the issuance of advance clearance?

13 No WHT on Interest and Royalties Under domestic law Reduced by Tax Treaties Through European Directives Opportunities for group financing activities and group licensing activities

14 Comparison Holding Regimes    No taxes on dividends / capital gains       No subject to tax requirement       No exclusion of passive income        Losses on participations deductible        Financing expenses deductible        No holding period        No WHT on dividends paid        No capital tax/stamp duties        No CFC rules        Ruling system        No WHT on interest and royalties        No non-resident taxation rules NLSINMAUCYPUK LUX BEL

15 Possible Dutch Legal Entities Public Limited Company (naamloze vennootschap) –Bearer shares or registered shares –Minimum capital EUR 45,000 –No mandatory transfer restrictions –Mainly used for listed companies or regulated companies Private Limited Company (besloten vennootschap) –Only registered shares –Minimum capital EUR 18,000 –Mandatory transfer restrictions Cooperation (coöperatie) –Special form of an association –No share capital, but membership rights –At least two members

16 Some Legal Considerations Incorporation by notarial deed Necessity statement of no objection (timing!) Necessity information on ultimate beneficial owners Contribution in kind to be evidenced by confirmation accountant Contribution in cash to be confirmed by bank statement Pre incorporation liabilities Appointment of/representation by management board Timely disclosure of annual accounts (Interim) dividend distributions No foreign exchange controls No securities and credit supervisions for non listed companies

17 Dutch Flex BV: Towards a More Competitive Legal Form Expected implementation: 2009 Main Objectives: – Decrease of mandatory law elements – Increase flexibility – Abolish or replace ineffective rules – Reduce legal uncertainties – Facilitate needs of national and international legal community

18 INTRODUCED minimum capital € 0,01 no bank statement or accountant statement required at incorporation or for contributions reduction convocation time GMS electronic convocation GMS non-voting shares ABOLISHED: mandatory share transfer restrictions freely distributable reserve test financial assistance prohibition number of votes linked to nominal value shareholder resolutions outside meeting to require unanimity Dutch Flex BV: Towards a More Competitive Legal Form


Download ppt "Foreign Holding Structures for Indian Outbound Investments Brussels, 2 September 2008."

Similar presentations


Ads by Google