( vii) Foreign airline / shipping company Set-up Process
Set-up of a BO requires a prior permission from the RBI which will closely examine the proposed activities to be carried out in India. Subsequently, one is required to obtain a certificate of establishing a place of business in India from the ROC.
Compliance
BO may remit the surplus revenue from the project subject to payment of applicable taxes in India. BO is considered an extension of the foreign company and taxed at 40 per cent( plus surcharge and cess). Besides, it is required to meet compliance requirements viz. Income tax, tax withholding, audit, etc.
Closure
To close a BO and to repatriate balance funds, an application is to be submitted with the Authorised Dealer Bank. The application is to be accompanied with a tax clearance certificate from the Income tax authorities which are issued only once the entire verification process, namely assessments, is completed.
3.3 Foreign Institutional Investors( FIIs)
FIIs is a term commonly used in India to refer to outside companies investing in the financial markets of India. FIIs include institutions such as pension funds, mutual funds, investment trusts, asset management companies or their power of attorney holders( providing discretionary and non-discretionary portfolio management services). The FIIs are invited to invest in all the securities traded in the primary and secondary markets, including the equity and other instruments of companies which are listed or are to be listed on the stock exchanges in India.
The FIIs are required to register with SEBI, which shall, while granting registration to the FII, take into account the track record of the FII, its professional competence, financial soundness, experience, etc. FIIs seeking registration with the SEBI should hold a registration from the securities commission or the regulatory organisation for the stock market in its own country of domicile. SEBI’ s registration and RBI’ s general permission to an FII will be for five years, renewable for further five year periods later on.
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