( 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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