ESDM & FDI QUERIES |
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9 . Permanent establishment ( PE ) |
LO ' s generally do not constitute PE under DTAA due to limited scope of actvities in India . However , if the activities of the LO go beyond the realm of preparatory or auxiliary character as provided for in the DTAA , a PE / taxable presence is likely to be constituted |
Generally constituting a PE and a taxable presence under DTAA and domestic IT proisions |
An independent taxable entity and not a PE of the foreign company |
An independent taxable entity ; however , whether interest in LLP results in PE for a foreign partner , is still an ambiguous position under LLP |
10 . Repatriation of funds on ongoing basis
Typically the LO is not permitted to undertake any business activity in India ; as such , there may not be any repatriations from the LO . However , in case of closure of the LO , any surplus money may be repatriated with RBI approval
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Approval not required for remittance of post-tax profits to the HO outside India , subject to filing of requisite documents to the RBI |
Subsidiary does not require any approval for remittance of post-tax profits ; dividends declared will be subject of distribution tax |
LLP does not rquire any approval for remittance of post tax profits |
11 . |
Exit mechanism |
Prioir approval of RBI , |
Prioir approval of RBI , |
ROC and income tax |
ROC and income tax |
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authorities |
authorities |
Q . 23 What are the different steps for starting a manufacturing unit ? |
Approvals / Registration / Filing information for setting up a |
Setting up a company or any other form of business : The |
project |
business structure can be a company , a branch office in an |
Preparing the detailed project report and getting an approval |
SEZ , or the LLP . The details about each form are given in |
from the concerned state government department . |
Section I and Section II . |
Letter of Intent ( LOI ) |
Industries where licensing is required |
Secretariat for Industrial Assistance , |
Ministry of Commerce and Industry , |
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Government of India , New Delhi |