Trade Credit is a very popular term in daily business transactions. Trade Credit is a source of short-term financing wherein the Supplier provides an agreed credit period to the buyer to make payment for the supply of goods or services without any interest.
Foreign Exchange Management Act (FEMA) on this transaction since a Non-resident Indian is involved in transactions and remittance money is repatriated outside India. But what about the applicability of Income tax provisions on these transactions.
Foreign investors are more inclined toward options where they have complete control over the entity and also such entities can enjoy benefits as domestic companies. FOCC has become a wonderful source of investment for such investors. FOCC can conduct business in India as a domestic company.
However, the need to buy property outside India keeps on arising in various situations like a resident Individual settling outside India, an Investment opportunity outside India, a business entity needs to set up business outside India, and many others.
Whenever a Foreign National wishes to reside long-term in India, typically a stay that exceeds more than 180 days, one of their key responsibilities is to visit the Foreign Regional Registration Office (FRRO) within the first 14 days of arrival in the territory of India.
A rights issue is distinguished by the fact that it is limited to the company’s current shareholders. It could be a public firm that is listed or unlisted. If the Offer allows it, the shareholders can relinquish their rights in favor of other shareholders.
The RBI has introduced a Single Master Form (“SMF”) to integrate the reporting structure of various types of Foreign Investment in India.
An authorised person under FEMA is an authorised dealer, money changer, off-shore banking unit, or any other person for the time being authorised under sub-section (1) of Section 10 of the Act to deal in foreign exchange or foreign securities. There are mainly 4 categories of authorised persons under FEMA and for an individual to become an authorised person one has to submit the necessary applications along with all the relevant required documents to the Reserve Bank of India.
The Reserve Bank of India, on 5th January 2021 introduced a legal entity identifier (LEI) for the transactions of and above 50 crores or INR 500 million through entities (non-individuals) utilizing Reserve Bank-run Centralised Payment Systems i.e. RTGS (Real-time Gross Settlement) and NEFT (National Electronic Funds Transfer).
Hon’ble Supreme court, in the case of the Bar Council of India vs A.K. Balaji & Ors. vide intermine order, has directed RBI not to grant any permission to any foreign law firm for opening of Liaison Office (LO) in India after date of issuance of such order. Hence, RBI issued directions vide Notification No. RBI/2015-16/215 dated 29th October, 2015 that no foreign law firm shall be permitted to open any LO in India till further orders/notification in this regard.
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