Tag: Foreign Investment
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Foreign Investments into India: Tax Structuring
[Posted by Umakanth Varottil] Foreign investors invest funds into Indian companies in anticipation of financial returns. These returns usually take the form of dividend payment by the Indian companies, interest payment (in case of debt securities that are yet to be converted into equity) and capital gains on sale of investment. Although all three types…
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FCEB Taxation
[Posted by Umakanth Varottil] In an earlier post on this blog, we analysed foreign currency convertible bonds (FCEBs). Although there was nothing on this count in the Finance Minister’s budget speech, the Finance Bill contains provisions clarifying the taxation position on FCEBs and the shares that arise out of conversion. Today’s Hindu Business Line carries…
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Analysing Foreign Currency Exchangeable Bonds (FCEBs)
[Posted by Umakanth Varottil] When it came to borrowings in foreign currency, Indian companies hitherto had two options, namely (i) external commercial borrowings (ECBs) where they borrow monies in foreign currency, or (ii) foreign currency convertible bonds (FCCBs) where they issue bonds denominated in foreign currency that are convertible into shares of the issuer company.…
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Indian Sovereign Wealth Fund: Now a Possibility
[Posted by Umakanth Varottil] Sovereign wealth funds (SWFs) have become the flavour of the day. Not only are the SWFs of various countries investing billions of dollars in companies around the world, they are generating a significant amount of skepticism from regulators in host countries urging greater transparency.As far as India is concerned, initial indications…
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Review of FDI Policy
[Posted by Umakanth Varottil] The Union Cabinet has approved changes to the Foreign Direct Investment (FDI) Policy, and increased avenues and limits for foreign investment in certain sectors. These are: – construction development projects– civil aviation– petroleum & natural gas– commodity exchanges– credit information companies– mining– industrial parks. For details, see reports in Business Standard…
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Indo-Mauritius Tax Treaty: Benefits to Stay
[Posted by Umakanth Varottil] Indications are that the Double Taxation Avoidance Treaty between India and Mauritius will stay despite pressure from the Indian tax authorities. In fact, the Treaty may be strengthened to withstand repeated scrutiny from the Indian tax authorities. The Economic Times reports: “The controversial double tax avoidance treaty between India and Mauritius…
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Will We Witness an Indian Sovereign Wealth Fund?
[Posted by Umakanth Varottil] Sovereign Wealth Funds (SWFs) have become the flavour of the day. The business press regularly reports investments (usually running into several billions of dollars) by the sovereign wealth fund of one or the other country into companies of located in yet another country. Several US financial companies embattled by the subprime…
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Miscellaneous: Bangladesh Investments, IDRs, Goa SEZs
[Posted by Umakanth Varottil] 1. Investments from Bangladesh eased The Economic Times reports that Bangladeshi investors are now allowed to Indian companies, albeit with the approval of the Foreign Investment Promotion Board (and not under the automatic route). This removes a previous embargo on such investments. The report states: “India has opened its door for…