I am looking to invest around 25% in a new private limited company being incorporated in India via my wholly owned Australian company (Pty Ltd). Can you tell me what the procedure is?

Published on: Jan 27, 2011, Last updated on: Jan 27, 2011

Categories: Investment Instruments, Direct Investment, Functional Areas, Doing Business in India, Source: Knowledge Partner

Answered by: Peeyush Aggarwal & Co. Consultants Private Limited

You will invest in Indian Company under Foreign Direct Investment Scheme. It does not make any difference whether you make investment in your name or in the name of your Australian Company. In both the cases, you can be the director of the company.

In India, company can declare dividend after payment of dividend distribution tax. The taxes paid here can be taken as credit in Australia. You should discuss it with your chartered accountant that whether you would be able to take credit of this dividend distribution tax paid by the Indian company. If it can be taken in both the cases i.e. as investor in your own name or in the name of your company then for tax planning purpose, it would be better you invest in the name of your Australian company.

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