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Casual Articles - Destination India - A Legal Synopsis
A series of articles exploring the seven critical areas that can indicate a partnership is in trouble.The 5th C: Control IssuesWhen control is in the picture it is a lose/lose proposition.First, it is an illusion that anyone can control a person or a situation. The need to control is born of fear, lack of trust and insecurity. A person who feels it is necessary to control is robbed of a sense of well being. In business, control or the attempt to control can occur in many venues.The attempt to control can go on at the top between partners or anywhere else in the organization where two or more people work together. It may be between a group of managers, or between a CEO and direct report. It can be a manager and the team for whom he or she is responsible. It might be an owner CEO and stock holders, or a member of the board of directors. Family members such as siblings often attempt to control each other, or a father hands the business to his son, but won't let go of the reins.When someone attempts to control, they expend enormous mental and emotional energy to hold things within boundaries. Controlling behavior is constrictive and confining. It takes its toll on one's ability to function in a healthy, stress free and creative manner.In business where the desirable goals are growth, expansion and creativity, this constricting behavior imposes the loss of these elements and seriously affects the bottom line. Here are some ways in which this loss is manifested:7 WAYS CONTROLLING BEHAVIOR EFFECTS THE BOTTOM LINEUnhappy, controlled employees do not work to capacity.Unhappiness breeds stress, illness and costs in sick leave and lack of productivity.Increased turnover is costly. Often businesses do not calculate the enormous costs around turnover such as costs for advertising, loss of the revenue until a new person is hired, trained and moved up to the level of the prior person, as well as a compensation package. There are higher taxes for Workman's Compensation when a business has employees leaving.Loss of clients who liked that person may leave.Projects that were left unfinished
3.4 Incorporation, Registrations and Licenses
Incorporation of a company in India is an administrative process which takes approximately 15 to 20 working days from filing of incorporation related documents. A company incorporated anywhere in India is entitled to carry on business activities throughout India.
In addition, an Indian company would require to obtain various sector and location specific licenses and registrations, including registrations and licenses under the direct and indirect taxes, import-export regulations, labour laws and trade and municipal regulations. These license and registrations can ordinarily be obtain within three weeks of filing the requisite documents.
4. TAXES AND TAX BENEFITS
4.1 Tax Structure
India has a multi tier tax system comprised of direct and indirect taxes. The main taxes are income tax, sales tax, excise (levied on manufacturing/value addition), service tax (levied on provision of specified services), customs duty, octroi (on entry of goods in certain areas), stamp duty (on execution of specified documents) and property taxes.
The income tax applicable to Indian companies is 35% plus surcharge and cess (proposed to be reduced to 30% plus surcharge and cess by the Union Budget 2005-06). No minimum corporate income tax is payable by Indian companies in absence of profits. Gene
More and more people are realizing that they can't rely on big business or government to secure their financial future. They choose instead to take personal responsibility for their future by purchasing or setting up a small or homebased business. They bring their passion and their personal area of expertise to the venture. Regrettably, many try to 'go it alone' with disastrous results.There is one thing that is common to virtually all 'Big' business. In fact, I will suggest that it is critical to getting 'big', plus it's even critical to a venture's very survival, especially longterm. 'Big' Business employs experts. The President and the Chairman of the Board have the good sense and the humility to realize that they don't know everything. The small business or home business person must understand that as well.While you may not have the assets to hire the 'expertise power' of the largest corporations, you can do more than you might realize. You do not need to have these experts all on staff to obtain the expertise they possess. You do, however, need access to the expertise at your finger tips. The following are the areas that I am referring to. Regardless of the size of your business, you will need the following expertise if you plan to survive and prosper in the business community.Legal Expertise: Every business needs access to solid legal advice. For instance, if you plan a partnership, even within a family business, it makes good sense to have a partnership agreement. We live in a litigious society. Make sure you establish a relationship with a legal expert before venturing into any business.Accounting Expertise: It's amazing how many folks, especially in homebased businesses, do not have an accountant or fail to keep proper records. You are courting disaster if you try to operate outside the tax laws for your jurisdiction. You also will never know where you stand financially with your business without proper bookkeeping.Insurance/Risk Management Expertise: This too is an area of neglect for many small entrepreneurs. If something happens to the key people i
India, the world’s largest democracy, is today one of the most favoured destinations of foreign investors and businesses for various reasons including a rapidly growing economy, educated and skilled workforce, huge market size, increasing purchasing power, low costs and political stability.
This Synopsis provides a bird’s eye view of the Indian legal framework as applicable to foreign investors and collaborators. The purpose of this Synopsis is to provide a brief idea of the overall Indian legal and regulatory framework, the process of establishment of business in India and the crucial issues involved.
2. ENTRY STRATEGY
2.1 Legal Entity
A foreign entity may establish a business presence in India through a liaison office, branch office, project office, wholly owned subsidiary company or joint venture.
A liaison office can be established to primarily explore and understand the business opportunities and climate in India for the foreign parent entity. A liaison office is not permitted to carry on commercial activities in India.
A branch office can carry on the business activities while a project office can be established to execute a specific project. However, since a branch office or a project office would not be considered a legal entity separate from its parent company, the business income generated by them would be taxable at the rate of tax applicable to the foreign companies (40% plus surcharge and cess) which is higher than the rate of tax applicable to companies incorporated in India (35% plus surcharge and cess; proposed to be reduced to 30% plus surcharge and cess by the Union Budget 2005-06).
In view of restrictions on the activities and tax implications for liaison, branch and project offices, establishment of a wholly owned subsidiary, or strategic alliances through joint ventures or technical collaborations with existing Indian companies by and large remain the preferred options for foreign entities to establish a long term presence in India.
2.2 Options for Collaboration
In addition to the option of establishing a wholly owned subsidiary, a foreign entity may enter into following kinds of collaborations with existing Indian companies for its presence in India:
a. Financial Collaboration: Joint Ventures, by investment in the shares or convertible debentures (“securities”) of the Indian company together with Indian partner; b. Technical Collaboration: By licensing technology or patents to the Indian partner; and c. Trademark/Brand Name License: To the Indian partner with/without technical collaboration.
In addition, a foreign entity can import– export goods and services to and from India and appoint distributors for its products in India with or without trademark license. It would, however, be preferable to appoint these distributors on a principal to principal basis to avoid the possibility of taxability of the foreign entity in India.
3. REGULATORY PERMISSIONS AND COMPLIANCES
The Foreign Investment Promotion Board (“FIPB”) and the Reserve Bank of India (“RBI”) are the nodal government authorities to permit and supervise foreign investments in India. In addition, Ministry of Commerce and Industry and various other ministries and departments of the government prescribe sector specific regulatory compliances and approvals.
3.1 Financial Collaboration
Foreign investment upto 100% of the securities of Indian companies is freely permitted in most of the sectors, except a few sectors where FDI beyond prescribed percentages is not permitted without prior government approval, such as insurance, aviation, banking, telecom, real estate, etc., and a few manufacturing sectors requiring industrial license such as alcoholic drinks, tobacco products, defense equipment, hazardous chemicals etc. (“regulated sectors”). Foreign investment is however prohibited in certain sectors including retail trading, atomic energy, lottery, gambling, etc.
A financial collaboration in these regulated sectors consequently requires presence of an Indian equity partner and/or requisite prior government approvals from the FIPB, the RBI and other applicable ministries.
The securities of an existing unlisted Indian company in unregulated sectors can be transferred from its holders to the foreign investor without prior government approval.
To meet additional financial needs, a foreign collaborator can also provide loans to the Indian company as per the detailed government guidelines issued in this regard prescribing interest rate, average maturity period, end use and prior approval in certain cases.
3.2 Technology Collaboration & Trademark License
Under these arrangements, foreign entities can provide technical know how and/or license their trademarks to Indian companies against payment of fee and royalty.
For use of foreign technology, Indian companies can remit lump sum fee of upto US$ 2 million and royalty upto 5% of domestic sales and 8% of exports to the technology licensor without any prior government approval. Similarly, for use of trademarks and brand name of the foreign collaborator without technology transfer, payment of royalty upto 2% of exports and 1% of domestic sales is allowed without prior government approval. In case of trademark/brand name license together with technology transfer, the payment for technology transfer subsumes the payment of royalty for use of trademark and brand name of the foreign collaborator.
3.3 Post Collaboration Compliances
In regulated as well as free sectors, an Indian company is required to effect certain one time as well as periodic filings with prescribed government regulatory and tax authorities. These filings include intimation of receipt of foreign investment, letters of acceptance, intimation of issue of securities, annual tax, accounts and returns, etc.
In addition, specific industries need to file periodic reports with the administrative ministry and departments, such as quarterly and annual returns by the software technology parks with the Director, STPI.
3.4 Incorporation, Registrations and Licenses
Incorporation of a company in India is an administrative process which takes approximately 15 to 20 working days from filing of incorporation related documents. A company incorporated anywhere in India is entitled to carry on business activities throughout India.
In addition, an Indian company would require to obtain various sector and location specific licenses and registrations, including registrations and licenses under the direct and indirect taxes, import-export regulations, labour laws and trade and municipal regulations. These license and registrations can ordinarily be obtain within three weeks of filing the requisite documents.
4. TAXES AND TAX BENEFITS
4.1 Tax Structure
India has a multi tier tax system comprised of direct and indirect taxes. The main taxes are income tax, sales tax, excise (levied on manufacturing/value addition), service tax (levied on provision of specified services), customs duty, octroi (on entry of goods in certain areas), stamp duty (on execution of specified documents) and property taxes.
The income tax applicable to Indian companies is 35% plus surcharge and cess (proposed to be reduced to 30% plus surcharge and cess by the Union Budget 2005-06). No minimum corporate income tax is payable by Indian companies in absence of profits. Gener
Ponzi schemes are hot and even it’s illegal they always will be hot. if you go to some online forums on how to make money online you will see members posting threads promoting ponzi schemes and even the so called hyips are most of the time a ponzi scheme.No matter what they have told you the creator of a ponzi scheme doesn’t care about your profits. Most people are running ponzi schemes to make some quick bucks from theirself. I’m sure you have already seen high yield investment programmes where they promise you that they are a team of expert traders making five percent daily or even more. And the fact is that some people actually do believe, even the programme has no proven track record, that their money is traded as it should be. If you see some posting on a forum “earn money fast without doing any work” than you could say almost sure he/she must be promoting a ponzi scheme.What exactly is a ponzi schemePonzi schemes or pyramid schemes has nothing to do with investments, business or sales. Simply because they don’t trade your money or they don’t sell you anything. The fact is that a ponzi scheme uses the money of new investors to pay out old investors. Some ponzi schemes are surviving a few weeks and some of them even a few months. But this is for sure they all go die after some time. Why? Because mathematically it’s impossible to find new investors. Or sometimes the legal authorities find out the ponzi scheme and close it.Charles ponzi: The godfather of ponzi schemesCharles Ponzi was not the first who created a ponzi schemes but actually he was one of the first people that created a fraud scheme on such a large base. In 1903 Charles Ponzi emigrated from Italy to the United states. He has worked on a post office and studied at the university of Rome, although studied is not a good word for Charles it was more a vacation.Without almost any money he arrived at the United States and did some jobs there. Four years later he moved to Montreal where he worked in the Banco Zarossi. Zarossi the owner gave a six percent interest on bank accounts. But Ponzi discovered that Zarossi used the money from new client to pay out old cl
In view of restrictions on the activities and tax implications for liaison, branch and project offices, establishment of a wholly owned subsidiary, or strategic alliances through joint ventures or technical collaborations with existing Indian companies by and large remain the preferred options for foreign entities to establish a long term presence in India.
2.2 Options for Collaboration
In addition to the option of establishing a wholly owned subsidiary, a foreign entity may enter into following kinds of collaborations with existing Indian companies for its presence in India:
a. Financial Collaboration: Joint Ventures, by investment in the shares or convertible debentures (“securities”) of the Indian company together with Indian partner; b. Technical Collaboration: By licensing technology or patents to the Indian partner; and c. Trademark/Brand Name License: To the Indian partner with/without technical collaboration.
In addition, a foreign entity can import– export goods and services to and from India and appoint distributors for its products in India with or without trademark license. It would, however, be preferable to appoint these distributors on a principal to principal basis to avoid the possibility of taxability of the foreign entity in India.
3. REGULATORY PERMISSIONS AND COMPLIANCES
The Foreign Investment Promotion Board (“FIPB”) and the Reserve Bank of India (“RBI”) are the nodal government authorities to permit and supervise foreign investments in India. In addition, Ministry of Commerce and Industry and various other ministries and departments of the government prescribe sector specific regulatory compliances and approvals.
3.1 Financial Collaboration
Foreign investment upto 100% of the securities of Indian companies is freely permitted in most of the sectors, except a few sectors where FDI beyond prescribed percentages is not permitted without prior government approval, such as insurance, aviation, banking, telecom, real estate, etc., and a few manufacturing sectors requiring industrial license such as alcoholic drinks, tobacco products, defense equipment, hazardous chemicals etc. (“regulated sectors”). Foreign investment is however prohibited in certain sectors including retail trading, atomic energy, lottery, gambling, etc.
A financial collaboration in these regulated sectors consequently requires presence of an Indian equity partner and/or requisite prior government approvals from the FIPB, the RBI and other applicable ministries.
The securities of an existing unlisted Indian company in unregulated sectors can be transferred from its holders to the foreign investor without prior government approval.
To meet additional financial needs, a foreign collaborator can also provide loans to the Indian company as per the detailed government guidelines issued in this regard prescribing interest rate, average maturity period, end use and prior approval in certain cases.
3.2 Technology Collaboration & Trademark License
Under these arrangements, foreign entities can provide technical know how and/or license their trademarks to Indian companies against payment of fee and royalty.
For use of foreign technology, Indian companies can remit lump sum fee of upto US$ 2 million and royalty upto 5% of domestic sales and 8% of exports to the technology licensor without any prior government approval. Similarly, for use of trademarks and brand name of the foreign collaborator without technology transfer, payment of royalty upto 2% of exports and 1% of domestic sales is allowed without prior government approval. In case of trademark/brand name license together with technology transfer, the payment for technology transfer subsumes the payment of royalty for use of trademark and brand name of the foreign collaborator.
3.3 Post Collaboration Compliances
In regulated as well as free sectors, an Indian company is required to effect certain one time as well as periodic filings with prescribed government regulatory and tax authorities. These filings include intimation of receipt of foreign investment, letters of acceptance, intimation of issue of securities, annual tax, accounts and returns, etc.
In addition, specific industries need to file periodic reports with the administrative ministry and departments, such as quarterly and annual returns by the software technology parks with the Director, STPI.
3.4 Incorporation, Registrations and Licenses
Incorporation of a company in India is an administrative process which takes approximately 15 to 20 working days from filing of incorporation related documents. A company incorporated anywhere in India is entitled to carry on business activities throughout India.
In addition, an Indian company would require to obtain various sector and location specific licenses and registrations, including registrations and licenses under the direct and indirect taxes, import-export regulations, labour laws and trade and municipal regulations. These license and registrations can ordinarily be obtain within three weeks of filing the requisite documents.
4. TAXES AND TAX BENEFITS
4.1 Tax Structure
India has a multi tier tax system comprised of direct and indirect taxes. The main taxes are income tax, sales tax, excise (levied on manufacturing/value addition), service tax (levied on provision of specified services), customs duty, octroi (on entry of goods in certain areas), stamp duty (on execution of specified documents) and property taxes.
The income tax applicable to Indian companies is 35% plus surcharge and cess (proposed to be reduced to 30% plus surcharge and cess by the Union Budget 2005-06). No minimum corporate income tax is payable by Indian companies in absence of profits. Gene
The thought of changing careers will cross everyone’s mind at some point in time. Yet, not many think that they, confidently, can take that step. While there are many reasons that can be attributed to this noticeable phenomenon, we, for the moment, will confine ourselves to the major reason - lack of confidence.Lack Of Confidence - A Major Drawback To Successful Career ChangeIt is not unusual to desire a change in career. However, proper & detailed planning and preparation is essential for a successful change in career. Many times, procrastinating over the matter not just develops the redundancy factor but also creates a sort of fear and hindrance.10 Steps To A Successful Career ChangeHere are the ten steps to changing your career successfully:1. Preparing To Change: Gather information about your target organizations, job profile, etc. Get additional training and certifications as needed. Get your resume done professionally; highlighting areas to which you can contribute to and your past accomplishments.2. Expect The Unexpected: Interviewers throw out surprises, sometimes unintentionally, which can catch you off-guard. It pays to know the questions that they might ask. Anticipate even the craziest questions.3. Consult Those Who Are Already In Your Chosen Field: This gives you a wealth of information on the daily routine, responsibilities and challenges.4. Changing A Line Of Career Isn’t Unusual: The need for cross-discipline skills is no surprise these days. Get across the point that you don’t lack all the skills required by the new job even you haven’t worked in a similar one. Interpersonal skills, organizational, personal skills are commonly required wherever you go.5. Brush Up Old Skills And Add New Ones: Comparing your skill set with that required by the target job will tell you the areas you need to concentrate on.6. Use The Internet: Use Internet job boards to post your resume, which should be carefully crafted specially for this purpose. By crafting, I mean using keywords that are industry-specific jargon.7. Internet Helps Research A New Industry: Visit websites of organizations, forums or association
The Foreign Investment Promotion Board (“FIPB”) and the Reserve Bank of India (“RBI”) are the nodal government authorities to permit and supervise foreign investments in India. In addition, Ministry of Commerce and Industry and various other ministries and departments of the government prescribe sector specific regulatory compliances and approvals.
3.1 Financial Collaboration
Foreign investment upto 100% of the securities of Indian companies is freely permitted in most of the sectors, except a few sectors where FDI beyond prescribed percentages is not permitted without prior government approval, such as insurance, aviation, banking, telecom, real estate, etc., and a few manufacturing sectors requiring industrial license such as alcoholic drinks, tobacco products, defense equipment, hazardous chemicals etc. (“regulated sectors”). Foreign investment is however prohibited in certain sectors including retail trading, atomic energy, lottery, gambling, etc.
A financial collaboration in these regulated sectors consequently requires presence of an Indian equity partner and/or requisite prior government approvals from the FIPB, the RBI and other applicable ministries.
The securities of an existing unlisted Indian company in unregulated sectors can be transferred from its holders to the foreign investor without prior government approval.
To meet additional financial needs, a foreign collaborator can also provide loans to the Indian company as per the detailed government guidelines issued in this regard prescribing interest rate, average maturity period, end use and prior approval in certain cases.
3.2 Technology Collaboration & Trademark License
Under these arrangements, foreign entities can provide technical know how and/or license their trademarks to Indian companies against payment of fee and royalty.
For use of foreign technology, Indian companies can remit lump sum fee of upto US$ 2 million and royalty upto 5% of domestic sales and 8% of exports to the technology licensor without any prior government approval. Similarly, for use of trademarks and brand name of the foreign collaborator without technology transfer, payment of royalty upto 2% of exports and 1% of domestic sales is allowed without prior government approval. In case of trademark/brand name license together with technology transfer, the payment for technology transfer subsumes the payment of royalty for use of trademark and brand name of the foreign collaborator.
3.3 Post Collaboration Compliances
In regulated as well as free sectors, an Indian company is required to effect certain one time as well as periodic filings with prescribed government regulatory and tax authorities. These filings include intimation of receipt of foreign investment, letters of acceptance, intimation of issue of securities, annual tax, accounts and returns, etc.
In addition, specific industries need to file periodic reports with the administrative ministry and departments, such as quarterly and annual returns by the software technology parks with the Director, STPI.
3.4 Incorporation, Registrations and Licenses
Incorporation of a company in India is an administrative process which takes approximately 15 to 20 working days from filing of incorporation related documents. A company incorporated anywhere in India is entitled to carry on business activities throughout India.
In addition, an Indian company would require to obtain various sector and location specific licenses and registrations, including registrations and licenses under the direct and indirect taxes, import-export regulations, labour laws and trade and municipal regulations. These license and registrations can ordinarily be obtain within three weeks of filing the requisite documents.
4. TAXES AND TAX BENEFITS
4.1 Tax Structure
India has a multi tier tax system comprised of direct and indirect taxes. The main taxes are income tax, sales tax, excise (levied on manufacturing/value addition), service tax (levied on provision of specified services), customs duty, octroi (on entry of goods in certain areas), stamp duty (on execution of specified documents) and property taxes.
The income tax applicable to Indian companies is 35% plus surcharge and cess (proposed to be reduced to 30% plus surcharge and cess by the Union Budget 2005-06). No minimum corporate income tax is payable by Indian companies in absence of profits. Gene
Fortunately for anyone who wants to become a solicitor there are quite clear routes to getting a job. Providing you put in the time & effort you should be able to become a solicitor & get a law job.In order to train to become a solicitor there are some unavoidable prerequisites. The simplest path is to gain is a law degree from an accredited university. Once you have completed your degree in law you are perfectly qualified to begin the process of becoming a lawyer.However, often people are unsure of their career intentions when they choose their subject of study at university. This needn’t be a problem though, anyone with a degree should be able to carry out a one year conversion course. This builds on experience you have gained in your current degree but introduces you to all aspects of law & the knowledge you would need to train to become a solicitor.If you don’t have a degree this doesn’t prevent you from becoming a solicitor. Provided you have some extensive legal experience, such as working for a law firm in a non-legal position you may be qualified by experience. The route to becoming a solicitor is slightly different to those taken by graduates but the Institute of Legal Executives provide a combination vocational & comprehensive academic courses to prepare you to become a solicitor.No matter which route you take to get to this stage now everyone is required to take the Legal Practice Course (LPC) which takes one academic year, if you are working full time or two for those studying part-time. Places on the course themselves can be quite competitive at the most highly regarded institutions & universities but you wouldn’t be hugely disadvantaged by taking the course where ever is most convenient.Once you have completed the LPC, aspiring solicitors are required to apply for two year trainee positions at a legal firm or an organisation like the Crown Prosecution Service. Competition for these positions is high, especially at the top law firms. It’s vital to polish your CV & brush up on your interview skills to make the best impression.Though the training courses & exams are finished, during the traineeship you will still have to pass the Pro
3.2 Technology Collaboration & Trademark License
Under these arrangements, foreign entities can provide technical know how and/or license their trademarks to Indian companies against payment of fee and royalty.
For use of foreign technology, Indian companies can remit lump sum fee of upto US$ 2 million and royalty upto 5% of domestic sales and 8% of exports to the technology licensor without any prior government approval. Similarly, for use of trademarks and brand name of the foreign collaborator without technology transfer, payment of royalty upto 2% of exports and 1% of domestic sales is allowed without prior government approval. In case of trademark/brand name license together with technology transfer, the payment for technology transfer subsumes the payment of royalty for use of trademark and brand name of the foreign collaborator.
3.3 Post Collaboration Compliances
In regulated as well as free sectors, an Indian company is required to effect certain one time as well as periodic filings with prescribed government regulatory and tax authorities. These filings include intimation of receipt of foreign investment, letters of acceptance, intimation of issue of securities, annual tax, accounts and returns, etc.
In addition, specific industries need to file periodic reports with the administrative ministry and departments, such as quarterly and annual returns by the software technology parks with the Director, STPI.
3.4 Incorporation, Registrations and Licenses
Incorporation of a company in India is an administrative process which takes approximately 15 to 20 working days from filing of incorporation related documents. A company incorporated anywhere in India is entitled to carry on business activities throughout India.
In addition, an Indian company would require to obtain various sector and location specific licenses and registrations, including registrations and licenses under the direct and indirect taxes, import-export regulations, labour laws and trade and municipal regulations. These license and registrations can ordinarily be obtain within three weeks of filing the requisite documents.
4. TAXES AND TAX BENEFITS
4.1 Tax Structure
India has a multi tier tax system comprised of direct and indirect taxes. The main taxes are income tax, sales tax, excise (levied on manufacturing/value addition), service tax (levied on provision of specified services), customs duty, octroi (on entry of goods in certain areas), stamp duty (on execution of specified documents) and property taxes.
The income tax applicable to Indian companies is 35% plus surcharge and cess (proposed to be reduced to 30% plus surcharge and cess by the Union Budget 2005-06). No minimum corporate income tax is payable by Indian companies in absence of profits. Gene
There is nothing like a dream to create the future. Victor HugoI’ve heard and read many times the “I’m not the selling type personality, I don’t have the character” argument. I thought that of myself actually. I was even so childish to think that yes, I could make great jewels, but I would never sell them or live from it. I was so wrong! I couldn’t see I was expecting for “something to happen” without noticing nothing would happen if I didn’t make it happen myself.Opportunities are not casualty or good luck: opportunities are the result of knowledge and awareness. Every succeeding crafter in this world is not only a skilled master in her/his technique, but also a succesful seller. There are the same chances to succeed for almost everybody; why some do while others don’t?This is very simple: a seller makes sales happen and does not wait for sales to come. When we believe we are not something, we are just stating we believe we cannot be something. It is not a fact but a belief. It can be changed then. Changing your point of view about yourself is the key to become a successful seller.And NO, you don’t have to have a specific type of personality. You don’t have to a cold salesperson, nor start lying or covering any truth, because you already are something: a Jewelry Artist. Isn’t that enough to make you proud of yourself? You have a wonderful profession, you work with your hands in beautiful noble materials, and you make people look more beautiful and magical with your creations. Your work is bought with love as a gift to another, becoming a messenger of affection and generosity. You are probably self-taught and are thinking of starting your own business in a very competitive field, which means you are brave and are prepared to be steady and learn well the foundations of this business/vocation.Sounds admirable, ah? Well, that is YOU! Don’t you see how lucky you are? Having that amazing conditions, it is only a matter of habit to start creating your own opportunities, and only a matter of habit overcoming all your self-inflicted obstacles. So, from now on, let’s say Jewelry Artist instead of seller, and I will show you how it’s only a point of view q
3.4 Incorporation, Registrations and Licenses
Incorporation of a company in India is an administrative process which takes approximately 15 to 20 working days from filing of incorporation related documents. A company incorporated anywhere in India is entitled to carry on business activities throughout India.
In addition, an Indian company would require to obtain various sector and location specific licenses and registrations, including registrations and licenses under the direct and indirect taxes, import-export regulations, labour laws and trade and municipal regulations. These license and registrations can ordinarily be obtain within three weeks of filing the requisite documents.
4. TAXES AND TAX BENEFITS
4.1 Tax Structure
India has a multi tier tax system comprised of direct and indirect taxes. The main taxes are income tax, sales tax, excise (levied on manufacturing/value addition), service tax (levied on provision of specified services), customs duty, octroi (on entry of goods in certain areas), stamp duty (on execution of specified documents) and property taxes.
The income tax applicable to Indian companies is 35% plus surcharge and cess (proposed to be reduced to 30% plus surcharge and cess by the Union Budget 2005-06). No minimum corporate income tax is payable by Indian companies in absence of profits. Generally all business expenses are deductible from taxable income. Indian companies are also required to withhold income tax from various payments and deposit it with the government.
India proposes to introduce a uniform value added tax systems with effect from April 1, 2005, in an attempt to unify certain indirect taxes.
4.2 International Taxation
India has entered into double taxation avoidance agreements (“DTAA”) with several countries around the world. Generally, the provisions of DTAA prevail over the domestic tax provisions and offer bilateral relief to residents in both jurisdictions in respect of foreign taxes paid. Foreign investors can consider to route their investments into India through any of the tax heavens having beneficial DTAA with India.
Most of the DTAA’s provide that, if a foreign company has a permanent establishment (“PE”) in India, its income accruing in India would be taxable in India at the rate applicable to foreign companies (i.e. 40% plus surcharge and cess).
4.3 Transfer Pricing Regulations
India has implemented transfer pricing regulations. Generally speaking, these rules govern the minimum profit margin to be maintained by the Indian companies in transactions with associated enterprises. Arguably, the transfer pricing regulations legitimize provision of services by Indian companies to foreign parent and other entities on a cost plus basis, as per the industry norm and avoid PE implications for the foreign entity in India.
4.4 Tax Benefits
In India, substantial direct and indirect tax benefits/exemptions for the initial few years are provided to units engaged in specific business activities, such as export oriented software and hardware units; specified infrastructure projects; units in backward areas, special economic and free trade zones.
The export oriented software and services units are offered exemption of customs duty on imports, exemption of excise duty and sales tax on domestic purchase of capital goods in addition to exemption of octroi. Due to availability of tax benefits/exemptions and availability of educated workforce, India is fast becoming the global hub for software development and business process outsourcing.
The DTAA, transfer pricing regulations and tax benefits provide an opportunity to the foreign investors to arrive at an efficient tax structuring of investments and business in India. Foreign investors can, considering the tax rates in both jurisdictions, ability of the Indian companies to provide services at a cost plus basis and tax exemption available for specific activities, decide the quantum of their investments in India.
5. RETURN ON INVESTMENTS
Foreign investors can repatriate funds out of India though a number of options including dividends, fees for technical and administrative services, royalties, etc.
5.1 Repatriation of Profits
Indian companies can remit their profits to a foreign collaborator by way of dividend subject to dividend distribution tax @ 12.5% plus surcharge and cess. There is no limit on the rate of dividend that can be distributed or repatriated out of India. However, there are certain conditions with regard to computation of profits and transfer of upto 10% of profits of the company to its reserves before declaring dividend.
Branch offices of foreign companies can also remit business profits to their principal subject to withholding tax @ 40% plus surcharge and cess (unless lower tax rate is prescribed by the DTAA).
5.2 Repatriation of Fees and Royalties
The royalty for transfer and use of technology, trademark and brand name, can be remitted to foreign collaborators subject to withholding tax @20% plus surcharge and cess (unless lower tax rate is prescribed by the DTAA). If the foreign collaborator belongs to a country having DTAA with India, it can avail credit of withholding taxes paid in India. Research and Development Cess @5% is also payable by the Indian importer of technology on payments towards imported technology.
6. IP PROTECTION
India recognizes the value of intellectual property rights and has well established procedures for protection of patents, trademarks, designs and copyrights.
The true and first inventor of a product or process can register it as a patent in India. Trademarks, for services and goods, and designs (industrial designs, excluding functional designs) can also be registered in India by its owner. As far as copyrights are concerned, registration is not compulsory. Copyrights in original literary, dramatic, musical and artistic works, cinematography films and sound recordings can also be registered. The registration of copyright is however not compulsory to initiate a legal action against infringement.
Violation of IP rights is a punishable offence in India. The owners of patents, trademarks, designs and copyrights can institute appropriate legal actions against the infringer and restrain the infringer from using the IP pending conclusion of the legal action.
7. HUMAN RESOURCES AND LABOUR ISSUES
7.1 Costs
India arguably has the world’s largest educated workforce available at salaries substantially below the international standards. A statute prescribing minimum wages to be paid to different classes of employees is in force in India. However, the minimum wages prescribed under this statute are not only far below the minimum wages payable to similarly qualified and skilled workers in developed economies across the world, they are also much below the salaries ordinarily paid in India to such workers by reputed employers.
In addition to salary, certain other employee benefits and contributions, such as provident fund and employee state insurance are also payable by the employer (together with the employees).
The availability of economical educated workforce facilitates the foreign investors to source international quality services and products at comparatively lowe
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