Company outside india

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Rahul Sachdev (Querist)

17 September 2014 Hi All,

I am looking to set up a company outside India. Please let me know what is the better route for making such investment i.e. under

1) Liberalised Remittance Scheme (LRS) by Resident Individual (max limit of USD 125,000/- p.a.)

OR

2) Overseas Direct Investment (ODI) by Indian Company (max limit of 400% of Net worth)

Please guide me what is the better route of making the investment for setting up of JV outside India.

Also from tax point of view, what is better, keeping in mind the repatriation of funds back in India.

Thanks in advance.

Nikhil Kaushik

Nikhil Kaushik (Expert)

18 September 2014 1. which route to use will depend on what is the net worth of the company which can be used for routing the investment.

2. The method of incorporation with a view of repatriation of funds will depend on the rules of the country in which you wish to incorporate the company. So the answer has to be country specific and not a genarlised one.

Rahul Sachdev

Rahul Sachdev (Querist)

18 September 2014 The net worth of the company is within the specified limits. Just wanted a fair note on comparison of LRS vs. ODI route.

Nikhil Kaushik

Nikhil Kaushik (Expert)

18 September 2014 see the LRS suits passive investments like you investing in NASDAQ etc whereas ODI suits where you wish to maintain day-to-day control over your company. So if you have company with decent networth, then prefer investing through it

Nikhil Kaushik

Nikhil Kaushik (Expert)

Rahul Sachdev

Rahul Sachdev (Querist)

19 September 2014 Thanks for your expert opinion.

Where will the tax liability in India be less: under LRS or ODI?

Nikhil Kaushik

Nikhil Kaushik (Expert)

19 September 2014 Tax liability wont change on d basis of choice between lrs or odi method

Rahul Sachdev

Rahul Sachdev (Querist)

19 September 2014 What about from profit repatriation point of view? tax liability will be lower in case of company (DDT will be involved) or individual ?

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