Setting up company in hong kong

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Rajesh Shah (Querist)

25 May 2013 I am an Indian resident in the business of imitation jewellery. One of my primary markets is Hong Kong and China. I frequently travel to Hong Kong & China for business.

I am looking to set up a company in Hong Kong which. The company will do trading outside India (that is buying from suppliers located outside India, and selling to clients located outside India). So the profits that will be generated will be purely foreign income (without any link to India).

My questions are as follows:

1) First and foremost: Is any prior permission of RBI required for setting up a company in Hong Kong by Indian resident individual?

2) I assume that it will be necessary to show the profits generated in the foreign company as foreign income in my books of accounts in India, correct? In such a case, will I have to pay taxes on the income of the Hong Kong company both in Hong Kong as well as in India? Is there a way to avoid such double-taxation on the same income?

Thanks in advance for your assistance.

Rupesh Jain

Rupesh Jain (Expert)

29 May 2013 IF YOU ARE TRANSFER MONEY FROM INDIA TO INVEST OUT SIDE INDIA.
THEN INTEMATION AND PREMISSION TO BE TAKEN FORM RBI

AND YOUR CO IS NRI AND HAVE NO BRANCH IN INDIA .
THEN WHAT FOAM YOU SHOUL TFR . MONEY IN INDIA.
ONLY WAY OF DIVIDEND OR ANY FORM OF SHAREHOLDER INCOME WHAT THAT CALLED IN HONGKON AND CHINA.
THIS IS TAX FREE FOR SHARE HOLDER IN INDIA

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)

13 July 2013 There is no bar on your forming any company in any part of the world but permission from RBI is required for investing funds in that company. Secondly the country in which you are setting up the company has some norms and if you are fulfilling those norms then there is no problem The company earning income in any part of the world will have to pay the taxes of that country and not always of India. Yes if you earn any income from that company being resident then that income has to be shown in your return.

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