International Taxation (Urgent)

Hi Palika!

1. Yes, a foreign citizen can set up a company in India. A company incorporated in India is an Indian Company, A company that is incorporated outside but has operations in India and hence is liable to pay taxes in India is a foreign company. Also, if a subsidiary is incorporated in India and its Place of Effective Management is outside India, like in your case it will be in Malaysia, it will be a Foreign Company.

2. Yes, he can open a bank account in India after incorporation.

3. If the transaction is facilitated through India, it will be taxed in India, both accrued and received.

4. Income Tax Rate for Foreign Companies for AY 2019-20 | FY 2018-19

Surcharge

The income tax computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge.

• Taxable Income exceeding ₹ 1 Crore –  2% of computed income tax.

(However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of ₹ 1 crore by more than the amount of increase in taxable income.)

• Taxable Income exceeding ₹ 10 Crores – 5% of computed income tax.

(However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of ₹ 10 crores by more than the amount of increase in taxable income.)

Hope it helps! :)