shareholding in a private limited company

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vaitheeswaran.s.

finance manager

26 Points Posted on 07 July 2010

i am a NRI and would like to participate in the equity of a private limited company started by my friends. in order not to lose my NRI status and also to avoid hassles of filing any papers and from the tax point and long term view, which of the following route is best to become the shareholder: (the investment will be non-repatriable and obviously, i will be back in india after 5 or 6 years.)

1.) in my name, 2.) my wife name 3.) as a trust and my children as beneficiary with their education and marraige as objective. 4.) as a HUF. 5.) any other way...

I would appreciate the forum members help in this regard. thanks in advance.

Replies (3)

Juzer Sadikot

CA - innovative solutions for Imports an

1014 Points Posted on 07 July 2010

Dear Mr. Vaitheeswaran,

As investment in shares in Indian pvt co is on Non-rep basis and I understand that pvt company/you would not be keen to distribute any earning as Dividend, your case become very simple and you may invest in your/your family members' name.

Also I have assumed that the country in which you are currently resident doesn't charge tax on undistributed earning or is having favorable DTAA with India.

Regards

Juzer

CA Shiv

Business Controller

2693 Points Posted on 07 July 2010

Hello,

there is no problem regarding the same... Have to transfer amount through NRE account and than can invest here. Also get one PAN card to fiel return here from next year....

vaitheeswaran.s.

finance manager

26 Points Posted on 08 July 2010

Thanks Mr.Juzer and Mr.Shivang for your clarification. i am residing in UAE and so, there is no tax issue here. i would take the shares either in my name or my wife's name.

Thanks once again.

regards,

vaithy.