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Invest in India

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Law Senate Law Firm has strong experience in handling high value foreign investment proposals from Foreign Companies and foreign investors who are investing in India. – PowerPoint PPT presentation

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Title: Invest in India


1
Investing in INDIA
  • Presented By S Ravi Shankar
  • Law senate Law Firm New Delhi Mumbai
  • ravi_at_lawsenate.com

2
Government Structure
3
Government Structure in india
  • Government of India 
  • Government of the State ( Maharashtra)
  • Local Bodies (Pune Munipality)
  • Statutory Bodies
  • Investment Promotion Board
  • Regulatory Bodies
  • Securities Exchange Board of India
  • Reserve Bank of India

4
Powers of the governments
  • Constitution of India
  • Central List (Customs Duty, Central Excise Duty,
    Central Value Added Tax, Income Tax, Foreign
    exchange regulations, Visas etc.,)
  • State List (Labour laws, Value added Tax,
    Electricity, Security)
  • Concurrent List (Environment laws)
  • Powers of Statutory Bodies (Reserve Bank of
    India)
  • Local Body powers 

5
General Business models of FDI
  • Branch office
  • Liasion office
  • Project office 
  • Joint venture Company 
  • 100 Subsidiary of a Foreign Company 

6
100 Subsidiary of a Foreign Company
  • Permitted in all fields where 100 Foreign
    investment is permitted by Government of India
  • 100 export units
  • Manufacturing except the items reserved for Micro
    Small scale Sector 
  • Manufacturing except items which are reserved 
  • 100 profit after deduction of taxes repatriable
    to the Mother Company 

7
Investment routes
8
Join Venture Company
  • Joint venture company is a Company formed by two
    or more share holders
  • Partnership Company
  • Limited Liability Partnership (LLP)
  • Private Limited Company 
  • Public limited Company

9
Private Limited Company
  • A minimum of two share holders
  • A Maximum of 200 Share holders
  • A minimum of two Directors
  • Minimum authorised Capital 2200 USD
  • Foreign Nationals also have to get a DIN
    (Director Identification number) to become a
    Director
  • Foreign Nationals can be Directors
  • KYC required for all share holders
  • KYC (Know your customer) norms can be full filled
    from any foreign country 

10
Private limited company
  • Shares of a Private Limited Company can not be
    listed in a Stock Exchange 
  • Required Documents Address Proof of Share
    holders, identity proof of share holders, Address
    of the Registered office, Memorandum of
    Association, KYC, DIN etc.,

11
Governing bodies of a Company
  • General Body 
  • Board of Directors
  • General Body - Forum of all share holders of the
    Company
  • Powers of the General Body includes 
  • Powers to elect the Directors
  • Adopt the Audited Finance Statements
  • Change in Memorandum Articles of Association 
  • Appointment of Auditors
  • Issuance of Shares 

12
Powers of the board of Directors
  • Board of Directors do the Day to Day Management
    of the Company
  • Borrowing of funds
  • Investment Decisions
  • Diversification decisions
  • Office Management
  • Reporting Compliances 
  • Absence in two meetings can lead to termination
    of a Director from the board 
  • Powers of the Board can be restricted by the
    General Body

13
Taxation in India
  • Corporate Tax- Income Tax - 30
  • Dividend Disbursement tax - 15
  • Short Term Capital Gains Tax - 30
  • Long Term Capital Gains Tax - 10-15
  • Central Excise Duty - Approx 23
  • VAT - 12-14-5
  • Customs duty Depends on the item/ use

14
Labour Laws in India
  • Regular Labours are protected by Industrial
    Disputes Act
  • Enquiry, Disciplinary Action, Suspension,
    retrenchment, removal etc., are allowed by law
  • Contract Labour system is legal in India
  • Industrial Disputes Act apply only to Labours
    (Workmen)
  • There is no protection for officer category
    employees
  • Employees provident Fund, Employees State
    Insurance etc., are mandatory

15
Investment Flow Chart
16
Government Investment Promotion Schemes
17
Government Promotion Schemes
18
Exit Options
  • Exit options are decided and incorporated into
    the Investment contract between the parties
  • Shares of the Exiting Partner can be Sold to
    Third parties 
  • Shares of the Exiting Partner can be sold to JV
    Partners
  • Liquidation of the Company
  • Full amount realized from Exit can be repatriated
    to the country of investor.

19
Dispute Resolution options
20
Dispute Resolution
  • International Arbitration Clauses are preferred
    because Court litigation takes long time in India
  • India is a New York Convention country hence
    India China recognize the arbitration awards
    passed in each other.
  • India has good Arbitration Institutions like ICA,
    IDAC India, DIAC etc.,
  • CITAC, SHIAC BAC Arbitration Centre awards are
    recognized in India
  • ICC, SIAC, HKIAC, LCIA are popular in India
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