We facilitated a seamless global expansion for an Indian company

Treelife played a pivotal role in helping an Indian private limited company transition to a US-headquartered structure. By setting up an LLP in India and guiding the investment process under the ODI route, we ensured compliance with FEMA and income-tax regulations. Our strategic approach enabled the company to raise funds from foreign investors and expand globally with minimal tax implications.

 

Business Overview

Indian individual promoters had established a private limited company in India and sought to expand their business globally. They aimed to raise funds from foreign investors and transition to a US-headquartered structure.

 

Project Undertaken

  • Setting up an LLP in India
  • Investment in a newly incorporated US entity under the ODI route
  • Acquisition of Indian entity shares by the US entity from the promoters

 

Structure Mechanics:

  • Indian individual promoters set up an LLP in India.
  • The LLP makes investments in a newly incorporated US entity under the ODI route.
  • The US entity acquires the shares of the Indian entity from the promoters, adhering to FEMA and income-tax regulations.
  • A benchmarking study is undertaken for all ongoing transactions between the US entity and the Indian entity.

 

Parameters:

  • The gift structure used under the erstwhile ODI rules was no longer possible, as Indian resident founders can now receive gifts of shares from their relatives.
  • Recently revamped ODI rules by RBI do not permit a foreign company to set up an Indian subsidiary where the Indian promoters control such a foreign company.
  • Any transaction between the offshore company and its Indian subsidiary needs to be benchmarked from a transfer pricing perspective.
  • Minimal income-tax implications and adherence to FEMA pricing norms.

 

Facts:

  • Indian promoters aimed to expand their business globally and raise funds from foreign investors.
  • They sought to move to a US-headquartered structure to facilitate this expansion.

By strategically structuring the investment and ensuring compliance with the latest ODI rules and FEMA pricing norms, Treelife enabled the company to achieve its global expansion goals. Our financial advisory services provided the necessary support to navigate complex regulatory landscapes and optimize tax implications, ensuring a smooth transition for the company’s international growth.

About the Author
Treelife
Treelife
Treelife Team | support@treelife.in

We are a legal and finance firm with a deep focus on the startup ecosystem. We offer a wide range of services, including Virtual CFO, Legal Support, Tax & Regulatory, and Global Expansion assistance.

Our goal at Treelife is to provide you with peace of mind and ease in business.

We Are Problem Solvers. And Take Accountability.

Related Posts

Family Offices in India – A Complete Guide
Family Offices in India – A Complete Guide

A family office is a privately controlled advisory and investment entity set up by a high-net-worth individual (HNI) or ultra-high-net-worth...

Learn MoreLearn More
The “Pe” Predicament: A Trademark Tussle in India’s Fintech Sector — PhonePe vs. BharatPe
The “Pe” Predicament: A Trademark Tussle in India’s Fintech Sector — PhonePe vs. BharatPe

Intellectual Property Rights (IPR) disputes, especially around trademarks, can impose substantial direct and indirect costs on startups, companies, and investors...

Learn MoreLearn More
What is a Virtual CFO? Role, Services, and Benefits
What is a Virtual CFO? Role, Services, and Benefits

A Virtual CFO (VCFO) is a seasoned financial expert who provides high-level CFO services remotely on a part-time or contract...

Learn MoreLearn More

For Customer Support

Mumbai | Delhi |
Bangalore | GIFT City

Speak to Us!

We respond within 60 minutes.

    Your information is confidential and secure

    For Customer Support

    Mumbai | Delhi |
    Bangalore | GIFT City

    Fill out the form to unlock the full report!

    Image