NRI business registration – Page 3

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Understanding Tax Planning: Meaning, Objectives & How It Works

Tax planning is a vital aspect of financial management that individuals and businesses must undertake to optimize their tax liabilities while remaining compliant with legal requirements. In this article, we’ll delve into the meaning, objectives, and mechanisms of tax planning, shedding light on how it can benefit you or your business.

What is Tax Planning?

Tax planning is the process of organizing your finances in a way that minimizes your tax liability. It involves various strategies and techniques aimed at legally reducing the amount of taxes owed without violating tax laws. Effective tax planning requires careful consideration of financial decisions throughout the year to maximize tax efficiency.

Objectives of Tax Planning:

Minimization of Tax Liability: The primary objective of tax planning is to reduce the amount of taxes payable by taking advantage of available deductions, credits, exemptions, and other tax-saving opportunities.

Ensuring Compliance: While minimizing taxes is important, tax planning also aims to ensure compliance with tax laws and regulations. By staying abreast of tax laws, individuals and businesses can structure their transactions and operations in a manner that is both tax-efficient and legally sound.

Optimizing h Flow: Strategic tax planning can help optimize cash flow by timing income and expenses to minimize tax obligations in any given year. By managing cash flow effectively, individuals and businesses can improve their financial stability and reinvest savings into growth opportunities.

Wealth Preservation: Tax planning plays a crucial role in wealth preservation by implementing strategies that protect assets and minimize the erosion of wealth due to excessive taxation. This includes estate planning strategies aimed at minimizing estate taxes and facilitating the smooth transfer of assets to heirs.

How Tax Planning Works:

Tax planning involves a variety of strategies tailored to individual circumstances and financial objectives. Some common techniques include:

Income Deferral: Deferring income to future years can lower your current tax liability, especially if you expect to be in a lower tax bracket in the future.

Expense Acceleration: Conversely, accelerating deductible expenses into the current tax year can help reduce taxable income and lower your tax bill.

Investment Planning: Investing in tax-advantaged accounts such as IRAs, 401(k)s, or 529 plans can provide tax benefits while helping you build wealth for retirement, education, or other goals.

Strategic Use of Deductions and Credits: Maximizing deductions and credits, such as those for charitable contributions, mortgage interest, education expenses, and business expenses, can significantly reduce your tax liability.

Business Structure Optimization: For businesses, choosing the right legal structure, such as a corporation, partnership, or limited liability company (LLC), can have significant tax implications. Structuring business transactions and operations in a tax-efficient manner can lead to substantial savings.

Tax planning is an essential component of financial management that can help individuals and businesses minimize their tax burden while achieving their financial goals. By understanding the objectives and strategies of tax planning, you can make informed decisions that optimize your tax situation and preserve your wealth.

At Cogent Professionals, we specialize in helping individuals and businesses navigate the complexities of tax planning. Contact us today to learn how our expert tax advisors can assist you in developing a customized tax strategy tailored to your unique needs and objectives.

Maximize your tax savings and secure your financial future with our professional tax planning services. Contact us now for a consultation!

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Beginner’s Guide to Investing: Exploring Your Investment Options

“Beginner’s Guide to Investing: Exploring Your Investment Options” – Gain insights into various investment options and strategies to confidently kickstart your investment journey.

Are you someone who is looking to venture into the world of investments but feels overwhelmed by the sheer variety of options available? Whether you’re saving for retirement, planning for your children’s education, or simply aiming to grow your wealth, understanding the basics of investing is crucial for achieving your financial goals. In this comprehensive guide, we’ll walk you through the fundamentals of investing and explore various investment opportunities and strategies tailored for novice investors.

Understanding Investment Basics

Before diving into specific investment options, it’s essential to grasp the foundational concepts of investing. At its core, investing involves putting your money into assets with the expectation of generating returns over time. The key principles to understand include:

Risk and Return: Generally, higher returns come with higher risks. It’s essential to assess your risk tolerance before choosing investments.

Diversification: Spreading your investments across different asset classes can help mitigate risk and optimize returns.

Time Horizon: Your investment goals and time horizon will influence your investment strategy. Longer time horizons typically allow for more aggressive investment approaches.

Investment Options for Novice Investors

Stock Market: Investing in stocks allows you to own a portion of a company’s equity. While individual stocks can be volatile, investing in diversified stock index funds or exchange-traded funds (ETFs) can provide exposure to the broader market with lower risk.

Bonds: Bonds are fixed-income securities issued by governments or corporations. They offer regular interest payments and return the principal amount at maturity. Bonds are generally considered safer investments than stocks but offer lower potential returns.

Mutual Funds: Mutual funds pool money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other assets. They offer professional management and diversification, making them suitable for novice investors.

Real Estate: Real estate investment can provide passive income through rental properties or capital appreciation through property appreciation. Real estate investment trusts (REITs) offer an alternative for investors looking to invest in real estate without directly owning properties.

Robo-Advisors: Robo-advisors are automated investment platforms that use algorithms to create and manage diversified investment portfolios based on investors’ goals and risk tolerance. They offer low-cost, hands-off investment solutions for novice investors.

Strategies for Success

Start Early: Time is your most valuable asset when it comes to investing. The power of compounding allows your investments to grow exponentially over time, so it’s crucial to start investing as early as possible.

Stay Consistent: Consistent investing, regardless of market fluctuations, can help you take advantage of dollar-cost averaging and reduce the impact of market volatility on your portfolio.

Educate Yourself: Continuously educate yourself about investment fundamentals, market trends, and investment strategies. Books, online resources, and reputable financial advisors can provide valuable insights to help you make informed decisions.

Diversify Your Portfolio: Diversification is key to managing risk and optimizing returns. Spread your investments across different asset classes, industries, and geographical regions to minimize concentration risk.

Monitor and Rebalance: Regularly review your investment portfolio to ensure it remains aligned with your goals and risk tolerance. Rebalance your portfolio periodically to maintain your desired asset allocation.

Investing can seem daunting for novice investors, but with the right knowledge and guidance, it can be a rewarding journey towards financial freedom. By understanding the basics of investing, exploring various investment options, and implementing sound investment strategies, you can embark on your investment journey with confidence. Remember, investing is a marathon, not a sprint, so stay disciplined, stay focused, and reap the rewards of your investments over time.

Ready to start investing? Explore your options with us today and save money with our financial strategies and planning services for both businesses and individuals.

Visit us at www.cogentprof.com Contact us via email at [email protected] or give us a call at +91 86961 99999

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7 Crucial Reasons Why Bookkeeping is Vital for Your Business’s Success

Maintaining proper bookkeeping practices is indispensable for any business, offering numerous benefits such as accurate budgeting, tax preparedness, organizational efficiency, and more. Here are seven compelling reasons why prioritizing bookkeeping is essential for the success of your business:

Facilitates Accurate Budgeting:
Bookkeeping streamlines the budgeting process by meticulously organizing income and expenses, providing a clear overview of financial resources and costs. A well-defined budget serves as a financial roadmap, aiding in planning for future expenses and fostering business growth. Without accurate and up-to-date records, budgeting becomes a mere exercise in guesswork.

Ensures Tax Preparedness:
With consistent bookkeeping practices, businesses are better prepared for tax obligations, avoiding last-minute scrambles and potential penalties. Detailed financial records enable accurate prediction of tax outcomes, ensuring compliance with HMRC requirements and minimizing stress during tax season.

Maintains Organized Records:
Regular bookkeeping prevents the chaos of last-minute searches for crucial business information, reducing the likelihood of missed deadlines and errors. By staying proactive and keeping records up to date, businesses can effortlessly access vital information when needed, enhancing efficiency and reliability.

Facilitates Goal Setting:
Clear and accurate financial records are essential for setting achievable business targets. Without reliable data for analysis, it becomes challenging to establish growth goals and measure progress effectively. By maintaining meticulous records, businesses can map out goals more accurately and strategize for sustainable growth.

Ensures Compliance with Regulations:
Adhering to government regulations, such as Making Tax Digital (MTD) initiatives, is imperative for businesses. Digital bookkeeping not only fulfills regulatory requirements but also streamlines the tax process through the use of applications and software. Utilizing user-friendly apps simplifies compliance efforts and eliminates the need for costly outsourcing.

Provides Peace of Mind:
Well-organized books alleviate the stress and anxiety associated with financial uncertainty and regulatory compliance. With tidy financial records and timely tax filings, business owners can enjoy peace of mind, knowing that their financial information is in order and ready for review, allowing them to focus on core business activities.

Facilitates Continuous Learning:
Engaging in bookkeeping activities, whether through digital platforms, workshops, or online resources, presents valuable learning opportunities for business owners. By gaining insights into their finances, individuals can make informed decisions and enhance their financial literacy, ultimately contributing to business success.

Now that the importance of bookkeeping is clear, take proactive steps to implement effective bookkeeping practices in your business. Access our free checklist for valuable tips on bookkeeping and leverage professional support from Cogent Professionals to optimize your financial management processes and achieve greater success. Start your journey towards financial efficiency today!

Visit us: www.cogentprof.com

Email: [email protected] | +91 86961 99999

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Registration of an Indian Company by Foreign Entities or Foreign National or Non Resident Indian (NRI’s)

Registration of an Indian Company by Foreign Entities or Foreign National or Non Resident Indian (NRI's)

Why India:

India stands as a prime choice for investment, attracting Non-Resident Indians (NRIs), foreign nationals, and foreign companies. This allure is attributed to its burgeoning economy and abundant resources. Positioned among the world’s swiftest expanding economies, India is poised for substantial growth in the upcoming decades, brimming with ample business prospects. With regulatory reforms and a welcoming atmosphere for investors, foreign investments into India have reached unprecedented levels, with expectations of further ascent.

In this context, we look at the process and procedure for a NRI or Foreign National or Foreign Company to invest or start, manage and grow a business in India.

The Government has always tried to make it easy for not only Indian residents but also for the Non Resident Indians, Foreign Entities and Foreign Nationals. The Ministry of Commerce and Industry created the Foreign Investment Promotion Board to bypass all the difficulties of doing business in India and ensure smooth sailing to all potential foreign investors.

Types of Entities for Registration of Foreign Companies in India

Before registering a foreign company in India, it’s essential to understand the different types of business entities available. The most common structures for foreign companies are:

1) Wholly Owned Subsidiaries ie WOS., 100% Indian Subsidiary

2) Joint Ventures with other Indian Companies subjected to Foreign Direct Investment rules.

3) Liaison Office: An LO serves as a representative office for the foreign parent company in India. It’s primarily responsible for promoting the parent company’s business interests, providing information about its products and services, and facilitating communication between the parent company and Indian customers. However, an LO is not permitted to engage in any profit-making activities in India.

4) Branch Office : A BO is an extension of the foreign parent company and can engage in a wider range of business activities, including marketing, import and export, and technical support services. However, a BO is generally restricted from manufacturing and processing activities in India. Profits earned by a BO are subject to Indian taxation.

5) Other options for foreign companies include setting up a Project Office, a wholly-owned subsidiary, or a joint venture with an Indian partner. The choice of entity depends on the foreign company’s business objectives, investment plans, and risk appetite.

Shareholders & Directors:

Type of Company	Minimum Shareholders	Maximum Shareholders	Minimum Directors	Maximum Directors
Private Limited	2	200	2	15
Public Limited	7	Unlimited	3	15

According to Companies Act, 2013 there must be at least One Resident Director i.e. who is a citizen of India and stays in India for a minimum of 180 days in a calendar year. Reserve Bank of India allows 100% FDI in many of the sectors in India under the automatic route.

Minimum Capital:

There is no minimum required Paid up share capital that a NRI, Foreign Entity or Foreign National is required to invest in a company in India.

Procedure for Incorporation of an Indian Company:

Keeping in view the ease of doing business, new form SPICe+ (Simplified Proforma for Incorporating Company electronically Plus) is notified for the incorporation of a company and incidental registrations. All the new company incorporations have to be done by the online filing of SPICe+ form. The other forms that need to be filed along with SPICe+ are AGILE-PRO, SPICe+AoA, SPICe+MoA and INC-9

Governing the web form:

Sections 4, 7, 12, 152 and 153 of the Companies Act, 2013 read with rules made thereunder.

Governing the web form:Purpose of the Web form:

Web form SPICe+ deals with the single application for reservation of name, incorporation of a new company, application for allotment of Director Identification Number ie.,DIN, application for PAN and TAN. This eForm is accompanied by supporting documents including details of Directors & subscribers, MoA, AoA and Consent of Directors. Once the eForm is processed and found complete, the company would be registered and CIN would be allocated. DINs are issued to the proposed Directors who do not have a valid DIN.

Maximum three Directors are allowed to use this integrated form for filing application for allotment of DIN while incorporating a company. Also PAN, TAN, GST registration, EPFO, ESIC and Opening of Bank account would get issued to the Company.

SPICe+ has been divided into two parts viz., SPICe+ Part A and SPICe+ Part B. SPICe+ Part A represents the section wherein all details with respect to name reservation for a new company has to be entered. Name reserved shall be valid for 20 days from the date of allotment.

SPICe+ Part B represents the section wherein all remaining details required for incorporation of a company have to be entered.

Documents Required for Registration by Foreign Entities:

Below are the documents required while registering a foreign company in India:
1) Proof of the foreign company’s existence, such as a Certificate of Incorporation or equivalent document
2) MoA and AoA of the foreign companies.
3) Board resolution authorizing the establishment of the Indian entity.
4) Name of Nominee’s in case of incorporation of WOS
5) Identity proof and address proof of the directors and authorized representative
6) Digital Signature certificate of authorized representative
Note: that all foreign documents must be notarized and apostilled in the country of origin, and translated into English if they are not in English.

Documents Required by Foreign National/Non Resident Indian:

Documents Required by Indian Director

1.KYC of Member and Nominee ie., PAN and AADHAR
2.Address Proof ie., any one of Latest Bank Statement/ Latest Electricity Bill/ Latest Mobile Bill/ Telephone Bill which is Not older than 60 days
3. Identity proof: Voter ID Card/ Driving License/ Passport Copy
4. Photograph of the promoters/ Directors
5. Email ID and Contact Details.
6. Digital Signature certificate (DSC)

Other Requirements:

1. Main Object or activities carried out by the Company.
2.Proof of Registered office address – Rent agreement/ Conveyance deed/Lease agreement.
3.Utility Bills of registered office address- Electricity Bill/ Water Bill/Telephone Bill which is not older than two months.
4. No Objection certificate from owner of the premises, if property is rented/ leased.

Process for Apostille and Notary of Documents:

The Companies Act, 2013 requires the signatures of subscribers and identity or address proof to be notarized before a Notary public of that country and then apostilled as per the Hague Convention if both foreign nationals provide documents issued by the country.

All the original documents shall be Notarized before apostille.
Notarized documents shall be submitted with the Embassy or Consulate (Issuing office) of the Country for apostille.
The issuing office shall validate the documents after making payment.
After Validation of documents, issuing office shall issue apostilled documents

Post-Registration Compliance

Once foreign company is registered in India, it’s essential to
maintain compliance with the country’s regulatory requirements, such as:
1) Declaration for the Commence of business in Form INC-20A is to be filed with Registrar of Companies within 180 days of the date of incorporation of the company.
1) Filing annual financial statements and returns with the MCA
2) Complying with Indian tax laws and filing tax returns on time
3)Maintaining proper accounting records and statutory registers
4) Complying with labor laws, environmental regulations, and other sector-specific requirements.

FEMA Compliances:

Procedure for receiving Foreign Direct Investment in an India Company

An Indian company may receive Foreign Direct Investment under the two routes as given under:

i) Automatic Route:
FDI up to 100% is allowed under the automatic route in almost all the activities/sector. FDI in sectors /activities to the extent permitted under the automatic route does not require any prior approval either of the Government or the Reserve Bank of India. Sectors or Activities not permitted under automatic route have to take approval from FIPB ie., Government Route for investing in India.

ii) Government Route: FDI in activities not covered under the automatic route requires prior approval of the Government which are considered by the Foreign Investment Promotion Board Department of Economic Affairs, Ministry of Finance.

Indian companies having foreign investment approval through the FIPB route do not require any further clearance from the Reserve Bank of India for receiving inward remittance and for the issue of shares to the non-resident investors.

The Indian company having received FDI either under the Automatic route or the Government route is required to report in the Form FCGPR, the details of the receipt of the amount of consideration for issue of equity instrument viz. shares or fully and mandatorily convertible debentures or fully and mandatorily convertible preference shares through an AD Category –I Bank, together with copies of the FIRC evidencing the receipt of inward remittances along with the Know Your Customer report on the non-resident investors from the overseas bank remitting the amount, to the Regional Office concerned of the Reserve Bank of India within 30 days from the date of receipt of inward remittances.

However, Companies Act, 2013 specifically provides for allotment of shares within 60 days from the date of inward remittance. Thus, it may be inferred that allotment shall be made within 60 days of inward remittance and FCGPR shall be filed within that duration.

After issue of shares ie., fully and mandatorily convertible debentures or fully and mandatorily convertible preference shares, the Indian company has to file the required documents in Form FCGPR with the bank in which funds were received. Bank will forward the FCGPR and the documents to the Regional office of Reserve Bank of India.

Sectors for which FDI is not allowed in India under the Automatic Route as well as under the Government Route: FDI is prohibited under the Government Route as well as the Automatic Route in the following sectors: 1)Lottery Business including Government, private lottery, online lotteries, etc. 2)Gambling and Betting including casinos etc. 3)Chit funds 4)Nidhi company 5)Trading in Transferable Development Rights 6)Real Estate Business or Construction of Farm Houses 7)Manufacturing of Cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes 8)Activities or sectors not open to private sector investment

Atomic energy and
Railway operations (other than permitted activities mentioned in entry 18 of Annex B).

Note: Foreign technology collaboration in any form including licensing for franchise, trademark, brand name, management contract is also prohibited for Lottery Business and Gambling and Betting activities.

Procedure after investment is made under the Automatic Route or with Government approval

a) On receipt of share application money:
Within 30 days of receipt of share application money/amount of consideration from the Foreign Entities or Foreign National or Non Resident Indian, the Indian company is required to report to the Regional Office concerned of the Reserve Bank of India, under whose jurisdiction its Registered Office is located, through bank in which funds have been received in Form ARF ie., Advanced Remittance Form.

b) Issue of shares:
Within 30 days from the date of issue of shares, a report in Form FCGPR should be filed with the Regional Office concerned of the Reserve Bank of India through the bank in which investment has been received.

Refund of Investment amount: In case, equity shares are not issued within 60 days of receipt of funds, the amount shall be refunded immediately to the non-resident investor.

Filing FLA Return: Every Indian company receiving FDI has to file Annual Return of Foreign Liabilities and Assets by 15th July of the relevant year. Non-filing of the return before the due date will be treated as a violation of FEMA and a penalty clause may be invoked for violation of FEMA.

Consequences of failure to comply with the above requirements
If any person contravenes any provision of this Act, or contravenes any rule, regulation, notification, direction or order issued in exercise of the powers under this Act, or contravenes any condition subject to which an authorization is issued by the Reserve Bank, he shall, upon adjudication, be liable to a penalty up to thrice the sum involved in such contravention where such amount is quantifiable, or up to two lakh rupees where the amount is not quantifiable, and where such contravention is a continuing one, further penalty which may extend to five thousand rupees for every day after the first day during which the contravention continues.

Process for Notary and Apostille of documents:

The Companies Act, 2013 requires the signatures of subscribers and identity or address proof to be notarized before a Notary public and apostille with Secretary of State’s office of that country as per the Hague Convention if both foreign national provides documents issued by the country.

Steps for Notary and Apostille of Documents:

Step 1: Obtain a certified true copy of the document: Before getting apostille, all the original documents shall be verified as a true copy by a government agency or Notary public.
Step 2: Contact the Secretary of State’s office in the state where the document was issued with all the certified true copy of the document. The Secretary of State’s office is responsible for issuing apostilles.
Step 3: Submit the document and pay the fee. The apostille Fee Varies by State to State.
Step 4: Once the apostille has been issued, it will be attached to the certified copy of the document and collect the apostille documents.

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Understanding Tax Planning: Meaning, Objectives & How It Works

Categories

Beginner’s Guide to Investing: Exploring Your Investment Options

“Beginner’s Guide to Investing: Exploring Your Investment Options” – Gain insights into various investment options and strategies to confidently kickstart your investment journey.

Categories

7 Crucial Reasons Why Bookkeeping is Vital for Your Business’s Success

7 Crucial Reasons Why Bookkeeping is Vital for Your Business’s Success

Categories

Registration of an Indian Company by Foreign Entities or Foreign National or Non Resident Indian (NRI’s)

Registration of an Indian Company by Foreign Entities or Foreign National or Non Resident Indian (NRI's)

Why India:

Types of Entities for Registration of Foreign Companies in India

Shareholders & Directors:

Minimum Capital:

Procedure for Incorporation of an Indian Company:

Governing the web form:

Governing the web form:Purpose of the Web form:

Documents Required for Registration by Foreign Entities:

Documents Required by Foreign National/Non Resident Indian:

Documents Required by Indian Director

Other Requirements:

Process for Apostille and Notary of Documents:

Post-Registration Compliance

FEMA Compliances:

Procedure for receiving Foreign Direct Investment in an India Company

Procedure after investment is made under the Automatic Route or with Government approval

Process for Notary and Apostille of documents:

Steps for Notary and Apostille of Documents:

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