Outbound Investment Structuring

Package Inclusion :

  • Need for SPV’s
  • Holding Company Regime
  • Exemption /Thin cap rules
  • IPR Regime
  • Handling worldwide Withholding tax provisions

Outbound Investment Structuring

What is Outbound Investment Structuring?

Under the automatic route, an Indian company is not required to take prior approval from the RBI for setting up JV/WOS abroad. The criteria for direct investment under the automatic route shall include

What is Benefits of SPV's?


1) Participation Exemption

Benefit of exemption in the SPV's jurisdiction for dividend and capital gains coming from downstream investments on the fulfillment of certain conditions. Conditions basically include shareholding pattern, the jurisdiction of the parent entity and share of the holding.

IPR Regime

Specific deduction, exemptions, and incentives are available in some jurisdictions with regard to IPR holdings such as Patent Box Regime .i.e. concessional rate for royalty income in case of certain IPR’s and also deduction for certain cinematographic films given in the UK.

Withholding Tax provisions

Withholding tax exemptions on dividends, royalties, and interest

Favorable Holding Company Regime

Lower income tax rates for holding companies under specific holding company regimes, existence of CFS provisions, Good Treaty Network

Thin Capitalization Rules

Companies are said to be capitalized thinly when its capital comprise a greater proportion of debt equity. In such a case cash repatriation is possible by claiming tax deduction for interest on debt

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