Any indians here? I've got a question.

alento

Thank you so much for taking the time for this reply @HostEONS but it has taken me down quite a rabbit hole.

So far everything I am finding states that the FLA return has to be filed by eligible entities, not individuals ... so an individual that owns a foreign entity does not need to file. Problem is that this is only specified by one reference, so it seems somewhat ambiguous as I cannot find multiple sources that state individuals owning foreign entities are exempt, but am able to find multiple sources stating who must file:

ELIGIBLE ENTITIES
A Company within the meaning of section 1(4) of the Companies Act, 2013.
A Limited Liability Partnership (LLP) registered under the Limited Liability
Partnership Act, 2008
Others include SEBI registered Alternative Investment Funds (AIFs), Partnership
Firms, Public Private Partnerships (PPP) etc.

Note that all are legal entities, or other business entities, not individuals .... so yes, if your Indian legal entity owns a legal entity abroad, there is certainly quite a lot involved. I am still trying to find the answer to the question of whether or not a foreign legal entity owned by an individual is included, or not.

mgcAna

@HostEONS said:

@alento said:

@HostEONS said:
Stripe is the way to go ...

You can even Try Stripe Atlas if your budget allows and are ready to do all the RBI formalities on regular basis and also regular recurring expenses atleast 15K USD per year extra expenses.

Or you can incorporate a company in HK or SG and then get Stripe account for it, hardly requires any docs, but even this require regular return filing with RBI ... this also require some initial investment and also regular recurring expenses atleast 15K USD per year extra expenses.

Would you share what the "RBI formalities on a regular basis" that you mention in the first paragraph are?

And also the "regular return filing with RBI" from the second option?

In both cases you mention regular recurring expenses of $15k USD per year. Such as what?

I am asking as I have a colleague in India who seems to think that forming a US based LLC is super easy, and the tax consequences are minimal. I agree with his assessment from the US side, but really do not know the reality on the Indian side. Thanks!!

Hi
When you incorporate your company outside India and you are a resident of India, you need to following certain RBI guidelines, company outside India = Wholly owned subsidiary = WOS

1) When you setup a WOS outside India it will have share holders or owners of the company or stake holder what you want to call it. Now the partner in that WOS can be
either an individual or Partner ship Firm India or LLP or a Pvt. Ltd. company in India
2) The easiest route is to do it as individual if you are going to be 100% stake holder in the WOS
3) You need to first setup your WOS, then once you open your bank account for WOS, you will need to send the paid-up capital for your WOS
4) Now this initial capital that you send to your WOS Bank account outside India you need to do it via ODI (Overseas Direct Investment) Process of RBI, you can search for ODI in RBI website or google.
5) ODI is basically a form that you will be submitting to your bank account in India and then they will remit payment to your WOS Bank account
6) Once this is done I think within 1 month you need to submit copy of issued shares for the investment done to your bank, they will forward it to RBI, basically you don't communicate with RBI, your bank does
7) Once this is done every year you need to get your books of accounts for WOS AUDITED, and file APR (Annual Performance Report) with your bank, which they will forward to RBI

There are many more minor stuff involved but this is a basic guide, this is not a legal guide, I just mentioned everything that I could recall.

Regarding 15K Extra expense, you need to pay to your CPA in US or HK or SG wherever you setup your company, then you need to shell out atleast 10K for AUDIT, again depends upon number of transactions, but this is just a rough estimate, in SG you need to even pay a fees to local director.

your host country law might not require AUDIT, but RBI needs audited books of accounts, it was not required untill 2 yrs ago, but they have changed the rules now to stop people using their WOS for money laundering etc...

So 15K just a rough estimate for extra expense if you setup a company outside India

If you do it by any other means you are taking risk of invoking FEMA and other money laundering actions against you as it will be ILLEGAL

This is good information, can you refer some documentation to understand this in details but layman language ?

And also, have you done this ?

HostEONS

@alento said:
Thank you so much for taking the time for this reply @HostEONS but it has taken me down quite a rabbit hole.

So far everything I am finding states that the FLA return has to be filed by eligible entities, not individuals ... so an individual that owns a foreign entity does not need to file. Problem is that this is only specified by one reference, so it seems somewhat ambiguous as I cannot find multiple sources that state individuals owning foreign entities are exempt, but am able to find multiple sources stating who must file:

ELIGIBLE ENTITIES
A Company within the meaning of section 1(4) of the Companies Act, 2013.
A Limited Liability Partnership (LLP) registered under the Limited Liability
Partnership Act, 2008
Others include SEBI registered Alternative Investment Funds (AIFs), Partnership
Firms, Public Private Partnerships (PPP) etc.

Note that all are legal entities, or other business entities, not individuals .... so yes, if your Indian legal entity owns a legal entity abroad, there is certainly quite a lot involved. I am still trying to find the answer to the question of whether or not a foreign legal entity owned by an individual is included, or not.

Yeah that's why I said simplest route is to do it as an individual

FLA and APR are different

APR is mandatory for all

FLA has to be done only by Entities not Individuals though about 10 yrs ago even individuals had to do it, but it was removed or atleast that's what I was told

HostEONS

@mgcAna said:

@HostEONS said:

@alento said:

@HostEONS said:
Stripe is the way to go ...

You can even Try Stripe Atlas if your budget allows and are ready to do all the RBI formalities on regular basis and also regular recurring expenses atleast 15K USD per year extra expenses.

Or you can incorporate a company in HK or SG and then get Stripe account for it, hardly requires any docs, but even this require regular return filing with RBI ... this also require some initial investment and also regular recurring expenses atleast 15K USD per year extra expenses.

Would you share what the "RBI formalities on a regular basis" that you mention in the first paragraph are?

And also the "regular return filing with RBI" from the second option?

In both cases you mention regular recurring expenses of $15k USD per year. Such as what?

I am asking as I have a colleague in India who seems to think that forming a US based LLC is super easy, and the tax consequences are minimal. I agree with his assessment from the US side, but really do not know the reality on the Indian side. Thanks!!

Hi
When you incorporate your company outside India and you are a resident of India, you need to following certain RBI guidelines, company outside India = Wholly owned subsidiary = WOS

1) When you setup a WOS outside India it will have share holders or owners of the company or stake holder what you want to call it. Now the partner in that WOS can be
either an individual or Partner ship Firm India or LLP or a Pvt. Ltd. company in India
2) The easiest route is to do it as individual if you are going to be 100% stake holder in the WOS
3) You need to first setup your WOS, then once you open your bank account for WOS, you will need to send the paid-up capital for your WOS
4) Now this initial capital that you send to your WOS Bank account outside India you need to do it via ODI (Overseas Direct Investment) Process of RBI, you can search for ODI in RBI website or google.
5) ODI is basically a form that you will be submitting to your bank account in India and then they will remit payment to your WOS Bank account
6) Once this is done I think within 1 month you need to submit copy of issued shares for the investment done to your bank, they will forward it to RBI, basically you don't communicate with RBI, your bank does
7) Once this is done every year you need to get your books of accounts for WOS AUDITED, and file APR (Annual Performance Report) with your bank, which they will forward to RBI

There are many more minor stuff involved but this is a basic guide, this is not a legal guide, I just mentioned everything that I could recall.

Regarding 15K Extra expense, you need to pay to your CPA in US or HK or SG wherever you setup your company, then you need to shell out atleast 10K for AUDIT, again depends upon number of transactions, but this is just a rough estimate, in SG you need to even pay a fees to local director.

your host country law might not require AUDIT, but RBI needs audited books of accounts, it was not required untill 2 yrs ago, but they have changed the rules now to stop people using their WOS for money laundering etc...

So 15K just a rough estimate for extra expense if you setup a company outside India

If you do it by any other means you are taking risk of invoking FEMA and other money laundering actions against you as it will be ILLEGAL

This is good information, can you refer some documentation to understand this in details but layman language ?

And also, have you done this ?

https://www.rbi.org.in/scripts/FAQView.aspx?Id=17

I already gave you all the information in layman's language,

Please consult a good Chartered Accountant who has experience with ODI as not all CA have knowledge about it or better visit :

Overseas Investment Division,
Exchange Control Department,
Central office,
Reserve Bank of India,
Mumbai 400001.

Atleast I visited them to clear all my doubts before my first ODI but that was 15 yrs ago

dev_vps

@mgcAna @HostEONS

This may be useful
https://www.pwc.in/assets/pdfs/news-alert/regulatory-insights/2021/pwc_regulatory_insights_13_august_2021_overseas_investment_regulations_under_fema_1999_draft_rules_regulations.pdf

— check with tax professional who deals in dual taxes

on a side note, too many rules in India even to get a local sim

Tele2drv

@hostkar said:
Contact me, I am Razorpay Partner, will help you on onboarding if not done.

My Razorpay account is showing Account Activation 95%, can you help me to accelerate this process so that the account gets fully activated?
All the documentation parts done like GST, bank, business details and all..

ArrowBoi

@Tele2drv said:

@hostkar said:
Contact me, I am Razorpay Partner, will help you on onboarding if not done.

My Razorpay account is showing Account Activation 95%, can you help me to accelerate this process so that the account gets fully activated?
All the documentation parts done like GST, bank, business details and all..

should contact razorpay on website

hostkar

@Tele2drv said: My Razorpay account is showing Account Activation 95%, can you help me to accelerate this process so that the account gets fully activated?

All the documentation parts done like GST, bank, business details and all..

contact once to there support , they will activate it.

.
Previously they have stopped onboarding new customers for longtime. But they have started it recently a few days ago.

ViridWeb

@Tele2drv said:

@hostkar said:
Contact me, I am Razorpay Partner, will help you on onboarding if not done.

My Razorpay account is showing Account Activation 95%, can you help me to accelerate this process so that the account gets fully activated?
All the documentation parts done like GST, bank, business details and all..

Click on that 95% notification. I'm sure it'll give you rest task to complete the application.

Our experience with RazorPay pretty smooth

Tele2drv

@ViridWeb said:

Click on that 95% notification. I'm sure it'll give you rest task to complete the application.

Our experience with RazorPay pretty smooth

Showing "Your KYC is under review."

Tele2drv

@hostkar said:
Previously they have stopped onboarding new customers for longtime. But they have started it recently a few days ago.

Submitted documents just after they got approval from RBI

ArrowBoi

I created my razorpay acc on sunday and they later asked me info about my business so I filled it in and now I'm waiting.

FatGrizzly

Bro's.

Its Christmas week and they have got a lot of KYC applications due to their license approval.

Wait.

ArrowBoi

@FatGrizzly said:
Bro's.

Its Christmas week and they have got a lot of KYC applications due to their license approval.

Wait.

?
why the aggression?
we are waiting?

ViridWeb

@Tele2drv said:

@hostkar said:
Previously they have stopped onboarding new customers for longtime. But they have started it recently a few days ago.

Submitted documents just after they got approval from RBI

Then you've to wait. They will do that after the holidays

ArrowBoi

@ViridWeb said:

@Tele2drv said:

@hostkar said:
Previously they have stopped onboarding new customers for longtime. But they have started it recently a few days ago.

Submitted documents just after they got approval from RBI

Then you've to wait. They will do that after the holidays

how long are christmas holidays btw? till the 27th?
or are we to wait until the new year is done?

totally_not_banned

@ArrowBoi said:
how long are christmas holidays btw?

In Burkina Faso?

dev_vps

@ArrowBoi said:

@ViridWeb said:

@Tele2drv said:

@hostkar said:
Previously they have stopped onboarding new customers for longtime. But they have started it recently a few days ago.

Submitted documents just after they got approval from RBI

Then you've to wait. They will do that after the holidays

how long are christmas holidays btw? till the 27th?
or are we to wait until the new year is done?

assume 3-5 business days for the wait

ArrowBoi

@dev_vps said:

@ArrowBoi said:

@ViridWeb said:

@Tele2drv said:

@hostkar said:
Previously they have stopped onboarding new customers for longtime. But they have started it recently a few days ago.

Submitted documents just after they got approval from RBI

Then you've to wait. They will do that after the holidays

how long are christmas holidays btw? till the 27th?
or are we to wait until the new year is done?

assume 3-5 business days for the wait

Okay

dev_vps

@ArrowBoi said:

@dev_vps said:

@ArrowBoi said:

@ViridWeb said:

@Tele2drv said:

@hostkar said:
Previously they have stopped onboarding new customers for longtime. But they have started it recently a few days ago.

Submitted documents just after they got approval from RBI

Then you've to wait. They will do that after the holidays

how long are christmas holidays btw? till the 27th?
or are we to wait until the new year is done?

assume 3-5 business days for the wait

Okay

Dhairya ka parichay de

translation
Please have patience

ArrowBoi

@dev_vps said:

@ArrowBoi said:

@dev_vps said:

@ArrowBoi said:

@ViridWeb said:

@Tele2drv said:

@hostkar said:
Previously they have stopped onboarding new customers for longtime. But they have started it recently a few days ago.

Submitted documents just after they got approval from RBI

Then you've to wait. They will do that after the holidays

how long are christmas holidays btw? till the 27th?
or are we to wait until the new year is done?

assume 3-5 business days for the wait

Okay

Dhairya ka parichay de

translation
Please have patience

why are you telling me to have patience?

dev_vps

@ArrowBoi said:

@dev_vps said:

@ArrowBoi said:

@dev_vps said:

@ArrowBoi said:

@ViridWeb said:

@Tele2drv said:

@hostkar said:
Previously they have stopped onboarding new customers for longtime. But they have started it recently a few days ago.

Submitted documents just after they got approval from RBI

Then you've to wait. They will do that after the holidays

how long are christmas holidays btw? till the 27th?
or are we to wait until the new year is done?

assume 3-5 business days for the wait

Okay

Dhairya ka parichay de

translation
Please have patience

why are you telling me to have patience?

Look at your past 5 posts

Honestly, I don’t care even if you don’t have patience. Paperwork in India will teach you patience eventually.

ArrowBoi

@dev_vps said:

@ArrowBoi said:

@dev_vps said:

@ArrowBoi said:

@dev_vps said:

@ArrowBoi said:

@ViridWeb said:

@Tele2drv said:

@hostkar said:
Previously they have stopped onboarding new customers for longtime. But they have started it recently a few days ago.

Submitted documents just after they got approval from RBI

Then you've to wait. They will do that after the holidays

how long are christmas holidays btw? till the 27th?
or are we to wait until the new year is done?

assume 3-5 business days for the wait

Okay

Dhairya ka parichay de

translation
Please have patience

why are you telling me to have patience?

Look at your past 5 posts

Honestly, I don’t care even if you don’t have patience. Paperwork in India will teach you patience eventually.

what about it? I am clearly waiting. There's no need to be aggressive.

Asking for how long they'd be away doesn't mean I don't have patience. There's no need to be aggressive mate.

dev_vps

@ArrowBoi said:

@dev_vps said:

@ArrowBoi said:

@dev_vps said:

@ArrowBoi said:

@dev_vps said:

@ArrowBoi said:

@ViridWeb said:

@Tele2drv said:

@hostkar said:
Previously they have stopped onboarding new customers for longtime. But they have started it recently a few days ago.

Submitted documents just after they got approval from RBI

Then you've to wait. They will do that after the holidays

how long are christmas holidays btw? till the 27th?
or are we to wait until the new year is done?

assume 3-5 business days for the wait

Okay

Dhairya ka parichay de

translation
Please have patience

why are you telling me to have patience?

Look at your past 5 posts

Honestly, I don’t care even if you don’t have patience. Paperwork in India will teach you patience eventually.

what about it? I am clearly waiting. There's no need to be aggressive.

Asking for how long they'd be away doesn't mean I don't have patience. There's no need to be aggressive mate.

Time is the most ruthless teacher.

HostEONS

@dev_vps said:

@ArrowBoi said:

@dev_vps said:

@ArrowBoi said:

@dev_vps said:

@ArrowBoi said:

@ViridWeb said:

@Tele2drv said:

@hostkar said:
Previously they have stopped onboarding new customers for longtime. But they have started it recently a few days ago.

Submitted documents just after they got approval from RBI

Then you've to wait. They will do that after the holidays

how long are christmas holidays btw? till the 27th?
or are we to wait until the new year is done?

assume 3-5 business days for the wait

Okay

Dhairya ka parichay de

translation
Please have patience

why are you telling me to have patience?

Look at your past 5 posts

Honestly, I don’t care even if you don’t have patience. Paperwork in India will teach you patience eventually.

He aint' getting International merchant account approval with Razorpay like this

They will probably just approve a local payment gateway since Indian cards need 3DS authentication so they quickly approve local merchant account but for international they need lot more paper work and they usually expect some history or experience with dealing with global cards and payments and FRAUD

Stripe may approve Global merchant account but they are also going to keep atleast 2-3 week of hold and will need lot more paper work

Without GST they won't approve it ... as GST is a must when you are into exports of any kind ...

And trust me it's of not worth trying to explain this to over enthusiastic young blood ... they won't listen and need to actually experience it before they understand it

ArrowBoi

@HostEONS said:

@dev_vps said:

@ArrowBoi said:

@dev_vps said:

@ArrowBoi said:

@dev_vps said:

@ArrowBoi said:

@ViridWeb said:

@Tele2drv said:

@hostkar said:
Previously they have stopped onboarding new customers for longtime. But they have started it recently a few days ago.

Submitted documents just after they got approval from RBI

Then you've to wait. They will do that after the holidays

how long are christmas holidays btw? till the 27th?
or are we to wait until the new year is done?

assume 3-5 business days for the wait

Okay

Dhairya ka parichay de

translation
Please have patience

why are you telling me to have patience?

Look at your past 5 posts

Honestly, I don’t care even if you don’t have patience. Paperwork in India will teach you patience eventually.

He aint' getting International merchant account approval with Razorpay like this

They will probably just approve a local payment gateway since Indian cards need 3DS authentication so they quickly approve local merchant account but for international they need lot more paper work and they usually expect some history or experience with dealing with global cards and payments and FRAUD

Stripe may approve Global merchant account but they are also going to keep atleast 2-3 week of hold and will need lot more paper work

Without GST they won't approve it ... as GST is a must when you are into exports of any kind ...

And trust me it's of not worth trying to explain this to over enthusiastic young blood ... they won't listen and need to actually experience it before they understand it

I already know I won't be able to accept international payments with razorpay cuz I don't got GST. I'm just gonna use it for selling locally and why do you both keep thinking I don't have patience? I've patiently been waiting since sunday and I don't have any problem with waiting for another week if thats how long razorpay is going to take due to holidays.

I don't understand why the other user has to be soo aggressive and keeps telling me to wait as if I am not waiting.

dev_vps

@HostEONS said:

@dev_vps said:

@ArrowBoi said:

@dev_vps said:

@ArrowBoi said:

@dev_vps said:

@ArrowBoi said:

@ViridWeb said:

@Tele2drv said:

@hostkar said:
Previously they have stopped onboarding new customers for longtime. But they have started it recently a few days ago.

Submitted documents just after they got approval from RBI

Then you've to wait. They will do that after the holidays

how long are christmas holidays btw? till the 27th?
or are we to wait until the new year is done?

assume 3-5 business days for the wait

Okay

Dhairya ka parichay de

translation
Please have patience

why are you telling me to have patience?

Look at your past 5 posts

Honestly, I don’t care even if you don’t have patience. Paperwork in India will teach you patience eventually.

And trust me it's of not worth trying to explain this to over enthusiastic young blood ... they won't listen and need to actually experience it before they understand it

That is why I wrote in earlier post
“Time is the most ruthless teacher”

— disclaimer
I teach AP Calculus and IIT JEE Mathematics

ArrowBoi

@dev_vps said:

@HostEONS said:

@dev_vps said:

@ArrowBoi said:

@dev_vps said:

@ArrowBoi said:

@dev_vps said:

@ArrowBoi said:

@ViridWeb said:

@Tele2drv said:

@hostkar said:
Previously they have stopped onboarding new customers for longtime. But they have started it recently a few days ago.

Submitted documents just after they got approval from RBI

Then you've to wait. They will do that after the holidays

how long are christmas holidays btw? till the 27th?
or are we to wait until the new year is done?

assume 3-5 business days for the wait

Okay

Dhairya ka parichay de

translation
Please have patience

why are you telling me to have patience?

Look at your past 5 posts

Honestly, I don’t care even if you don’t have patience. Paperwork in India will teach you patience eventually.

And trust me it's of not worth trying to explain this to over enthusiastic young blood ... they won't listen and need to actually experience it before they understand it

That is why I wrote in earlier post
“Time is the most ruthless teacher”

— disclaimer
I teach AP Calculus and IIT JEE Mathematics

right, but there's no reason to tell me that. I have been waiting and have no problem with waiting further.

Also which school/college do you teach at? I'm curious.

HostEONS

@ArrowBoi said:

@HostEONS said:

@dev_vps said:

@ArrowBoi said:

@dev_vps said:

@ArrowBoi said:

@dev_vps said:

@ArrowBoi said:

@ViridWeb said:

@Tele2drv said:

@hostkar said:
Previously they have stopped onboarding new customers for longtime. But they have started it recently a few days ago.

Submitted documents just after they got approval from RBI

Then you've to wait. They will do that after the holidays

how long are christmas holidays btw? till the 27th?
or are we to wait until the new year is done?

assume 3-5 business days for the wait

Okay

Dhairya ka parichay de

translation
Please have patience

why are you telling me to have patience?

Look at your past 5 posts

Honestly, I don’t care even if you don’t have patience. Paperwork in India will teach you patience eventually.

He aint' getting International merchant account approval with Razorpay like this

They will probably just approve a local payment gateway since Indian cards need 3DS authentication so they quickly approve local merchant account but for international they need lot more paper work and they usually expect some history or experience with dealing with global cards and payments and FRAUD

Stripe may approve Global merchant account but they are also going to keep atleast 2-3 week of hold and will need lot more paper work

Without GST they won't approve it ... as GST is a must when you are into exports of any kind ...

And trust me it's of not worth trying to explain this to over enthusiastic young blood ... they won't listen and need to actually experience it before they understand it

I already know I won't be able to accept international payments with razorpay cuz I don't got GST. I'm just gonna use it for selling locally and why do you both keep thinking I don't have patience? I've patiently been waiting since sunday and I don't have any problem with waiting for another week if thats how long razorpay is going to take due to holidays.

I don't understand why the other user has to be soo aggressive and keeps telling me to wait as if I am not waiting.

You need to talk to a Chartered Accountant

Without GST you even cannot sell in India except for your own state only

As the 10L or 20L sale exemption is only for local sales as far as I know

IF you are selling outside your state you need GST

You are even not researching how you will sell in domestic market, hence you appear as impatient

When you start a business you just don't jump in blindly, take help of a proper consultant, understand the local law, tax etc... first

ArrowBoi

@HostEONS said:

@ArrowBoi said:

@HostEONS said:

@dev_vps said:

@ArrowBoi said:

@dev_vps said:

@ArrowBoi said:

@dev_vps said:

@ArrowBoi said:

@ViridWeb said:

@Tele2drv said:

@hostkar said:
Previously they have stopped onboarding new customers for longtime. But they have started it recently a few days ago.

Submitted documents just after they got approval from RBI

Then you've to wait. They will do that after the holidays

how long are christmas holidays btw? till the 27th?
or are we to wait until the new year is done?

assume 3-5 business days for the wait

Okay

Dhairya ka parichay de

translation
Please have patience

why are you telling me to have patience?

Look at your past 5 posts

Honestly, I don’t care even if you don’t have patience. Paperwork in India will teach you patience eventually.

He aint' getting International merchant account approval with Razorpay like this

They will probably just approve a local payment gateway since Indian cards need 3DS authentication so they quickly approve local merchant account but for international they need lot more paper work and they usually expect some history or experience with dealing with global cards and payments and FRAUD

Stripe may approve Global merchant account but they are also going to keep atleast 2-3 week of hold and will need lot more paper work

Without GST they won't approve it ... as GST is a must when you are into exports of any kind ...

And trust me it's of not worth trying to explain this to over enthusiastic young blood ... they won't listen and need to actually experience it before they understand it

I already know I won't be able to accept international payments with razorpay cuz I don't got GST. I'm just gonna use it for selling locally and why do you both keep thinking I don't have patience? I've patiently been waiting since sunday and I don't have any problem with waiting for another week if thats how long razorpay is going to take due to holidays.

I don't understand why the other user has to be soo aggressive and keeps telling me to wait as if I am not waiting.

You need to talk to a Chartered Accountant

Without GST you even cannot sell in India except for your own state only

As the 10L or 20L sale exemption is only for local sales as far as I know

IF you are selling outside your state you need GST

You are even not researching how you will sell in domestic market, hence you appear as impatient

When you start a business you just don't jump in blindly, take help of a proper consultant, understand the local law, tax etc... first

I understood you very well and have been reconsidering my decision to open a host, I plan to do all those after my finals are over as it'd be easier for me then to go meet whoever I need to for getting on with this project