Trading through a foreign company
Trading through a foreign company can offer benefits like access to global markets and potential tax advantages, but it also presents complexities and risks. It’s crucial to understand the legal, financial, and regulatory landscape in both India and the foreign country involved.
1. Establishing a Presence:
Indian Entity:
A foreign company can set up a subsidiary or branch in India, becoming an Indian entity. This involves registering with the Ministry of Corporate Affairs (MCA) and complying with Indian laws.
FDI Regulations:
Foreign Direct Investment (FDI) regulations, governed by the Reserve Bank of India (RBI) under the Foreign Exchange Management Act (FEMA), must be adhered to for foreign investments and transactions.
2. Trading Options:
Direct Investment:
Indian residents can invest in foreign stocks through various avenues, including:
Indirect Investment:
Diversifying into foreign markets without direct investment through: