Accounting and Tax Outsourcing for Foreign Portfolio Investors (FPI)

An increasingly globalized world influences investors to consider exploring foreign markets, to build a diversified portfolio that not only helps them achieve their investment objectives but also provides attractive returns.

Introduction:

 

The Indian government offers foreign investors an opportunity to invest in Indian markets through the Foreign Portfolio Investor (FPI) route. This has resulted in a steady increase in the number of FPIs registering in India and the quantum of FPI investments in India.

 

Though FIPs give attractive returns also they need to ensure that they are tax compliant in India so that there are no surprises in the future that could negatively impact the actual return earned from Indian securities. We provide FPIs valuable support to not only remain tax compliant in India but also optimize their tax cost and post-tax returns.

 

 

Why APMH?

 

We are well-known consultants for the last 35 years and are updated with the services as per the client requirements. We APMH have a dedicated team for handling FPI taxation with special accounting software like Quickbooks, Zoho Books, Xero, and Clearbooks that enable a quick turnaround time for issuing certificates for repatriation.

 

We believe in ensuring the accuracy and security of the data by providing MIS reports on a timely basis. Also, we update clients regularly about the latest developments on the tax front which may affect them in general or in particular. We have excellent networking with offshore management companies, banks, and regulators in Mauritius and GCC and have visited several countries for delivering talks on tax matters.

 

 

How can APMH help?

     

Initial FPI registration

Advise on the aspects that govern FPI investments in India i.e Regulatory framework governing FPIs, Eligibility criteria for registrations with DDPs (Designated Depository Participants), and Liaising with DDPs for FPI registration certificate.

 

Structuring FPI operations

Evaluating alternative structures for considering one valuable investment by doing proper analysis. Alternative structures keeping in mind the following:

 

– Indian Exchange Control and SEBI Regulations

– Income Tax Regulations

– Relevant Double Tax Avoidance Agreements (DTAA)

– Provisions of General Anti-Avoidance Rules (GAAR).

  1.  
  2. Assisting in setting up an entity in a foreign jurisdiction Permanent Account Number (PAN) and DSC application.
  3. Assistance FPIs in making an application for allotment of a Permanent Account Number (PAN) in India (tax registration number).
  4. Assistance FPIs in making an application for the allotment of a DSC in India which is used for filing tax returns.
  5.  

Regulatory and accounting services

• With the use of automated systems, assist clients in maintaining a record of its 

   securities in India after coordinating with DDP.

• Make note of corporate actions about securities held by the FPI and 

   factor in its impact while preparing tax computations.

• Provide regular Management Information System (MIS) reports to the FPIs for 

   their perusal.

• Computation of capital gains/losses on the sale of Indian securities and 

   interest/dividend income earned by the FPIs based on 

   scrip-wise accounting.

• Assist the FPI in representation/litigation before the Indian tax or appellate 

   authorities for assessment/ appellant/lower withholding tax 

   certificate proceedings.

Frequently asked questions

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1) What is FPI?

Foreign Portfolio investment (FPI) comprises securities and other financial assets held by investors in a different country. It does not present the investor with direct ownership of a company's assets and is relatively liquid based on the volatility of the market.

2) How they transact in Market?

Foreign Portfolio Investment (FPI) involves an investor buying foreign financial assets. It involves an array of financial assets like fixed deposits, stocks, and mutual funds. All the investments are passively held by the investors.

3) How we do accounting?

We at APMH are doing accounting for few FPIs since 2006. There are many challenges to 

Report/account transactions entered into by FPI. Generally, they have one Custodian but they deal with various Stock Brokers. Various brokers use different formats of data. We have specialized software for doing accounting for FPIs which takes care of long term and short-term Capital Gain with invested amount in the Indian Equity Market.

4) What other services do we provide to them?

We also help them for remittance of fund from India by providing them calculation of Capital Gain. We also provide them facility to file correct Income Tax return disclosing all the taxable income in India e.g. Capital Gain, Interest, Dividend etc.

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