Registering a company in Singapore/Dubai for overseas derivatives trading


A lot of startups by Indians have registered in Singapore and operate in india. Is it possible to open a company in Singapore which trades in global forex, derivatives and commodity markets and bring that money to India ? Even if under the LRS scheme initially ?


If you incorporate a company in Singapore, how will you invest in it? Through LRS? If you invest in a company that only trades derivatives using your LRS money, technically, it is still a FEMA violation. If you find investors in Singapore to fund it, there is technically no issue with that, but there might be regulations in Singapore around raising funds there.


@nithin what if someone moves to Dubai and does trading in India … Dubai has no taxes … Is it possible ?

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Hmm…one advantage is one gets to access the US markets too

The article says you’ll still be taxed for income earned in India.

yes yes read it

Thank you @nithin for the reply. Is there any route to trade global markets and bring money to India without giving up Indian citizenship ? Whatever the taxes in India, if one is ready to pay it.

Can the government exempt any trading company if it brings good foreign money to India as profits and invest in india by trading global markets ? There are 20 global exchanges which have great leverage and liquidity and it hurts not to get a pie there. Relocating is always an option, but I don’t wanna leave the country.

Hmm… this is kind of outside my core competency.

@somnath248 maybe speak to @TAXIQ.IN or @Quicko and respond to this?

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Hey Sam,

The intent from RBI is to disallow leveraged based & speculative based trading with money sent under the LRS.

One area that could be explored, and I could not get clarity on is - if a financially regulated company in Inda (NBFC or SEBI Regulated entity) invests into a Singapore based regulated entity (need to register it with MAS as a Capital market services company) which trades the markets globally, and profits generated by the Singapore Company are sent back to the Indian company as dividend.

You would have to double check this with some consultants & with your AD Banker as well^

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@somnath248 Thank you for the reply. What type of consultants would be suitable for this ? One specializing in fema or opening overseas companies ? Also, if the trading money is big enough, would only dividends be ok ? I don’t think Indian authorities would mind if money is coming to India from outside.

@Quicko @TAXIQ.IN What are your thoughts on this ? Registering a company in Dubai, getting it funded by an investor, and that company trades in the global derivatives markets, and the Indian partners are able to bring those profits back to India as dividend ? Dubai is a freezone, so taxation only in India I guess. This would be outside Fema as direct derivatives trading is not being done.

Dubai freezone or dubai mainland is much suited or an offshore company. So if one finds an investor to fund the company, we are out of FEMA. However, how can one bring that money to India ? As dividend or profits ? This would benefit India too as foreign money would becoming here.

Hi Sam, how much capital are you looking to put into. With recent changes in regulations it is possible but don’t send money under LRS. My friend who works at a senior position with a regulator asked another senior colleague from RBI who advised not to use LRS as there might be trouble later.

What are the changes in regulations ?