The market for investment opportunities and funds has grown tremendously in the Middle East over the past few years. With a large and sophisticated liquidated LP Market and Western adopted managerial practices, this section of the market has grown from pillar to pillar.
Increasing incentives and competitions has led to an increase in the equity market which has prompted for more investment outbound structures in the East. While the Middle East imposes taxes on government concession contracts, there is little or no taxation policy on withholding.
However, while investing in India, it is pertinent to note that India follows a stringent Foreign Direct Investment or FDI policy. These rules govern what businesses will be followed in India and the limit of the business.
The rules also govern what percentage of investment will be allowed in the market, directly or indirectly. For example, the power sector allows up to 100% direct investment, and the retail sector allows for up to 51% direct investment. It’s pertinent to check the amount of investment allowed in each sector.
To establish a set structure, a company can either have a liaison office, a branch office, a project office, a subsidiary company or through a limited liability partnership. A well-structured liaison machine provides for the investment to go into the right market with maximum opportunities for profit.
Profits in the market can be obtained through dividends, interest payments or return of capital.
It’s important to follow the rules and tax regulations laid down by the FDI or any other agreement to ensure a smooth transaction of resources or profits.