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|8th October 2010, 11:00||#1|
Join Date: Feb 2008
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Need Advise Please: Setting Up a partnership firm overseas
Dear TBHP, I need advise.
Myself and my friend are in the process of exploring a business idea.
We have a product sourced locally in Karnataka, and neighbouring states. This product will be sold to customers overseas (exported via sea).
Now, the manufacturer of this product is a beneficiary of Vishesh Krishi Gram Upaj Yojana (VKGUY)scheme of the Central Government. According to this scheme any exporter of Agricultural/Agro based products will enjoy duty credit and maybe few other benefits.
So the manufacturer says he cannot sell his product to an Indian company as he wont get VKGUY benefits.
He is ready to sell the product to a firm registered outside India, invoicing and payment will be foreign currency.
Now, if we have to pursue this business idea, we will have to setup a partnership firm overseas, say UAE. We do not want the seller to know who the customer is as he might poach them and try to sell to them directly.
We spoke to a Chartered Accountant in UAE. He says we will register a company in UAE, address will be his office, a bank account, then we will setup a subsidiary /branch in Karnataka where we will be operating from.
- UAE firm will issue Purchase Order to supplier in Karnataka.
- Bangalore branch will act as liaison and pick up product from seller, transport it to port along with own invoice and ship it to overseas customer.
-Customer will send payment to UAE firm, seller will receive payment in foreign currency by UAE firm, profits will be transferred to Bangalore office in the form of salaries).
Honestly, I am not comfortable with the idea. Legalities, transfer of funds to and fro, and not sure if we can be directors of the firm there AND be employed at the branch in Bangalore, drawing salaries from the UAE branch.
I need advise on what is the best option to pursue this idea? If a firm can be registered overseas, can you please help with suggestions, procedures.
We are NOT specifically looking for tax havens and such. Since the seller can bill international companies only, we are left with this one choice.
(PS: we are talking to a few CAs here to understand the option. But the collective advise from TBHP members is reassuring)
Last edited by ashwinsid : 8th October 2010 at 11:09.
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