RBI sets up helpline for startups on fund-raising

by | posted in: Corporate Updates, Cross Border Transactions, M&As, Joint Ventures, Economy, Business Updates, Corporate Affairs | 0

With startups raising funds from a variety of offshore sources, including individuals, private equity players and crowdsourcing, the RBI has set up a dedicated helpline for advice on cross-border remittances which are subject to guidelines issued under the foreign exchange management act.

 

Although businesses are supposed to know the law before they raise capital, many of the startups are being promoted by very young and inexperienced individuals. Moreover, the amount raised by some of them run into only a few lakhs, making it difficult for them to hire law firms.

 

The helpline is actually an email ID (helpstartup@rbi.org.in) through which RBI will respond to queries. The central bank said that it will offer guidance/assistance to them for undertaking cross-border transactions within the ambit of the regulatory framework.

 

“While seeking guidance, the enterprises should provide complete information to the RBI and mention the specific issues on which they need guidance in relation to the Foreign Exchange Management regulations. This would enable the personnel attending the helpline to offer timely and effective information.”

 

In his Independence Day speech, Prime Minister Narendra Modi had announced that government would take measures to promote startups in the country. Since then, the government has sought inputs from investors like SoftBank president Nikesh Arora and Snapdeal CEO Kunal Bahl and former Infosys director Mohandas Pai. The department of industrial policy and promotion had drawn up an action plan to address concerns of entrepreneurs. One of the issues raised was the cumbersome process in complying with the Foreign Exchange Management Act (FEMA) documentation.

 

Startups usually undertake a wide range of cross-border transactions including those related to investment. Cross-border transactions of resident Indians are subject to the regulatory regime provided by the Foreign Exchange Management Act, 1999.

 

Source: http://timesofindia.indiatimes.com/business/india-business/RBI-sets-up-helpline-for-startups-on-fund-raising/articleshow/50290682.cms

Make in India: DIPP looks to include micro, small and medium industries in startup definition

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A clear definition is imperative for the government to decide which companies can draw the benefits of any scheme for startups.

The government is considering a proposal to include micro, small and medium enterprises (MSMEs) in its definition of startups to help boost the Make in India campaign. Various government departments have held a series of brainstorming sessions to discuss the definition so that the policy can be formalised. A clear definition is imperative for the government to decide which companies can draw the benefits of any scheme for startups.

The Department of Industrial Policy and Promotion (DIPP) is spearheading the exercise of formulating the startup policy, along with ministries such as finance, skill development and MSME among others. The Start-Up India initiative is scheduled to be announced by Prime Minister Narendra Modi in January 2016 and the policy needs to be finalised by then. Progress on the initiative is being monitored directly by the Prime Minister’s Office. India wants to create an ecosystem that encourages entrepreneurship and is collecting suggestions from the startup community for steps that need to be taken to ensure that the Start-Up India initiative is a success.

Including MSMEs, collectively one of the biggest employers of people in India, is seen as positive for manufacturing and therefore employment generation, key aims of the Make in India programme. Officials are also discussing specific criteria that would make an MSME eligible to be called a startup. This would determine eligibility for incentives such as fewer compliance conditions, cheaper credit and tax benefits.

“Defining (startups) is the most complex issue. It involves technology companies MSMEs and so many other sectors. We should be able to finalise something soon,” a senior government official said.

To qualify as a startup, an entity would also have to meet certain financial standards besides having a level of innovation in its product or service. “It is better to have a broader definition of startups, so MSMEs and tech-based startups can both take advantage. The moment one leaves things for interpretation, corruption will seep in,” said Gaurav Kachru, founder, 5ideas Startup Superfuel. Startups are expected to create 250,000 jobs in India by 2020, up from 80,000 now, according to a Nasscom report. The Start-Up India initiative announced by Modi in his Independence Day speech assumes significance given the thrust by the government toward employment generation.

Economic Times View: Start Up On the Ease of Doing Business Front

A wider definition of startups should broad-base attention across industries. In tandem, we need to boost knowledge-creation, innovation and entrepreneurship to better coagulate resources for startups. Otherwise, we will fail to develop a thriving ecosystem, complete with conducive state policy support. In parallel, we need suitable tax treatment and attendant rules so that startups do not see the need to go abroad to do business here in India. We need ease of doing business with the startup economy in mind

 

Source:http://economictimes.indiatimes.com/articleshow/50179566.cms

 

Integrated e-Form INC-29 for Company Incorporation and Ease of doing business

by | posted in: Company Incorporations, e-filing of MCA Returns, Corporate & Business Advisory Services, Corporate Updates | 0

INC 29Analysis of integrated e-Form INC-29 for Company Incorporation and Ease of doing business

With the introduction of the INC-29, the Ministry of Corporate Affairs (MCA) has begun to make good on its promise to improve India’s ranking on the World Bank’s Ease of Starting a Business Index to within the top 50 from the current 158.

The INC-29 form for company registration, combines the application for DIN allotment, name reservation, incorporation and even PAN & TAN, while making the process faster and simpler. As the entire incorporation process is in a single form, correct filing could mean approval in 48 hours. Compared to the old process, this helps in formation of company saving a lot of time, if properly implemented.

Purpose of the eForm – eForm INC-29 deals with the single application for reservation of name, incorporation of a new company and/or application for allotment of DIN. This eForm is accompanied by supporting documents including details of Directors & subscribers, MoA and AoA etc. Once the eForm is processed and found complete, company would be incorporated with Corporate Identification Number (CIN) and the Certificate of Incorporation would be issued. Also DINs gets issued to the proposed Directors, who do not have a valid DIN. Maximum three Directors are allowed for using this integrated form for allotment of DIN while incorporating a company.

Key Features of e-form INC-29 

  1. The integrated e-Form INC-29 is available with effect from 01.05.2015 for One Person Company, Private Company as well as Public Company.
  2. INC-29 does away with filing of multiple applications/forms saving time and payable fees.

It combines the processes relating to:-

  • Allotment of Director Identification Number (DIN) (up to three Directors),
  • Incorporation of a company, and
  • Appointment of first Directors of the company.

3. The new e-Form does away with the need for reserving a name for the company prior to applying for its incorporation.

  1. Declarations are in-built in the e-Form. Separate attachments containing such declarations are not required.
  1. The e-Form is enabled for future integration with e-Biz platform of DIPP for generating applications for PAN, ESIC and EPFO numbers on the platform and therefore provides a single interface for these applications also.

 

Forms no longer to be filed individually as per the new Form INC 29:

Continued

Indian economy can grow at 9 per cent for a decade: Professor Lawrence Summers

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India has the potential to grow at 9 per cent for a decade and 8 per cent in subsequent years if the country takes bold reform measures, eminent economist and Harvard University professor Lawrence Summers said today.

“Except India, major emerging economies seem to be losing momentum… I think if India maximises its potential, it could grow at 9 per cent for a decade, and 8 per cent a decade after that, and 7.5 per cent for a decade after that,” Summers said during a session at the Hindustan Times Leadership Summit.

Summers, who is president Emeritus and Charles W Eliot professor at Harvard University said he is very optimistic about the capacity of India but the country needs bolder reforms.

“… 9 per cent growth, decline by 0.5 per cent to 1 per cent every decade, that is my sense about India’s potential that is not my forecast for India because India would have to reform more boldly and take a whole set of steps not just at the national level but at the level of states, and even at the level of culture if it wants to achieve that potential,” he said.

Quoting IMF, Summers said India is projected to be the fastest growing economy in the world over next 5 years.

Summers’ statement assumes significance as India’s economy grew at 7.4 per cent during July-September this fiscal year, more than China’s growth rate at 6.9 per cent.

Summers, who was also US Treasury Secretary, said India should not blindly follow the so called Tiger’s economies growth model and it should give more stress in developing its services sector.

“I think India can do lot to promote manufacturing. But I don’t think it is reasonable to think India should follow South Korea’s export-led growth model.

“India has different potential and it should concentrate more on services sector,” he said.

Summers also stressed on the need of speedier and predictable decision-making in India.

“Speedy decision-making has never been an Indian hallmark. There is still too much of sense in India, that being well-connected is particularly very important in the country. If this can be worked on, nothing like it,” Summers said.

Asked whether the US Fed should raise interest rates, he said, “It is very clear. Given the current context, there isn’t any other alternative to raising interest rates,” he said.

Source: http://economictimes.indiatimes.com/news/economy/indicators/indian-economy-can-grow-at-9-per-cent-for-a-decade-professor-lawrence-summers/articleshow/50055050.cms

Government wants to reduce time for registering company

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During the past one year, Corporate Affairs Ministry has taken a number of steps, and is further streamlining processes and regulatory framework, to reduce the overall time taken for incorporating a company as a part of ‘ease of doing business’ effort, Finance Ministry has said.
The Government of India proposes to bring down the average number of days required for incorporating a company to one to two days, a move aimed at further improving ‘ease of doing business’ in the country.

During the past one year, Corporate Affairs Ministry has taken a number of steps, and is further streamlining processes and regulatory framework, to reduce the overall time taken for incorporating a company as a part of ‘ease of doing business’ effort, Finance Ministry said in a statement.
As a result of the many steps, the average number of days taken for incorporation of a company has come down significantly from 9.57 days in December, 2014 to 4.51 days in November, 2015.
“It (Ministry of Corporate Affairs) is targeting that the average number of days would be further reduced to one to two days for approval in normal cases,” the statement said.

Giving details of the step, it said the introduction of an Integrated Incorporation Form INC29 and tighter monitoring of Registrar of Companies’ (ROCs’) performance has resulted in faster approvals and lesser number of clarifications being asked from the stakeholders.
The Corporate Affairs Ministry will soon introduce a new version of Form INC29, incorporating suggestions received from the stakeholders, allowing up to five directors to be appointed and greater flexibility in proposing a name for a company, it said.

“This will allow an even more wider use of this integrated Form, which is already gaining popularity,” the statement added.

Further, the rules with regard to reserving and approving of names for companies are also being simplified, and a centralised new process will be introduced soon for strictly time bound approval of names for companies.

Source: http://www.dnaindia.com/money/report-government-plans-to-reduce-average-time-for-registering-a-company-to-1-2-days-2154784

New boost in ties with Mauritius

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President Pranab with Mauritian President Ameenah Gurib-FakimDr (Mrs) Ameenah Gurib-Fakim, the President of the Republic of Mauritius called on President Pranab Mukherjee at Rashtrapati Bhavan today.

Welcoming Dr. Ameenah Gurib-Fakim on her first visit to India, President Mukherjee congratulated her on being the first woman President of Mauritius.

President Mukherjee said people of India are delighted that Dr. Ameenah Gurib-Fakim has personal, professional and academic linkages with India.

India attaches high importance to its relations with Mauritius which has a very special place in the hearts and minds of the Indian people.

The President expressed confidence that with the achievements of the President of Mauritius in the fields of science and technology, education and innovation, Mauritius will become stronger and a new dynamism will be added to India-Mauritius bilateral relations.

The President of Mauritius conveyed her condolences to people of Chennai who are suffering on account of floods. She described Indians as brothers and sisters and not just friends.

She conveyed gratitude for India’s assistance in the development of Mauritius ever since its independence and called for a continuation of the close ties in the coming days based on institution and capacity building.

Source: http://www.facenfacts.com/NewsDetails/62269/mauritius-president-dr-ameenah-gurib-fakim-calls-on-president-mukherjee.htm

 

India signs 11 more APAs to reduce tax disputes

by | posted in: Corporate Updates, Cross Border Transactions, M&As, Joint Ventures, Income Tax,e-Filing- Individuals, Firms, Companies | 0

The Central Board of Direct Taxes (CBDT) has signed 11 more advance pricing agreements (APAs) with MNCs on Tuesday, taking the total number of such deals that would spare them from rigorous tax audits under certain conditions to 31 so far. Of this, 22 were signed this year. The department had earlier set an internal target of about 150 APAs for this year, mostly with US-based companies in the IT and ITeS sector to avoid future tax disputes. So far, it has covered about a fifth of this target. Experts expect that clearing all APA requests, applying their terms to similar past transactions and resolving disputes with foreign tax authorities under the Mutual Agreement Procedure would clear most of the accumulated cross-border tax disputes amounting to Rs 2.7 lakh crore. Till now about 45 tax disputes are resolved under the MAP procedure.

APA is an agreement between the tax authority and companies on the principles of valuation of certain transactions, which if adhered to will exempt the company from tax audits on cross-border deals. The tax disputes which the government may have with the companies on similar transactions in previous years too would be resolved by applying similar agreed upon value to past transactions. The move is part of the government’s efforts to reduce tax litigation.

According to sources, most of the APAs signed on Tuesday relate to service provider companies in the investment advisory and ITeS sectors. “The effort of the APA authorities is impressive. A lot of hard work has gone into analysing these cases and getting them to a closure,” said Vijay Iyer, Partner & National Leader for Transfer Pricing, EY which was involved in five of the 11 pacts on Tuesday.

While an APA between a company and the tax department will resolve a dispute in India, the possibility of double taxation would be fully addressed only when the tax authority in the company’s home country too becomes party to such agreement. America, which is home to many technology firms facing tax disputes in India, has recently started steps to implement such ‘bilateral APAs.’

Source: http://www.financialexpress.com/article/economy/india-signs-11-more-apas-to-reduce-tax-disputes/170136/