India Desk. Integrated legal and tax advice on doing business in the Benelux

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1 India Desk Integrated legal and tax advice on doing business in the Benelux

2 Loyens & Loeff Integrated legal and tax advice Loyens & Loeff is an independent full-service law firm specialised in providing legal and tax advice to international businesses, financial institutions and government bodies. Thanks to our legal and tax practices working closely together, we have built up a unique and very solid position in the market. Different specialists tackle issues from different sides, offering you the best advice in the most efficient way. With about 1600 employees worldwide, consisting of about 400 tax experts and about the same number of legal experts, we are capable of effectively structuring and supervising both domestic and international matters. International focus Our practices include: Taxation, including customs and VAT Corporate and M&A Banking and finance Employment law, taxes and benefits We provide our services from our six offices in Belgium, the and Luxembourg (together the Benelux ), as well as from our eleven branches based in the world s major financial centres, such as Dubai, Tokyo, Singapore, New York and London. In this way, Loyens & Loeff offers top-level advice worldwide. When providing advice on cross-border matters, we maintain close relationships with leading law firms and tax advisers around the globe. Leading the field Each year, Loyens & Loeff is awarded the highest ranking in the Tax category in the Chambers guide, Legal 500 and International Tax Review s World Tax. Also with respect to Corporate / M&A, Banking & Finance, Investment Funds, as well as many other categories, Loyens & Loeff achieves excellent results every year in the leading guides on legal and tax services providers. Chambers: With such a well-staffed operation, the firm offers advice across the complete spectrum of taxation Clients can rely on advice which is timely and of a consistently high quality A robust player throughout the Benelux region Always clear and straight to the point Legal 500: Loyens & Loeff is outstanding, with its width of services and large network of almost 400 tax specialists Expert, accurate, innovative, respectful, and swift

3 Loyens & Loeff's India Desk A specialised team for the Indian market Broad expertise and in-depth knowledge We recognise India as being one of the fastest growing economies in the world. Indian investors and traders are looking beyond their own borders for international opportunities, and India itself is successfully attracting the interest of Western companies. To meet the increasing demand for expertise in all tax and legal aspects relating to investments and trade between India and the Benelux, Loyens & Loeff has set up a specialised team: the India Desk. We have been active in the Indian market for more than ten years and have gained invaluable experience in doing business in India and advising clients in India on matters of Benelux law and international tax law. We travel to India on a regular basis, to maintain close ties with our clients, Indian advisers and other business contacts. Our expertise and frequent collaboration with Indian advisory firms makes us ideally placed to advise our clients on cross border transactions between India and the Benelux. Our team pools all the expertise that we have within our firm with respect to India-related matters. Members of the India Desk are experienced in advising clients on international transactions relating to the Indian market in particular. They are experts in tax (including customs and VAT), corporate and M&A, banking and finance, as well as employment law, employment taxes and benefits (including work and residency permit issues). Dedicated experts in all major financial centres With offices in all major financial centres, Loyens & Loeff is able to identify the needs of clients worldwide and to adapt to specific demands, culture and expectations. In addition, it enables us to provide our services around the clock. The members of Loyens & Loeff s India Desk are based in the, Belgium, Luxembourg, Singapore and Dubai. We work closely together with experts in all our international offices, such as in Switzerland and the USA.

4 Example 1: Sales/marketing office in the If an India-based group wants to set up a sales/marketing office in Europe, there are several issues to consider. Will the office lead to a taxable presence permanent establishment or permanent representative in the EU country where that office will be set up? If one were to second India-resident employees to set up such an office, how would they be taxed? How does one determine the remuneration for the local sales activities, e.g. the transfer pricing aspects regarding the (Indian) goods sold through the sales office? If such an office is set up in the, a mere representative office would not qualify as a permanent establishment and therefore would not yet lead to a taxable presence in the. This can be confirmed in an advanced tax ruling (ATR). The skilled workers provisions can be applied, whereby (subject to certain conditions) Indian employees can obtain residency and work permits and be allowed to receive 30% of their salaries tax-free. If the activities exceed those of a mere representative office (or would be performed by a Dutch resident company), an advanced pricing agreement (APA) could be obtained. In this way, the tax authorities could confirm in advance the arm s-length remuneration for the local sales activities, e.g. a cost-plus or resale-minus basis if local activities are limited. Example 2: Production facilities in Belgium Loyens & Loeff s India specialists can explain everything that you need to know about the significant advantages of locating a production facility in Belgium. Belgium offers an attractive fiscal climate and well-organised and efficient customs authorities. You can discuss your tax position directly with them and apply for a tax ruling, which is binding for the tax administration. Being able to obtain a ruling allowing a downward profit adjustment for group synergies is particularly relevant for production facilities in Belgium. Also, Belgian tax law provides various tax incentives both for Research & Development and for labour, including an advantageous expat regime. Moreover, the notional interest deduction allows you to deduct fictitious interest based on the equity of the company, which offers greater possibilities to optimise the financing. Finally, Belgium has an extensive tax treaty network. Loyens & Loeff can also advise you on all employment issues that you may have to deal with regarding employees in the Benelux. Our experience Loyens & Loeff has assisted: European and US investment funds investing in Indian real estate or infrastructure projects via the and/or Luxembourg Indian clients that acquire European enterprises with both tax structuring and M&A documentation Indian clients that set up a European trade office and obtain customs licences and REACH registrations Clients that make a greenfield investment in Europe, by representing them before the local authorities and negotiating relevant tax incentives

5 Doing business in the Benelux Attractive tax climate for foreign investors The Benelux tax climate is generally very attractive for Indian investors because of: Low corporate income tax rate No withholding taxes on interest, royalties or fees for technical services No stamp duties, no capital taxes A dividend tax which is most often reduced (even to as little as 0%) Favourable special tax incentives (e.g. for R&D activities, Energy Investment Allowance, favourable tax regime for foreign skilled workers) Participation exemption: tax-exempt dividends and capital gains Advance tax rulings (ATRs) and pricing agreements (APAs) can be obtained from the tax authorities VAT deferral on goods imported into the European Union Practical and pro-active approach of the customs authorities Reduced compliance burden by filing consolidated tax returns, applying for functional currency Extensive tax treaty network (reduction of foreign withholding taxes) and bilateral investment treaty network Loyens & Loeff s India Desk is specialised in structuring cross-border matters, ensuring that all possible tax benefits are taken into consideration. Contact For more information about Loyens & Loeff, our India Desk and the services we provide, please send an to india@loyensloeff.com or contact one of the members of our India Desk directly.

6 Offices BENELUX AMSTERDAM 1) Fred. Roeskestraat ED Amsterdam Telephone Fax arnhem 4) (oosterbeek) Utrechtseweg AJ Oosterbeek Telephone Fax brussels 3) Woluwe Atrium Neerveldstraat Brussels Belgium Telephone Fax eindhoven 2) Parklaan 54a 5613 BH Eindhoven Telephone Fax luxembourg 3) 18-20, rue Edward Steichen K-Point Building 2540 Luxembourg Luxembourg Telephone Fax RotterdaM 1) Blaak GA Rotterdam Telephone Fax INTERNATIONAL ARUBA 4) ARFA Building (Suite 201) J.E. Irausquin Boulevard 22 Oranjestad, Aruba Telephone Fax CURAÇAO 4) Landhuis Arrarat Presidente Romulo Betancourt Blv 2 Willemstad, Curaçao Telephone Fax DUBAI 1) Dubai International Financial Centre (DIFC) Gate Village, Building # 10, Level 2 P.O. Box Dubai, United Arab Emirates Telephone Fax FRANKFURT 3) Barckhausstraße Frankfurt am Main Germany Telephone Fax geneva 4) Rue du Rhône 59 (1st floor) 1204 Geneva Switzerland Telephone Fax london 1) 26 Throgmorton Street London EC2N 2AN United Kingdom Telephone Fax new york 1) 555 Madison Avenue 27th Floor New York, NY U.S.A. Telephone Fax paris 1) 1, Avenue Franklin D. Roosevelt Paris, France Telephone Fax (legal) Fax (tax) singapore 3) 80 Raffles Place # UOB Plaza 1 Singapore , Singapore Telephone Fax tokyo 3) 12F, Nishimoto Kosan Kanda Nishikicho Bldg Kanda Nishikicho Chiyoda-ku Tokyo Japan Telephone (legal) Telephone (tax) Fax (legal) Fax (tax) zurich 4) Dreikönigstrasse Zurich Switzerland Telephone Fax ) attorneys at law, tax advisers and civil law notaries 2) tax advisers and civil law notaries 3) attorneys at law and tax advisers 4) tax advisers EN-IND