Foreign Currency Accounts by a person resident in India Regulations

To
All Category – I Authorised Dealers and Authorised Banks
Madam / Sir,
Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2015 Attention of Authorised Dealers Banks is invited to the Foreign Exchange Management (Foreign Currency Accounts by a person resident in India) Regulations, 2015, notified vide Notification No. FEMA 10(R)/2015-RB dated January 21, 2016, and A.P (DIR Series) Circular No. 51 dated February 11, 2016 with respect to regulatory relaxation for startups.
2. In line with the Government of India’s startup initiative, it has been decided that an Indian startup, having an overseas subsidiary, may open a foreign currency account with a bank outside India for the purpose of crediting to the account the foreign
exchange earnings out of exports/sales made by the said startup or its overseas subsidiary. The balances held in such accounts, to the extent they represent exports from India, shall be repatriated to India within the period prescribed for a realization of exports, in Foreign Exchange Management (Export of Goods and Services) Regulations, 2015 dated January 12, 2016, as amended from time to time.
3. In addition, payments received in foreign exchange by an Indian startup arising out of sales/ export made by the startup or its overseas subsidiaries will be a permissible credit to the Exchange Earners Foreign Currency (EEFC) account maintained in India by the startup.

MINISTRY OF SHIPPING SETS SAGARMALA PROGRAMME  IN MOTION BY EMPANELING LAW FIRMS

MINISTRY OF SHIPPING SETS SAGARMALA PROGRAMME IN MOTION BY EMPANELING LAW FIRMS

Sagarmala Programme of Ministry of Shipping, Government of India will partake investments of approximately US$ 123.08 billion (INR 8 Lakh Crore) in the area of port modernization, new port development, port connectivity enhancement, port linked industrialisation and   coastal community development over the period 2015 to 2035. According to a Press Information Bureau release, as per the approved implementation plan of the programme, the 415 projects under Sagarmala are to be taken up by the central line ministries, state governments / maritime boards and SPVs, preferably through the private sector and Public Private Participation (PPP) wherever feasible. Out of 415 projects under the umbrella of Sagarmala, 199 focus projects are to be taken up during the Financial Years 2016-17 to 2018-19.

This ambitious programme of Government of India involves setting up of mega ports, Coastal Economic Zones, development of Port-Linked Industrial Clusters, Coastal Economic Unites and Export Oriented Units etc. to develop Indian coastline as Coastal Economic Regions across 14 regions in India. With a renewed focus  of the ministry on the programme, the Ministry of shipping is setting up the ground work and has hired some of the prominent Indian law firms to assist in the implementation of the various projects.

Singhania & Partners is one of the select few firms that has been empanelled as the legal advisors under this programme. According to the Managing Partner, Ravi Singhania, “ The firm will be assisting the ministry as legal counsels in the area of legal due diligence, drafting of transaction documents and advise/assistance in negotiation of the contracts with the SPVs.  We are confident to add a lot of value in our role as we are also legal advisors to Indian Railways, Gujarat Maritime Board, ISGEC Heavy Engineering Ltd, Ministry of Road Transport and Highways, National Highways Authority of India, Power Finance Corporation, Rural Electrification Corporation, Karnataka State Highways Improvement Project (KSHIP), National High Speed Rail Corporation Ltd.(NHSRCL), IJM Corporation, Berhad, Mumbai International Airport Ltd., Punj Lloyd and India Posts Payment Bank. Etc.”

SINGHANIA’S TEAM SUCCESSFULLY CONTESTED THE CLAIMS ON PAYMENT OF GRATUITY

SINGHANIA’S TEAM SUCCESSFULLY CONTESTED THE CLAIMS ON PAYMENT OF GRATUITY

A team led by Vikas Goel (Partner),  Sunil Kumar and assisted  by Kunal Dutta (Principal Associate) was successful in contesting the claims on payment of gratuity by an ex-employee of UK  based leading Publishing House . The ex-employee of this company of international repute, demanded payment of gratuity after full and final settlement. The Controlling Authority allowed the claim nearing Rs. 2 crore but the Appellate Authority modified the order of the Controlling Authority and confined the entitlement of the employee to Rs. 10 lakhs i.e maximum amount of gratuity payable to any employee under the Payment of Gratuity Act, 1972 with interest of 10% p.a.

 

Hybrid Financial Instruments

Hybrid Financial Instrument

The hybrid financial instrument is designed to take into account – share ownership, capital markets, and business culture. In cross-border transactions, the companies try to take advantage of the difference in tax policies of various jurisdictions with the use of hybrid instruments. The instruments are designed such that they are treated as debt in one jurisdiction and as equity in the other to take advantages of both the categories. This paper takes three parameters, i.e. tax, corporate governance and future access to capital in the design of the hybrid financial instrument.

TAX – CONSIDERATIONS

Debt and equity are treated differently in tax law. Debt is met with a relatively preferential treatment compared to equity since interests paid on debt are tax deductible. From this principle, the ideal logic would be that the optimal capital structure must be all debt. However, it is not so; the tax rate is cheaper on dividends paid to the investor than the interested company pay on the capital raised via debt. The company will convince its investors of the benefit by raising capital by debt because of tax benefits. However, a problem arises as there exists a confusion over how to classify, for tax purposes, instruments that do not closely straightforwardly resemble ‘ordinary’ debt or ‘ordinary’ equity i.e. hybrid instruments.

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Rohit Jain

Profile

Telephone+91 1147471417
 

Rohit Jain

Senior Associate


Rohit Jain is a Senior Associate at Singhania and Partners LLP, one of the top tier firms in the country with 70 fees earners and offices in New Delhi, Bengaluru and Hyderabad. He is currently working out of their New Delhi office and is advising clients on issues relating to commercial contracts, general corporate advisory and dispute resolution. Rohit advises clients on commercial disputes and regularly appears before the NCLT, Delhi High Court and the Supreme Court of India.

Rohit started his career with the law firm Shardul Amarchand Mangaldas Suresh S. Shroff & Co. (Erstwhile Amarchand Mangaldas Suresh S. Shroff & Co.) where he worked with the Corporate and Intellectual Property teams and advised clients on intellectual property licensing issues. A qualified engineer, Rohit actively participates and advises clients on technology related issues especially, in the areas of energy efficiency. Rohit is on the panel of Bureau of Energy Efficiency (BEE), Ministry of Power and has been advising it on issues arising under the PAT Scheme relating to enhancing efficiency of heavy energy consumption industries in the country.

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Rohit has been advising World Bank since 2014 on Company Law issues and has been recently awarded for his contribution in the 2018 edition of their annual publication “Doing Business in India”. Besides, he represents National Highways of India, Ministry of Road, Transport and Highways, in various contractual disputes and arbitrations and advises on various contentious as well as non-contentious legal issues. He provides both hands-on legal advice and overall strategic inputs to reflect the clients’ interest at all times.

A recent article by Rohit on ‘Hybrid Instruments’ has made it to the ‘Capital Markets’ special issue of the Chartered Secretary Journal. Rohit has been associated with startups since his college days at IIT Kharagpur where he had his own startup named, CLIP (acronym for Corporate, Litigation and IP) that provided advise on IP and agreements to engineering students who were early stage entrepreneurs. Since 2015, Rohit has been associated with IIM Calcutta Innovation Park (IIMCIP) and has been advising IIMCIP and its incubatee on all kinds of legal issues including compliances, contracts, trademarks, legal opinions etc.

Rohit is also on the advisory board of a number of startups and advises many startups regularly on different issues.

Practice Areas

Clients

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Amway

N

Bureau of Energy Efficiency

N

IDBI Bank

N

IIMCIP

N

Ingram Micro

N

Master Trust Limited

N

National Highways Authority of India

N

Propel Education

N

RCI

N

Sanmina SCI Technology

N

Sig Sauer, Inc.

N

Sri Maruti Wind Park Developers

Memberships

N

Delhi High Court Bar Association

N

Indian Institute of Engineers

N

International Pacific Bar Association

N

TerraLex

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