nortech trinity - india entry strategy 2015

WWW.NORTECHTRINITY.COM

Commercializing Technologies

Nortech trinity is a business advisory, operations, and investment company headquartered in India, with offices in US and representation in multiple countries. We enable foreign and domestic investors to navigate the local business environment, and operate in new markets and verticals to achieve exponential growth. Our single window solution delivers the 3i

insight+, investment & implementation

• Commercializing Technologies


Sectors

Transport, Supply Chain & Logistics

PPP & Infrastructure

CSR, Developmental & Policy Advisory

Technology

Agri/Food Processing & Cold Chain


The 3i

Our iNSIGHT+ vertical delivers a

comprehensive suite of research, consulting, transaction advisory market entry, situational handholding and related solutions

Our iMPLEMENTATION vertical provides the

full strategic and operational support of JCurve and our network partners for seamless project management

Our iNVESTMENT vertical manages

proprietary capital enabling us to allocate private equity based on our convictions and take a long term perspective, for participating in, or facilitating cross border investments, partnerships and joint ventures


Services


Integrated solutions

Through our local and international network of advisors, strategic partners, and domain experts we craft a combination of soft and physical solutions that are optimal for your business goals.

• Market Entry and Project Management

• Organisational Capabilities Change and Alignment

• Mergers and Acquisitions

• Finance, Restructuring and Investments


If you have the requisite resources, offerings and intent for expansion in emerging markets, but are unfamiliar with the geography or local nuances, Nortech Trinity'sUmbrella Service of representation and agency provides everything.

• Liaison Office

• Representation

• Communications and PR

• Asset Creation and Asset Management

• Operations Support

• Supply Chain & Logistics

• Project Development

Market Entry &Representation


Nortech Trinity is mandated to take equity positions in SPVs in new ventures and sectors where our involvement can create and realize inflection points. We build strategic partnerships that can add value in our existing operating businesses and operating companies. We facilitate strategic alliances- from matchmaking to transaction advisory and end-to-end execution.

• Private equity• Strategic partnerships• Transaction advisory

Joint Ventures


WORLD’S LOOKING AT INDIA

• “Congrats to @Narendra Modi and BJP,” “Look forward to working w/you/growing shared prosperity/security w/world’s

largest democracy.”

- John F. Kerry, Secretary of State , US

• “Congratulations Modi on achieving a great victory. expressed hope that India and Sri Lanka will work closely and further

strengthen their strong ties.”

- Mahinda Rajapaksa , President , Sri Lanka

• “Hope that Australia and India will work closely to further strengthen the bilateral relationship during Modi's stewardship of

the Indian Government. Looking forward to meeting Mr. Modi during the upcoming G-20 summit to be held in Australia.”

- Tony Abbot, Prime Minister, Australia

• “Congratulations Mr. Modi on emphatic electoral victory. Extended an invitation to Modi to visit UK on his way to the BRICS

summit to be held in August, 2014 in Brazil.”

- David Cameron, Prime Minister, Britain


INDIAN ECONOMYINDIAN ECONOMY

•FDI equity Inflows (April, 2013 to March, 2014): US$ 24,299 million

• World Bank sees 6.7 per cent GDP growth for India by 2015.

•Top Investing Countries FDI Equity Inflows: Mauritius, Singapore, UK, Japan, USA, Netherlands and Cyprus (as on March 2013)

• India is the third biggest economy in the world in terms of purchasing power parity (PPP)


World's largest democracy with 1.2 billion people.

Stable political environment and responsive administrative set up.

Land of abundant natural resources and diverse climatic conditions.

Investor friendly policies and incentive based schemes.

Total labour force of nearly 530 million.

Large pool of skilled manpower; strong knowledge base with significant English speaking

population.

Huge untapped market potential.

The urban population of India will double from the 2001 census figure of 290 m to

approximately 590 m by 2030

Progressive simplification and rationalization of direct and indirect tax structures.

Reduction in import tariffs.

Full current account convertibility.

Robust banking and financial institutions.

WHY INDIAWHY INDIA

WHY INDIA


Comprehensive incentives are provided by State & Central government.

Indicative list of incentives:

Rebate on cost of land

Rebate on stamp duty on sale/ lease of land

Power tariff incentives

Concessional rate of interest on loans

Investments subsidies/ Tax incentives

Backward areas subsidies

Special incentive packages for mega projects

Duty free imports for SEZ units

Service tax and income tax exemption for SEZ units

SEZ centric offering- Attractive fiscal concessions, Single window clearance, continuous supply of power at competitive rates, world class industrial and social infrastructure


INCENTIVES

India has a Tax Treaty network

with over 70 countries, which

include USA, UK, Cyprus, European

Union nations, Japan, Singapore,

Australia, Turkey etc

In general, provisions of the

domestic income-tax law or Tax

Treaty, to the extent more

beneficial may be applied by non-

residents

Treaty shopping being heavily

debated

India has entered into many agreementswith Regional Countries, to facilitategreater trade between Countries

The Agreements principally provide forlower duties on imports upon satisfyingthe test of origin of goods

Significant among the Agreements arethe SAFTA [between Pakistan, Sri Lanka,Maldives, Nepal, Bhutan and Bangladeshin operation since 1995] and IndiaSingapore (Comprehensive EconomicCooperation Agreement – CECA)implemented and effective from August2005

Free Trade Agreements also exist withSri-Lanka, Nepal and Thailand

Double taxation

avoidance

agreements :

Regional trade

agreements :


INTERNATIONAL ARRANGEMENTS

Foreign Investment in India

Permitted Sector Prohibited Sector

Automatic Route Approval Route

Investment up to the % allowed in respective

sector

Approval of prescribed Regulatory Authority

No investment is allowed


FOREIGN INVESTMENT IN INDIA

►Department of Industrial

Policy and Promotion

(DIPP)

►Government body that

formulates FDI Policy and

facilitates FDI, formulates

industrial policy and

strategies for industrial

development

►Monitors industrial growth

and performance of

industries

►Foreign Investment

Promotion Board

►Government body that

offers a single window

clearance for proposals

on FDI under the

Government Route

►Reserve Bank of India

(RBI) - Central bank of

India

►Regulates the exchange

control provisions

►Controls the monetary

policy and the Indian

Banking system

►Maintains cash reserves

and controls credit

operations in the

economy

Competent Authorities

RBI

FIPB

DIPP


COMPETENT AUTHORITIES

Entry StrategyENTRY STRATEGY

Based on the nature of activities, determine

► Form of business presence

► Applicable FDI regulations

► Need for approval from the FIPB in respect of the FDI

Review the present group structure to determine

► Need for structuring the Indian investment through an intermediate jurisdiction

► Selection of an appropriate holding company which can make the investments into India

► Review of intermediate holding company jurisdictions such as Mauritius, Netherlands and Singapore that would

provide tax efficiency

Evaluate structures from a commercial perspective to arrive at the preferred

structure for implementation


INDIA ENTRY STRATEGY

PROHIBITED SECTORS FOR FOREIGN INVESTMENTS

• Lottery Business including Government/ private lottery, online lotteries, etc.

• Gambling and Betting including casinos etc.

• Business of Chit funds

• Nidhi company

• Agricultural or plantation activities

• Real estate business, or construction of farm houses

• Except for Construction, Development Sector and Industrial parks

• Trading in Transferable Development Rights

• Manufacturing of Cigars, cheroots, cigarillos and cigarettes, of tobacco or of

tobacco substitutes

• Sectors not open to private sector investment e.g. Atomic Energy and Railway

Transport (other than Mass Rapid Transport Systems).


MULTINATIONALS – DOING BUSINESS IN INDIA

Foreign Company

Operates as a foreign company

Establishes an Indian company

BranchOfficeProject Office

Liaison Office

Wholly Owned SubsidiaryJoint Ventures

Other forms of business

Franchisee and distributor arrangements (no direct presence)

Foreign technology collaborations (no direct presence)

Limited liability partnerships introduced in India, however, Foreign Investment Promotion Board approval required for both greenfield as well as conversion

Establishes an Limited Liability Partnership


Registration for Incorporation

Import/Export Registration

HR Registration

- Name Approval- Certificate of Incorporation

- IEC- ICM

- RECMC- EPCG- SVB

- PF Registration- ESI Registration- Min. Wages Act

- Registration under Gratuity Act

Direct Tax Indirect Tax

- PAN- TAN

- Service Tax- CST- VAT

- Excise Duty

Factory License

- Approval of Factories Act, 1948- Other approvals


REGISTRATIONS / APPROVALS REQUIRED

Process Flowchart – Incorporation of Company

Obtain Director Identification Number for

proposed directors of New Co

Obtain Digital Signature Certificate in name of atleast one director of

New Co

Obtain Approval of name for New Co

(Form 1A) from (ROC)

Arrange for drafting of Memorandum and Article

of Association

Arrange for stamping of Memorandum and Article

of Association and pay necessary stamp duty

File online application for incorporation of New Co

with ROC(Form 1)

File notice of situation of registered office in Form

18

File particulars of directors/ manager/ secretary in Form 32

with ROC

Pay Registration Fees to ROC

Obtain Certificate of Incorporation of New Co

from ROC

Time involved in formation

of a private limited

company is generally 4-6

weeks


TIMELINE FOR SETTING UP COMPANY

Decide the Partners & Designated Partners for forming LLP

Obtain the Designated Partner Identification number and Digital Signature Certificate

Check Name availability for LLP and apply for name approval to ROC

Draft LLP Agreement

File incorporation documents with ROC

Obtain Certificate of Registration from ROC within 14 days of application

Time involved in formation of an LLP is around 2-3 weeks, however it may take additional 2-3 months where FIPB approval is required to be obtained for FDI into LLP


PROCESS FOR SETTING UP LLP

Corporate Advisory

Services

WIDE GAMUT OF TAXES (ILLUSTRATIVE)

Dividend Distribution tax

Customs duty

Sales tax/ Value added tax

Service tax

Excise duty

Gamut of Taxes in India

Octroi / Entry tax

R&D Cess

Indirect tax

Gift Tax

Minimum Alternate Tax

Income tax

Wealth tax

Direct tax

Securities transaction tax

Stamp duty

Levies on transactions

WIDE GAMUT OF TAXES (ILLUSTRATIVE)


RECENT FDI AMENDMENTS

Sector Existing Sectoral Cap &

Route

Revised Sectoral Cap & Route

Petroleum & Natural Gas

(Refining)

49% - Approval Route 49% - Automatic Route

Commodity Exchanges 49% (FDI + FII) - Approval

Route

49% (FDI + FII) - Automatic Route

Power Exchanges 49% (FDI + FII) - Approval

Route


Asset Reconstruction Company 74% of paid-up capital of

ARC

(FDI+FII) (Approval Route)

100% of paid-up capital of ARC

(FDI+FII)

Up to 49% Automatic Route Beyond 49% - Approval Route

Credit Information Companies 49% (FDI + FII) - Approval

Route

74 % (FDI + FII) - Automatic Route

Stock Exchanges and Clearing

corporations

49% (FDI + FII) - Approval

Route


Telecom

(Basic and Cellular Services etc)

74% - Approval Route 100%;

Up to 49% - Automatic Route Beyond 49% - Approval Route

Courier Services 100% - Approval Route 100% - Automatic Route

Defense

[Foreign Investment in State of the

Art Technology Manufacturing]

26% - Approval Route Cabinet Committee on Security may approve proposals on case to

case basis beyond 26% which are likely to result in access to modern

and state of the art technology in the country.


• Assets - operating businesses and proprietary

assets mandated to invest in JVs

• Network - strong relationship with Government

and Industry bodies

• Context - insightful knowledge of the local

business, regulatory and operational environment

Why you should rely on us

History of international partnerships


Global Reach


nortech trinity - india entry strategy 2015

Business

business advisory

investment vertical

strategic alliances

new ventures

implementation vertical

insight vertical

seamless project management

local business environment