STRUCTURED FOR TAX EFFICIENCY, BEFORE INCORPORATION
Entity Setup & Infrastructure
The Structure Is Decided Before The Entity Is Incorporated.
India's scale is hard to match — the world's third-largest automobile and aviation markets, a middle class bigger than most nations' populations, deep talent, and costs that outcompete much of the developed world. Capturing that opportunity starts with getting the foundation right — the entity vehicle, the jurisdiction, the tax and treaty position — so your structure is efficient by design. We then build everything underneath it: facility, vendors, capital, people, as one coordinated programme instead of nine separate vendors.
The Eleven Workstreams
- ✓ Entry Structure, PE & Tax Residency Strategy
- ✓ Legal Entity Incorporation
- ✓ Manufacturing Facility Setup
- ✓ Site Selection & Leasing
- ✓ Plant & Utility Infrastructure Planning
- ✓ Vendor & Supply Chain Ecosystem Setup
- ✓ Capital Structure & Local Debt Funding
- ✓ Banking & Treasury Setup
- ✓ Finance, Tax & Payroll Infrastructure
- ✓ Leadership & Workforce Hiring
- ✓ Work Migration & Go-Live Support
BEFORE ANYTHING ELSE
A Market Worth Entering Well — Structured Right From The Start.
India is one of the fastest-growing large economies in the world, with a domestic market of 1.4 billion people and an export engine the government is actively expanding through production-linked incentive schemes and new trade infrastructure. Capturing that opportunity efficiently starts with getting the entry right — the entity vehicle, the tax position, the treaty structure — once, at the beginning, rather than re-engineering it two years in. Get the foundation right, and every decision after it compounds in your favour.
Workstream 01 · Structuring, Before Everything Else
Liaison Office, Branch, Or Subsidiary — The Decision That Sets Everything Downstream
The right entry vehicle depends on what you're building in India — a representative presence to scope the market, or a full operating business. We help you choose the structure that matches your ambition and works in your favour on tax from day one, with the same rigor a top-tier tax advisor brings, so the choice compounds well over the life of the entity rather than needing revisiting.
Liaison Office vs Branch vs Wholly Owned Subsidiary
A Liaison Office is RBI-permitted for representative activity — liaising between head office and Indian counterparties, market research, promoting imports/exports of the parent — a low-commitment way to build market presence before committing capital. Run within that scope, it stays inside the "preparatory or auxiliary" carve-out most tax treaties provide, meaning no Permanent Establishment and no Indian tax on the foreign parent's income. We help clients keep Liaison Office activity cleanly within that scope for as long as it serves them, and plan the step-up to a Branch or WOS as a deliberate move timed to the business, not an accident triggered by an invoice that shouldn't have been raised.
A Branch Office creates a Permanent Establishment by design — the same foreign legal person operating in India, taxed on India-attributable profits at the foreign-company rate, with RBI approval scoped to specific permitted activities. A Wholly Owned Subsidiary is a separate Indian tax resident, taxed at the more favourable domestic company rate, with profits repatriated as dividends. For most operating businesses, the WOS is where the full picture — rate differential, treaty access, exit optionality — tends to land as the most efficient answer, though the right structure always depends on the specific business model rather than a default assumption.
- ✓ Liaison Office — no PE, no local revenue, RBI-restricted scope
- ✓ Branch Office — PE by design, foreign-company tax rate
- ✓ WOS — separate tax residency, domestic company rate
- ✓ Project Office — PE scoped to a specific contract only
A Complete Permanent Establishment Screen, Not Just The Entity Choice
The entity wrapper is only the starting point — a thorough PE position also covers Fixed Place PE (an office or warehouse, regardless of entity type), Agency PE (personnel who habitually conclude contracts on the foreign parent's behalf), and Service PE (foreign personnel present in India beyond the days threshold most treaties specify). We screen all three alongside the entity decision, and assess the parent's own exposure independently of the subsidiary's — a complete picture from the outset, rather than one variable checked and the rest assumed.
- ✓ Fixed Place PE screening (office, warehouse, factory)
- ✓ Agency PE review — who can conclude contracts, and where
- ✓ Service PE day-count tracking against treaty thresholds
- ✓ Parent-level PE risk, assessed independently of the subsidiary
POEM — Governance Designed To Keep The Parent's Global Position Clean
Section 6(3) of the Income Tax Act looks at where a foreign company's Place of Effective Management actually sits. CBDT Circular 6/2017 gives companies with genuinely Active Business Outside India a strong presumption that POEM sits outside India too, provided board meetings are predominantly held there. In practice, this is a governance design exercise — where the board meets, how strategic decisions are documented — that we build into the entity's operating rhythm from the first board calendar, so the foreign parent's global tax position stays exactly where you intend it, by design rather than by accident.
- ✓ Active Business Outside India (ABOI) test structuring
- ✓ Board meeting location & quorum governance design
- ✓ Key management & commercial decision-making mapped offshore
- ✓ POEM risk documentation, maintained on an ongoing basis
Accessing Treaty Benefits Through A Structure Built To Hold Up
Where the holding company sits above the Indian entity affects withholding rates on dividends, interest and royalties under India's DTAA network — a genuine, material benefit when the structure is built properly. That means real substance at the holding company level: actual decision-making, genuine personnel, a commercial rationale that stands on its own alongside the tax outcome. We structure holding jurisdictions this way from the outset — satisfying GAAR and the Principal Purpose Test under the MLI by construction, so treaty benefits are something you access with confidence, not something to defend under audit.
- ✓ Holding jurisdiction selection against India's DTAA network
- ✓ GAAR & Principal Purpose Test substance requirements
- ✓ Limitation of Benefits (LOB) clause review, where applicable
- ✓ Withholding-rate comparison across dividend, interest, royalty routes
Workstream 02 · Legal Execution
Incorporating The Structure Already Decided
By the time incorporation is filed, the entity choice, the PE position and the holding structure are already settled — this workstream executes that decision rather than defaulting to whichever vehicle is fastest to set up. A SPICe+ incorporation for a WOS typically clears in 15-20 working days when documentation is clean; DIN, DSC, PAN and TAN are secured in parallel, and the registered office, statutory auditor, first board and its governance calendar are locked in before the certificate of incorporation arrives — the same board calendar that has to support the POEM position decided in Workstream 01.
- ✓ SPICe+ incorporation filing, matched to the chosen vehicle
- ✓ DIN, DSC & PAN/TAN — filed in parallel
- ✓ Registered office & statutory auditor appointment
- ✓ First board constitution, aligned to the POEM governance plan
- ✓ Statutory registers & corporate secretarial calendar
- ✓ Corporate seal, letterheads & banking mandates
Workstream 03 · Facility Build
From Empty Shed To Running Line
A manufacturing facility is a construction project, a machinery installation project and a licensing project, all moving at the same time — and running them in parallel rather than in sequence is what gets a plant to commissioning fastest. Civil work, utility tie-ins and machinery foundation design are sequenced against equipment delivery lead times, while the factory licence, fire NOC and pollution consents are pursued alongside construction from the outset, so commissioning proceeds the moment the shed is ready.
- ✓ Civil construction & shed fit-out management
- ✓ Machinery foundation & installation sequencing
- ✓ Factory licence & fire NOC coordination
- ✓ Utility tie-ins (power, water, effluent)
- ✓ Vendor & contractor project management
- ✓ Commissioning & trial-run coordination
Workstream 04 · Location Decision
The Right City, The Right Building, The Right Terms
India's Grade-A commercial and industrial stock has grown substantially across every major hub, giving investors real choice rather than a take-it-or-leave-it market. City selection runs against the same 12-theme location framework used for the original entry decision — the full state and city scoring is in India Investment & Location Intelligence; site selection is the more granular follow-through — shortlisting specific buildings or plots, verifying title and zoning, and negotiating lease terms with the same care on the way out as the way in, so escalation clauses and renewal terms work in your favour for the life of the lease.
- ✓ City & micro-market shortlisting
- ✓ Building/plot shortlisting & site visits
- ✓ Title & zoning due diligence
- ✓ Lease negotiation (term, escalation, exit)
- ✓ Fit-out clause & landlord obligation review
- ✓ Lease registration & stamping
Workstream 05 · Utility Infrastructure
Matching Your Location To The Way You Actually Operate
India's states compete actively for investment, and that competition works in your favour — power tariffs, port access and industrial ecosystems vary meaningfully across states, and choosing well means your operating costs and logistics are optimised from day one rather than inherited by default. A power-intensive unit belongs in a state with competitive industrial tariffs and strong grid capacity; an export-heavy operation belongs near a major port, inside a logistics corridor with the customs and freight ecosystem already built around it. We map this against your specific operating profile before the site is even shortlisted, then handle the sanctioning and utility build-out that follows.
- ✓ State & tariff-zone selection matched to your power profile
- ✓ Port & logistics corridor access for export/import-led operations
- ✓ Power load calculation & DISCOM sanctioning
- ✓ Backup generation, water & effluent infrastructure design
- ✓ HVAC & fire suppression system specification
- ✓ Capacity headroom planning for future expansion
Workstream 06 · Supply Chain
A Vendor Panel Before You Need One
India's manufacturing and services supply base has deepened considerably across every major sector, giving new entrants a genuinely strong vendor ecosystem to draw on. The advantage goes to whoever builds their panel deliberately — sourcing, qualification and procurement governance set up ahead of the first purchase order gives sharper pricing and cleaner due diligence than assembling a panel reactively once production is already live.
- ✓ Vendor sourcing & qualification framework
- ✓ Procurement governance & approval matrix
- ✓ Preferred vendor panel negotiation
- ✓ Vendor risk & financial-health audits
- ✓ Logistics & freight partner onboarding
- ✓ Contract templates & SLA standardisation
Workstream 07 · Capital & Repatriation
How The Entity Is Funded Is A Tax Decision, Not A Formality
Every entity needs funding, and the funding mix — equity, related-party debt, third-party debt — carries its own tax consequences that compound over the entity's life. Interest paid to the foreign parent or an associated enterprise is subject to Section 94B: where such interest exceeds ₹1 crore, the deduction is capped at 30% of EBITDA, with the disallowed portion carried forward. Debt sourced instead from an Indian bank sits outside Section 94B entirely, since it isn't related-party borrowing — often making local debt the more tax-efficient funding leg once the entity has enough operating history to price competitively, alongside the working-capital and forex-hedging advantages of borrowing in the currency revenue is earned in.
- ✓ Capital structure design — equity vs related-party vs local debt
- ✓ Section 94B interest-limitation exposure modelling
- ✓ Local bank debt sourcing, outside the related-party interest cap
- ✓ Transfer pricing documentation for any related-party funding
- ✓ Repatriation route comparison — dividend vs interest vs royalty
- ✓ Thin capitalisation & debt-equity ratio risk review
Workstream 08 · Treasury Operations
Money Needs Somewhere To Land Before It Arrives
Corporate bank account opening for a foreign-owned entity runs on the parent's KYC as much as the entity's — beneficial-ownership documentation, board resolutions and signatory authorisations for an overseas parent routinely take longer than incorporation itself, so this starts the moment the entity is incorporated, not after the first invoice is due. Once accounts are live, treasury operations — payment approval workflows, cash management across accounts, and a forex hedging policy for import/export exposure — need to be running from the first transaction, not assembled reactively after a payment gets stuck.
- ✓ Current account opening — parent & local signatory KYC/AML
- ✓ EEFC account setup, for entities retaining foreign currency receipts
- ✓ Payment approval workflows & signatory authority matrix
- ✓ Forex hedging policy for import/export exposure
- ✓ Cash management & sweep arrangements across accounts
- ✓ Banking relationship structuring — primary & operational partners
Workstream 09 · Finance Systems
Books That Are Audit-Ready — And Transfer-Pricing-Ready — From Transaction One
Retrofitting clean accounting onto a year of informally-tracked transactions is expensive and slow — the finance stack has to be live before the first invoice is raised, and every related-party transaction has to be priced and documented as it happens, not reconstructed at year-end. GST and TDS registration, an ERP or accounting system configured to Ind AS, transfer pricing documentation for intercompany transactions (Form 3CEB where applicable), and a payroll system running statutory deductions correctly from the first payslip are all part of go-live, not a phase-two clean-up project. Internal financial controls carry their own statutory weight on top of this: the Companies Act requires the board and statutory auditor to separately report on ICFR adequacy, so approval hierarchies, segregation of duties and reconciliation cadences need to exist as a designed framework from year one — not assembled retroactively to satisfy the first audit.
- ✓ GST & TDS registration
- ✓ ERP / accounting system configuration (Ind AS)
- ✓ Transfer pricing policy & arm's-length documentation
- ✓ Payroll system setup & statutory deduction mapping
- ✓ Fixed asset register & depreciation policy
- ✓ ICFR framework design — approval hierarchies & segregation of duties
- ✓ Control testing & remediation tracking, ahead of the statutory audit
Workstream 10 · Leadership
The Country Lead Hired Before You Need One
The single most common cause of a slow first year isn't regulatory delay — it's a country head or plant leader hired too late to shape the organisation they're inheriting. Executive search for the core leadership team runs in parallel with entity setup, so there's a named decision-maker on the ground before go-live. Note too that where this person sits and what authority they hold is itself part of the PE analysis in Workstream 01 — a country head empowered to conclude contracts is a live Agency PE question, not just an org chart decision.
- ✓ Country head / plant leader executive search
- ✓ Core leadership team mapping & hiring
- ✓ Authority matrix design, aligned to the PE position
- ✓ Compensation benchmarking for the local market
- ✓ Offer structuring & background verification
- ✓ Onboarding & induction infrastructure
Workstream 11 · Transition
Move The Work. Keep The Business Running.
Go-live is the point every other workstream converges on, and getting the transition smooth is what makes all the preceding work pay off. Process discovery, SOP documentation and a pilot migration ahead of the full handover keep continuity intact through the switch. A structured 30/60/90-day hypercare period keeps the business running at full pace while the new entity finds its own rhythm, rather than treating go-live itself as the finish line.
- ✓ Process discovery & SOP documentation
- ✓ Pilot migration before full handover
- ✓ Knowledge transfer plan & sign-off
- ✓ 30/60/90-day hypercare support
- ✓ Business continuity planning during transition
- ✓ Onshore stakeholder communication cadence
LET'S TALK
Ready To Structure Before You Incorporate?
Bring us your entry plan — business model, jurisdiction, timeline. You'll get a Permanent Establishment and POEM position worked through before incorporation, and a single tracked programme for everything that follows it.
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