Business visa for a sole proprietor - ability to earn a living!

I am glad to hear that. You would then have no problem generating $190,000/year billing on a Business Visa; While $0 requirement for a PIO. Do keep in touch. You do know that there some very accomplished photographers in IndiaMike; they hangout in the photography subforum and some other ancillary threads here

I didn't actually know that - I'll take a look! Cheers.

And thanks for your help... and humour .

Hi again, after a while.

I just received an e-mail from VFS in London, who handle visa applications on behalf of the Indian High Commission. It comes from their 'higher authorities', I'm told, to whom my query was directed. They say:

"Please note that both the business letter that you will be submitting for the Indian visa, the respective companies should be a registered with the respective government.

The UK Company should be registered with Companies House and the Indian company should be registered with the government of India".

So it seems I must do what Mishka advised me not to do, if this is correct. Does anyone have any thoughts on this?

Cheers!

Does the companies house register sole proprietorships or not? My sole proprietorship was registered with the local chamber of commerce (the government recognised way of registering any form of companies). That worked for me.
Maybe we had a misunderstanding on what kind of company you wanted to register. If you wanted to register yourself as a sole proprietorship, that is fine probably. Cheap to start and easy to close that kind of entity and you dont have too many accounts duties. Registering yourself as a PvtLtd just to be able to open another PvtLtd in India seems too much.

Hi Mishka. Yes, Companies House registers businesses-of-one (as it were) as companies, and I think the legal status of the entity changes at that point, ceasing to be a 'sole proprietorship'. So mine is currently a sole proprietorship, and I am being asked to BECOME a company. In the UK, the process is very quick and easy. Instructions are here and this company even says it can do it for under £15 in just three hours.

It's a few years since I set up a UK company but I seem to remember that the Company Secretary has to have at least one share?
I photocopied a pack that a friend had bought from a Legal Stationers for his own use, gave a local solicitors' clerk £5 and a pint to hear me 'swear' and posted it off with the due fee: total cost under £25.

AndyD 8-)₹

See, the main reason I said that you should consider to not do it is because you need to comply with more rules as a company vs a private limited. Some of the rules may give you extra costs and headaches like if you need to be audited or need help with the books, extra tax burden, etc. I also don't know if you need to show any minimum capital.
Its up to you really whether you want to go for it.

Ok, that makes sense.

Meanwhile, an American I talked with recently says she's operating three businesses from India while there on a business visa, but she's not registered with the FRRO because she leaves every 180 days and isn't an Indian resident. Her businesses all deliver online from servers based outside India, mostly (but not exclusively) to non-Indian clients. All her transactions are in US dollars, never in rupees. She tells me (after much research, apparently) that FEMA only applies to NRIs (non-resident INDIANs) and applies only to transactions done in India, that she states clearly in all her contracts that US law applies (I'm not sure how my clients would feel about this one!), that tax deducted at source (TDS) applies only to salaries and various other things like lottery winnings and is NOT for companies for services provided from outside India (her server is in the US!), and is only for Indian residents (which she is not). (I was saying how several prospective Indian clients had told me they would deduct TDS before paying me even an advance.) She thinks that this whole scenario could be legitimately replicated in my case. Any thoughts on this?!

That is incorrect, there are many clauses in FEMA that refer/relate to foreigners.

Thanks, Johny Five. Do you know whether FEMA explicitly prohibits non-resident foreigners billing directly to their non-Indian bank accounts in non-Indian currencies? Or could anyone point me to the part of the Act that deals with such transactions?

Sorry, no .......but others might

The Indian Govt. are currently suing Vodaphone for $billions because they did not pay TDS on a takeover that occurred offshore between two offshore companies. They have had to introduce retrspective legislation to do this, but only because no part of any transaction took place in India.

Millions of Indians may evade tax but they ain't about to let foreigners do it.

More extensive research suggested!

AndyD 8-₹

What does operating business from India mean ? I think she is a) Mistaken b) Unaware c) Skirting the legalese... For tax purposes if she stays more than 183 days in India, she is a resident.

Why would FEMA care if Jane Doe from Brooklyn,NY who visits India every year for a month (hence a non-resident foreigner for immigration purposes) uses her AT&T iphone, to provide consulting service to Rihanna of Barbados, who then wires monies to Capital G Bank in Bermuda ? Am I missing something ??

You should be consulting a reputed tax accountant/CA in India who specialize in these matters. Because each small business operating out of India may have a different arrangement; and specially those run and operated by non locals.

This applies to you and this applies to Americans

Thanks for the double taxation avoidance link, very helpful.

Yeah, to answer you both, I don't wish to 'evade' any tax obligations. I basically wanted to understand whether what this person is doing is 'avoidance' or 'evasion'. It just seemed appealing because she gave me the impression that I could operate my UK business in India without dealing with all the red tape that registering a business in India implies.

On your Jane Doe example, nycank, I was asking because I was under the impression that if I do not need to register with the FRRO then this means I'm not considered 'resident' in India. So it's more about presence in the country for more than a certain number of days in a year (183), is it?

I am STILL trying to track down a CA who is fully versed in all this stuff as it pertains to foreigners. So far I've only managed to find some who claim to be, and then get advice that contradicts other similarly allegedly well-versed CAs' advice. Which is why I continue to consult you charming chaps . Time's running out, I need to make my application soon... .

So how would you justify your B visas?
Then you really do need to do more in-depth research**:
There are several types of 'residence' in India including resident meaning having an RP from the FRO, resident as per FEMA, and resident for tax purposes (definitions of the latter two were converging, but regrettably both the RBI and the IT Dept. are busy diverging them).

** FEMA is available in full on the web (and iirc it's on a sticky at IM or BE). The Indian Home, Immigration and Income Tax depts and the RBI all have websites.

AndyD