Frequent question: Can a company take loan from foreign company?

Can we take loan from foreign company?

An Indian entity can acquire a loan from a foreign company under two routes of investment. Automatic Route- Under the automatic route, prior approval is not required for any form of investment. Therefore a borrower can get a loan from a foreign company without the prior approval from the Government of India.

Can Indian company take loan from foreign company?

Not only an individual but an Indian company can also borrow from a foreign national or a Non- resident Indian (NRI). … The RBI is responsible for and overseas all lending and borrowing between residents of India and non- resident Indians.

Do I need to report a foreign loan?

Overseas Loans

Any interest payments must be reported on IRS Form 1042-S, Foreign Person’s US Source Income Subject to Withholding. Because interest paid to a foreign person is generally exempt from income tax, under most circumstances, no tax on the interest is owed.

Can a foreign director give loan to company?

Yes it is allowed. A company cannot give loan to director without paying tax but a director can give loan to a company. However tax has to be paid on interest paid.

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Can an individual take loan from foreign bank?

iv) A resident individual will be permitted to service loans taken overseas earlier as a person resident outside India subject to terms and conditions and limit as specified by the Reserve Bank from time to time. 9. Any borrowing under erstwhile regulations can be continued as permitted up to the due date of repayment.

Can I take loan from foreign friend?

“An Indian can only accept rupee loans from non-resident Indians (NRIs) or a person of Indian origin and not from other non-residents. “The period of loan shall not be more than three years and the interest rate is restricted to 2% over the existing bank rate,” said Parthasarathy.

Can a company borrow from NRI?

A company incorporated in India under the Companies Act can borrow money from an NRI and the borrowing can be both on repatriable and non-repatriable basis, ie the loan amount can be repaid either in India or the loan amount can be repatriated to the bank account of the NRI maintained outside India.

Can foreign company give guarantee to Indian company?

As per Regulation 5(b) of the Foreign Exchange Management (Guarantees) Regulations, 2000, “a company in India promoting or setting up outside India, a joint venture company or a wholly owned subsidiary, may give a guarantee to or on behalf of the latter in connection with its business: Provided that the terms and …

Are foreign loans taxable?

It doesn’t matter whether you borrow from your parents, a relative overseas or a bank, and it doesn’t matter how much you borrow: You don’t have to pay income tax on loans.

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Is it legal to have a foreign bank account?

There’s nothing illegal about establishing an offshore account unless you do it with the intent of tax evasion. The Foreign Account Tax Compliance Act (FATCA) requires banks around the world to report balances and any activity of American citizens to the IRS or face fines.

Can the IRS see my foreign bank account?

Yes, eventually the IRS will find your foreign bank account. … And hopefully interest and dividends from your foreign bank accounts will already be reported on your annual US tax return, including foreign disclosure forms and statements (Form 1040).