Your parent's accountant needs India's numbers by a fixed date. We build the India entity around it.
Your parent's accountant needs India's numbers by a fixed date each month. We close the India books to that date and send the pack in the parent's own format and currency. The books must also satisfy Indian law. They have to reach the parent, usually by a fixed date each month. That means a monthly invoice to the parent. It also means a yearly transfer pricing study, GST filings, and foreign investment reports most Indian companies never touch. We run all of it, and send the parent its pack in the form its accountant needs.
- India numbers in the parent's format, on its date
- Every foreign filing tracked, on its date
- A reply the same working day
An example of how it goes.
What we do for you.
- We invoice the parent every month, on a cost-plus basis.
- Your costs plus a margin, so the India company earns for its work. The margin comes from a yearly transfer pricing study of similar companies. The report goes in by 31 October. Your income tax return follows by 30 November.
- We keep your exports free of GST.
- Services billed to the parent count as an export once the parent pays in foreign currency. Export carries no GST when a yearly letter of undertaking is on file. We file the refund claim for the GST you paid on your own purchases every period.
- We file every foreign investment report on its date.
- The parent's money into India is reported within 30 days of allotment. The yearly return on foreign liabilities and assets follows by 15 July. Both go into your filing calendar the day the money lands.
- We check tax on every payment that goes out to the parent.
- Software, services or royalties paid to the parent need the right tax withheld before the money leaves. We check whether tax has to be withheld and at what treaty rate. We complete the declaration and the certificate from a Chartered Accountant that your bank asks for before the payment goes.
- We build your monthly close to the parent's date.
- We build a pack in the parent's own format and currency. Your parent's accountant gets the numbers in the layout they already use.
- We get the Indian year end done in full.
- We get the yearly audit ready, and file income tax and ROC returns on time. Where the parent's options are held by staff in India, we tax them correctly through payroll. The ESOPs page covers how that works.
Your side of it.
Small things, sent any way you like. We do the rest.
- The parent's chart of accounts and reporting format, so the pack matches without extra work
- The intercompany agreement, or the term sheet if it is not signed yet
- The parent's bank details and the date each month it wants the numbers
A monthly fee agreed in writing before it starts, covering month end to year end, with the yearly transfer pricing study quoted alongside it.
What founders ask about an India subsidiary of a foreign parent.
What is cost plus and what margin should we use?
Cost plus means the parent pays India's costs plus a margin, so the India company earns a profit for its work. The margin comes from a yearly transfer pricing study that compares your company with similar companies. The study usually sets a band, and your margin sits inside it.
Do we pay GST on what we bill the parent?
Usually not, once the paperwork is right. Billing the parent counts as an export of services, and that carries no GST once a yearly letter of undertaking is filed. The GST you pay on your own purchases does not disappear. We file the refund claim every period.
Our parent pays for tools and India uses them. Is that a problem?
No, once it is recorded correctly. Money the parent spends on tools that India uses is still a cost between the two companies. It belongs in the intercompany agreement, and it goes into the transfer pricing study like any other cost. We record it in your books, and it goes into the yearly study, so it never turns up as a surprise later.
Can the India company keep a profit?
Yes, and it should. A cost-plus structure is built to leave the India company a profit every year, above its own costs. Both your shareholders and the tax department expect it. We build that margin into the invoice every month, so it does not wait until year end.
What do we file that a normal Indian company does not?
Three filings come only with a foreign parent, on top of what every company already does. The yearly transfer pricing study and its report go in with your tax return. Foreign investment reporting is another. The money that comes in gets reported within 30 days of allotment, and a yearly return on foreign liabilities and assets follows by 15 July. Payments going out to the parent need the tax withheld and the bank's certificate that proves it. We track all three inside the same calendar as your regular tax and ROC dates.