Cross-border tax and FEMA advisory covers the Indian rules that apply whenever money, shares or goods cross the border: the Foreign Exchange Management Act, 1999 (FEMA) and RBI reporting, tax treaties (DTAAs), foreign direct investment (FDI) into India, overseas direct investment (ODI) by Indian residents, and India's free trade agreements. Regi Tom Antony & Associates, Chartered Accountants in Kochi since 1997, advises foreign companies, NRIs and Indian businesses on these rules and handles the filings.
By Regi Tom Antony, FCA, MBA (Australia), ACMA (UK), CGMA (USA), CISA (USA) · Law as at 24 October 2026
Most cross-border problems come from treating FEMA, income tax and transfer pricing as separate questions answered by separate people. We map the whole transaction first: which law applies, which filing is due, what tax is withheld and what the bank will ask for.
Foreign companies, NRIs and OCIs setting up or funding an Indian company, LLP or branch.
Indian companies and resident individuals setting up or buying a business overseas.
Treaty rates, foreign tax credit, residency and withholding on payments to non-residents.
Using CEPA, ECTA, TEPA and CETA duty concessions, and meeting their rules of origin.
Expats and secondees, foreign ESOPs and RSUs, foreign assets and social security agreements.
FEMA is mostly about reporting on time through your bank and the RBI's FIRMS portal. A late or missed filing is usually curable, through a late submission fee or compounding, but it holds up the next transaction until it is fixed.
| Transaction | Rules | Filing | When |
|---|---|---|---|
| Shares issued to a foreign investor | FEM (Non-debt Instruments) Rules, 2019 | Form FC-GPR | Within 30 days of allotment |
| Shares transferred between a resident and a non-resident | FEM (Non-debt Instruments) Rules, 2019 | Form FC-TRS | Within 60 days of receipt or remittance of the price |
| Company with foreign investment, or investment abroad | FEMA reporting directions | Annual FLA return | By 15 July each year |
| Investment in an overseas entity | FEM (Overseas Investment) Rules and Regulations, 2022 | Form FC, through your bank | At the time of investment |
| Holding an overseas entity | FEM (Overseas Investment) Regulations, 2022 | Annual Performance Report | By 31 December each year |
| Borrowing from abroad (ECB) | FEM (Borrowing and Lending) Regulations, 2018 | Form ECB 1 and ECB 2 return (formats revised by A.P. (DIR Series) Circular No. 23, 18 February 2026) | Before drawdown; ECB 2 as prescribed |
| Exports of goods and services | FEM (Export and Import of Goods and Services) Regulations, 2026 (FEMA 23(R)/2026-RB, amended 22 September 2026) | Export Declaration Form (EDF) through your bank; now required for services as well as goods | Services: within 30 days of the end of the invoice month; one consolidated EDF may cover the month. Proceeds realised within 9 months of shipment or invoice (12 months if invoiced in rupees), from 1 October 2026 |
| Guarantee given for or to a non-resident | FEM (Guarantees) Regulations, 2026 (FEMA 8(R)/2026-RB) | Quarterly guarantee return to your bank, in the prescribed format | Within 15 days of quarter-end |
| A filing missed or a rule breached | FEM (Compounding Proceedings) Rules, 2024 | Late submission fee or compounding application | As soon as it is found |
Summary only. Each regulation has conditions and exceptions; we check them against your facts.
India has tax treaties with over 90 countries. A treaty can lower Indian withholding on dividends, interest, royalties and fees, or give credit for tax paid abroad, but only if the paperwork is in place before the payment. The Income-tax Act, 2025 took effect on 1 April 2026 and renumbered the provisions:
UAE, Saudi Arabia, Qatar, Oman, Kuwait, Bahrain · United States · United Kingdom · Singapore · Australia · Canada · Germany · South Africa, Kenya
Services supplied to a client outside India are zero-rated if they meet the five export conditions in section 2(6) of the IGST Act: the supplier is in India, the recipient is outside India, the place of supply is outside India, payment is received in convertible foreign exchange (or rupees where the RBI permits), and supplier and recipient are not merely establishments of the same person.
File a Letter of Undertaking each year (Form RFD-11) to export without paying IGST, or pay IGST and claim a refund.
From 30 March 2026 intermediary services to overseas clients can qualify as exports, after the Finance Act, 2026 omitted section 13(8)(b) of the IGST Act.
GST under reverse charge on services from abroad, including management fees and recharges from a foreign parent.
Valuation of cross-charges between an Indian subsidiary and its group, aligned with transfer pricing.
A foreign company with a permanent establishment (PE) in India pays Indian tax on the profits attributable to it. The question usually comes up when a foreign company hires in India without setting up an entity, seconds staff, or uses a local agent.
An office, site or place at the foreign company's disposal; recent rulings, including the Supreme Court in Hyatt, read "at its disposal" broadly.
A person in India who habitually concludes contracts, or plays the principal role in concluding them, for the foreign company.
Employees or personnel furnishing services in India beyond the days set in the relevant treaty.
Employer of record, branch or subsidiary compared on PE risk, tax, payroll and control.
Choosing between an entity and other options: employer of record vs entity · branch, liaison, project office or subsidiary.
Payments between related companies in different countries, such as service fees, royalties, loans, guarantees and goods, must be at arm's length. Indian companies with international transactions file an annual accountant's report and keep transfer pricing documentation. We set the pricing policy, prepare the report and documentation, and align it with GST valuation and withholding.
More on SME Advisory: transfer pricing services.
Most sectors allow foreign investment under the automatic route, with no prior approval. Some need government approval, some have caps, and investors from countries that share a land border with India need approval under Press Note 3 (2020).
Automatic or government route, sectoral caps and conditions, and downstream investment by Indian companies with foreign ownership.
Subsidiary, LLP, joint venture, or a branch, liaison or project office, compared on tax and control.
Valuation for share issues and transfers, including deferred consideration, KYC and bank documents, FC-GPR and FC-TRS.
Since 12 June 2026, any individual resident outside India can invest in listed Indian equity through a repatriable rupee account, within the limits set by the amended NDI Rules.
FLA returns, transfer pricing, withholding on payments to the parent, and profit repatriation.
Setting up a new company in India? Our dedicated site has guides by country and entity type: FDI entry routes · wholly owned subsidiary · profit repatriation.
The Overseas Investment Rules and Regulations, 2022 decide whether an investment abroad is direct (ODI) or portfolio (OPI), who may make it, how much, and what must be reported each year.
More detail on SME Advisory: ODI advisory · ODI compliance and reporting · ODI compliance guide.
A resident (other than an RNOR) must report foreign bank accounts, shares, property and income in Schedule FA and Schedule FSI of the Indian return. Missing them can attract a ₹10 lakh penalty under the Black Money Act, 2015, though that penalty does not apply where the foreign assets other than immovable property total ₹20 lakh or less.
A one-time window to declare unreported foreign assets and income, open until 31 December 2026.
FAST-DS 2026 guide →Perquisite tax on vesting or exercise, overseas portfolio investment under FEMA, Schedule FA and foreign tax credit on sale.
ESOPs and RSUs guide →Nil up to ₹10 lakh a year in total; above that 20% for investment and 2% for education and medical treatment.
TCS on LRS guide →The India–UK Double Contribution Convention took effect on 15 July 2026, with exemption for posted workers for up to five years.
India–UK social security guide →Returning NRIs and residential status: see NRI Blueprint.
An FTA lowers customs duty on goods that meet its rules of origin. It does not change income tax; that is the treaty's job. Importers claiming a concession must also hold the origin evidence required by CAROTAR, 2020.
| Agreement | Partner | In force from |
|---|---|---|
| CEPA | United Arab Emirates | 1 May 2022 |
| ECTA | Australia | 29 December 2022 |
| TEPA | EFTA: Switzerland, Norway, Iceland, Liechtenstein | 1 October 2025 |
| CEPA | Oman | 1 June 2026 |
| CETA | United Kingdom | 15 July 2026 |
| FTA | New Zealand | 20 October 2026 |
| FTA | European Union | Concluded January 2026; signing expected December 2026, entry into force expected early 2027 |
Also in force: agreements with ASEAN, Japan, South Korea, Singapore, Mauritius and SAFTA partners. India–United States: a framework was agreed in February 2026, but no trade agreement has been signed or implemented as at 24 October 2026.
Customs filings are made by your licensed customs broker; we work alongside them.
Many of our clients have a company in the UAE or Saudi Arabia and family, property or a business in India. The questions run together: where to hold the shares, how to bring profits home, how dividends and salaries are taxed in each country, and what each bank will ask for.
Regi Tom Antony held Group CFO and COO roles at OSRAM/Siemens, Westcon and Comstor across the Middle East and Africa before returning to practice.
Advice on foreign law is given with locally licensed advisers where required.
FCA, MBA (Australia), ACMA (UK), CGMA (USA), CISA (USA)
Former Group CFO and COO roles at OSRAM/Siemens, Westcon and Comstor across the Middle East and Africa. Author of NRI Tax Blueprint.
Regi Tom Antony & Associates, Chartered Accountants, Kochi, since 1997 · ICAI firm registration number 007670S
Write to us with what you plan to do: invest, set up, restructure, repatriate or trade.