1. Is it possible to start an LLP in India with a parent company based in Bahrain?
Yes, a foreign company can be a partner in an Indian LLP. You must comply with the Foreign Exchange Management Act (FEMA) and obtain necessary approvals from the Reserve Bank of India (RBI).
2. Can I transfer funds from XYZ LLP to ABC Limited as fees and show it as an expense in XYZ LLP's books?
Yes, you can transfer funds as fees for services or management charges, provided these transactions are genuine, at arm's length, and properly documented.
3. Is this legal, a grey area, or illegal? Will I face any problems?
It's legal if:
- The transactions have a legitimate business purpose and are not for tax avoidance.
- Fees are at fair market value (comply with transfer pricing regulations).
- Detailed records are maintained.
- Compliance with FEMA and RBI guidelines is ensured.
For detailed, personalized advice, consider a phone consultancy.
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Shubham Goyal