ARM LLC, a US-based company, sought to establish a joint venture in the UAE with an Indian entity, with which it already had an existing joint venture. To ensure compliance with Indian tax laws, particularly withholding tax obligations, ARM LLC engaged Majmudar & Partners for expert legal advice.

Facilitating the Transaction

Majmudar & Partners provided comprehensive assistance to ARM LLC by:

• Analyzing Withholding Tax Implications: Assessed the applicability of Indian withholding tax on payments between the Indian entity and the proposed UAE joint venture, considering the provisions of the Double Taxation Avoidance Agreement (DTAA) between India and the UAE.
• Structuring Tax-Efficient Transactions: Advised on structuring inter-company transactions to minimize tax liabilities, ensuring compliance with both Indian tax laws and international tax treaties.
• Navigating DTAA Provisions: Provided guidance on the relevant articles of the India-UAE DTAA, including those related to dividends, interest, royalties, and fees for technical services, to determine the appropriate withholding tax rates and potential exemptions.
• Ensuring Regulatory Compliance: Assisted in understanding and adhering to the Foreign Exchange Management Act, 1999, its underlying regulations and other Indian tax laws pertinent to cross-border joint ventures.

ARM LLC’s proposed joint venture in the UAE with an Indian partner was structured to ensure compliance with Indian tax laws, particularly withholding tax obligations. Majmudar & Partners’ expert guidance facilitated a tax-efficient and legally compliant framework for this international collaboration.

Majmudar & Partners specializes in providing tax advisory services for cross-border transactions and joint ventures. Contact us today to ensure your international business ventures are structured in compliance with Indian tax laws and optimized for tax efficiency.