A.Sinha & Associates, Advocates

Permanent Establishment arising out of “Exploration of Natural Resources” In the absence of a specific clause pertaining to “exploration for mineral oils, natural resources” in DTAA between India and other countries in Article 5 as an exemption from being a Permanent Establishment (“PE”) through duration, the income arising from providing services related to “exploration of natural resources” in high seas or land shall be considered as a “business income” in India.   Klaus Vogel in his Commentary on Double Taxation Conventions, Third Edition(para 44, pg294)states with regard to Article 5(2),while referring to exploration of natural resources as mentioned at subparagraph (f) , that since this sub para does not include exploration and only refers to extraction of natural resources, and since it has not been possible to arrive at a common view on the basic questions of attribution of taxation rights and of the qualification of the income from exploration activities, the con...

PRINCIPLES OF ADVERSE POSSESSION The Supreme Court in the case of T.Ravi vs B.Chinna Narasimha (2017) 3 SCC (Civil) has briefly discussed the principles of "Adverse Possession" as follows: i)  Merely a bald statement that there was Adverse Possession is not enough to set up a plea of Adverse Possession.  It has to be clearly set out from which date it commenced and became hostile when there was repudiation of the title. ii) There are 3 classic requirements of plea of Adverse Possession - "Nec Vi", "Nec Clam" and "Nec Precario" meaning peaceful, open and continuous respectively and it is important to plead and prove the same. The Supreme Court cited the case of Karnataka Board of Wakf vs Union of India (2004) 10 SCC 779 which held that when litigation was pending regarding the property, it cannot be said that the possession was peaceful or hostile in any view of the matter. The relevant paras held:   “11. In the eye of the law, an...

The Reserve Bank of India (“RBI”) has come out with new Regulations pertaining to Foreign Investment in India. The RBI vides its notification FEMA 20(R)/ 2017-RB dated 7th November 2017 has issued Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017 (“New Regulations”) to govern investment in India by Non Residents by superseding the earlier Regulations in the subject matter being Notification No. FEMA 20/2000-RB and Notification No. FEMA 24/2000-RB both dated May 3, 2000. The said New Regulations has come into effect from 7th November 2017 except provisions of proviso (ii) to sub-regulation 1 of regulation 10 of these Regulations and proviso (ii) to sub-regulation 2 of regulation 10 of these Regulations (pertaining to breach of investment limits by Foreign Portfolio Investors and NRIs respectively) which would come into effect at a later date to be notified. A quick look at the Sector Specific policy that th...

INCORPORATION OF JVC IN THAILAND - MANUFACTURING SECTOR One of our recent assignments were to assist an Indian Company (engaged in the power sector) to set up a JV Company in Thailand. The mandate given to us by the client was clear : An end-to end legal assistance and advisory in setting up the JV Company (Privately held) in Thailand (with main object of setting up a manufacturing plant) which included drafting of the JV Agreement, appointing local counsel and coordinating with bankers and auditors involved in the process. The JVC has been recently incorporated and now fully functional in Thailand. The JVC would have a 70% shareholding by the Indian Company and the rest 30% would be held by a Thai national.  The challenges were many from working out the best investment strategy to finalizing the JV Agreement and assisting in incorporating the JVC in Thailand.  This Article is intended to provide an overview of investment in Thailand. So let’s get started. ...