Litigation-Proof Cross-Border Tax & FDI Structuring Strategies: A Practical India Entry Playbook For Mid-Sized Groups

Executive Summary

This playbook offers a practical framework for mid-sized global groups entering India, covering capital structuring, treaty outcomes, PE defence, cross-border payments, GST treatment, and TP governance. It broadly covers following topics:-

1. Direct investment is usually superior for Mid-sized Groups and they don't need Singapore/ Netherland Holding Structures.
2. Several Treaties remain highly advantageous without adopting circuitous route of Parent Jurisdiction Co- Netherland/ Singapore HoldCo- India Inc
3. Choice of right instrument e.g. equity, CCDs, CCPS is relevant not only for tax structuring but also for transaction structuring, anti-dilution rights and other contractual and statutory rights.
4. What Foreign Parent Co. can do to avoid unplanned PE risk in India.
5. How tax treatment of Cross-border payments can be aligned with desired outcome with correct description, evidence, "make available" tests etc.
6. Structuring and documentation from perspective of GST.
7. Key transfer pricing issues, and why TP must match the PE and GST fact pattern to avoid unnecessary litigation.

R & D Law Chambers is a research-driven dispute resolution and advisory practice serving clients across India and internationally. We operate at the intersection of arbitration, commercial litigation, regulatory disputes, and cross- border tax and transactional issues, helping businesses and legal teams navigate high-value matters involving India. To know more about our services, you may click our services.

Introduction

Mid-sized companies enter India very differently from global conglomerates. Their focus is usually actual business operations — a JV, a subsidiary, a distributor, a contract manufacturer — not regional holding platforms. They invest directly from their home jurisdiction, rely on parent-country treaties, and need structures that are clean, defensible, and cost-efficient.

Unlike large groups (we have separately published article for inbound investment structuring for large groups), mid-size investors typically:

• cannot justify a Singapore/NL HoldCo,
• must manage PE risk with lean teams,
• combine equity with CCD/CCPS or shareholder loans,
• require simple treaty-aligned WHT outcomes,
• and must stay FEMA-compliant without complex multi-layer entities.

This article provides a practical, usable playbook for mid-sized companies covering aspects of direct investment structures, treaty optimisation, CCD/CCPS design, PE-safe models, and cross-border fee/royalty structuring

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.