Memorandum on repatriation of surplus Funds

Client Industry : Information Technology

Background :

The client was a wholly owned subsidiary of an overseas foreign entity and was engaged in the distribution of software and provision of software support services to its overseas group entities and other companies. Since the client was providing support service to its group entities, it was operating at cost plus mark-up model, due to which the client had huge accumulated profits in its book. Thus, the client needed assistance in repatriating the profits to its parent entity in most efficient manner and appointed IBA to provide the memo on the various options available for fund repatriation and executing the same.

Our Approach :

We had a discussion with the management and reviewed the financials to understand the cash flow position of the company and the funds it would require to plough back into the business and the funds which can be repatriated.

• Tax and regulatory team jointly worked to identify the most efficient option of dividend repatriation
• We drafted a memo mentioning all the possible options available to the client for repatriation of funds in most efficient manner in light of all the prevalent regulatory and tax provisions
• We also helped the client in executing the option chosen by them in terms of getting regulatory approvals and drafting the agreements, resolutions, other documents required for the said mode of repatriation and payment of applicable taxes 

Outcome/Impact : 

The client was able to repatriate the funds to its parent entity in a seamless manner based on the option recommended by us.