May 14 – Looking to further break into the Indian market, Hilton Hotels has committed to expand its mid-market and luxury brands in the country.
Hilton, which already has established various hotels in India, recently acquired an additional number of properties on which it looks to open up and develop hotels for its luxury brand, Conrad, and its mid-market brands Doubletree and Hilton Garden Inn. Hilton is also looking to introduce its world-renowned Waldorf Astoria brand to India in the near future.
“We are on equal footing with our competitors both from the perspective of the number of hotels trading and the number of hotels that are actually going to come up in the next one or two years. By the end of this year, we expect 17 hotels to be trading, and we have the second largest pipeline of hotels in the Asia Pacific region with 21 hotels in various stages of construction,” said Guy Hutchinson, Hilton Worldwide’s Vice-President of India Operations. Continue reading
By Gunjan Sinha, Dezan Shira & Associates, Delhi Office
May 13 – India was one of the first countries in Asia to recognize the effectiveness of the export processing zone model in promoting exports, establishing Asia’s first processing zone in Kandla in 1965. More recently, the Indian government moved to increase India’s attractiveness as a foreign direct investment destination by announcing its Special Economic Zones (SEZs) Policy in April 2000, and then followed that up with the SEZ Act 2005 and SEZ Rules, which jointly came into effect on February 10, 2006. The new rules further simplified and streamlined the utilization of SEZs, paving the way for the popularity these zones now enjoy. Today, the SEZ is the predominant development zone type throughout India, and its goals include:
- Generating additional economic activity;
- Promoting exports of goods and services;
- Promoting investment from domestic and foreign sources;
- Creating employment opportunities; and
- Developing infrastructure facilities. Continue reading
May 10 – The new issue of Asia Briefing Magazine, titled An Introduction to Development Zones Across Asia, is out now and will be temporarily available as a complimentary PDF download on the Asia Briefing Bookstore throughout the months of May and June.
The use of development zones in their different guises has been an effective model essentially brought to prominence by China over the past 25 years to help both foreign investors and domestic companies meet in a relationship that provides tax advantages to both. Development zones typically permit the foreign investor to bring component parts into a country for assembly without having to pay import duties. Investors may then add in locally-sourced components, assemble the final product, and warehouse it all duty free before then having the option of exporting the finished product (collecting some VAT rebates on the locally sourced portion) or entering the domestic market with a product assembled at local labor costs. Continue reading
May 9 – Last week, the Bombay Stock Exchange (BSE) became India’s first stock exchange to launch an Islamic-focused Index, calling it the S&P BSE 500 Shariah Index. The Shariah Index will be the first index launched since S&P Dow Jones and BSE announced their strategic partnership in February, joining a long list of well-known indices around the globe.
Its main differentiating feature will be its compliance with Islamic canonical law in choosing investments. This will allow for further inclusion of India’s estimated 170+ million Muslims in India’s markets, providing them with certainty in not violating religious law with their investments.
The index will specifically exclude firms dealing with pork or tobacco products, newspapers and other media firms, any businesses dealing in alcohol or pornography, and other firms dealing in products incompatible with Islamic standards. Most notably, since Islamic law forbids gambling, derivatives, futures, and other similar financial products will not be eligible for this index. Continue reading
By Manoj Kumar & Chris Devonshire-Ellis, Dezan Shira & Associates
May 7 – India is often perceived as an investment destination full of red tape and bureaucracy, yet in fact with some attention to detail, the legal and financial operational procedures can be relatively easily expressed – if you know what you are doing. As always, forearmed is forewarned, and any successful business should have its operational procedures laid down and working efficiently. Annual audit procedures help assess companies for purposes of taxable income, but they can also provide a working blueprint of the company which can help management evaluate company efficiencies and deficiencies.
In this article, we explain the procedures that a foreign-invested enterprise (FIEs) in India can expect to go through during the audit process, and outline some of the guidelines to prepare yourselves for the inevitable questions your auditors will have. Continue reading
May 6 – Delhi took the top spot this year in the recently released annual report from Martin Prosperity Institute measuring Global Creativity Index, called “Understanding the Creative Economy in India”.
Chandigarh, Punjab, Kerala, Goa, Mizoram, Andaman & Nicobar Islands, Puducherry and Maharashtra round out the top 9, while Haryana and Manipur tied for 10th.
The report measures India’s creativity levels throughout various regions with regard to Technology, Talent, and Tolerance (the “3Ts”).The 3Ts function as a leading indicator to measure regional potential for the 28 Indian states and 7 union territories. The report also presents both the component sub-indices of the Creativity Index and other related measures related to regional technology, talent, and tolerance. Continue reading
May 6 – The proposal by United States (U.S.) President Barack Obama to make Michael Fromen the new U.S. Trade Representative indicates a policy shift in American thinking, both in terms of trade and politics. Fromen, a Harvard graduate and former classmate of Obama, is also the U.S. Government’s chair of the U.S.-India CEO Forum, and is considered an India expert. Although the appointment is yet to be confirmed, Fromen’s nomination suggests U.S. economic policy is shifting away from China as it seeks to boost trade and ties with India.
“India is about 15 years behind China in terms of development,” says Chris Devonshire-Ellis, Founding Partner of Dezan Shira & Associates. “It is sometimes perceived as being hampered by its slow pace of reform. Yet it should be remembered that this is partly due to it being democratic, and with an independent judiciary and rule of law. India can and does offer many routes into the huge Indian market in ways that China cannot.” Continue reading
By Sondre Ulvund Solstad
May. 3 – India will cut the tax rate on income earned by non-residents from investments in corporate and government debt. The cut is part of India’s Finance Bill which was passed by the lower house of the Indian parliament on Tuesday. Several other key changes were also announced during the session, including changes to tax on income from infrastructure bonds and loan agreements, tax residency procedures, and a clarification regarding the applicability of the wealth tax on agricultural land.
The tax cut will lower the withholding tax rate on interest earned by foreign investors on government securities and rupee-denominated corporate bonds from 20 percent to 5 percent. Taking effect from June 1, the cut will be in effect for two years. It is seen as part of Finance Minister Chidambaram’s efforts to reduce the current Indian account deficit in the short term and spur growth in the long term by increasing foreign investment. Continue reading