Do ODI forms apply to individuals or only to companies?
Both. The reporting attaches to the Indian resident making the outbound investment, and a resident individual putting money into a company abroad is inside it in the same way an Indian corporate group is. That catches arrangements people do not think of as investment: a shareholding taken in a friend's overseas venture, a stake in a joint venture, a commitment to an offshore fund. The test is not the size of the cheque, or whether the entity ever trades. It is whether a resident has acquired an interest in a foreign entity, which is decided on the facts rather than on whether anything is owed.
Who files when an Indian company sets up a subsidiary abroad?
The Indian entity making the investment reports it, and that is the beginning rather than the end. Reporting continues for the life of the investment, including annual performance reporting on the overseas entity, so somebody inside the group has to own that calendar year after year. In practice the filing is set up carefully at incorporation and then drifts, because the person who did it moves on and the subsidiary's accounts are prepared by someone abroad who does not know the Indian filing exists. Deciding at the outset which side of the group holds the obligation is what prevents the drift.
Does the annual performance report still apply if the subsidiary is dormant?
Yes. The obligation follows the existence of the investment, not its results, so a dormant holding company or a subsidiary that has never traded is still reported each year. This is the point most groups get wrong, because a dormant entity produces nothing that prompts anyone to act: no profit, no distribution, no tax to pay. The reporting still has to be prepared from the foreign entity's accounts for the year, which means those accounts have to exist even where nothing happened. A nil year is a filing, not an absence of one.
Do ODI filings cover the tax on the foreign company's profits?
No, and treating them as one thing is a common and expensive assumption. The regulatory reporting records the investment and how it has performed. Whether and when the foreign entity's profits are taxable in India is decided separately, on its own rules, and the answer can differ from what the performance reporting shows. The two do have to be run together, because they draw on the same accounts and the same shareholding history, and an inconsistency between them is easy to spot from outside. Prepared side by side, the regulatory file and the tax position describe the same investment.
Does a commitment to an overseas fund count as outbound investment?
An interest taken in a fund abroad sits in the same category as a subsidiary or a joint venture for reporting purposes, which surprises investors who think of a fund subscription as buying a product rather than making an investment. The practical difficulty is information. The reporting needs details of the entity invested in and of how the holding has performed, and a fund's own reporting cycle is not built around an Indian filing deadline. That is worth establishing before subscribing, rather than in the month a report falls due.
I am moving to Canada, do my ODI filings continue?
A change of residence is exactly the point to settle this in writing rather than assume it. The reporting obligations attach to the investor's status, and the tax analysis of the foreign entity's income runs on its own rules in each country, so emigration can change one, the other, or both, and not on the same date. What we work out is when residence actually changes under each system, what the investment's reporting calendar requires up to that point, and what Canada will want to see about the same holding afterwards. Handled together the handover is clean; handled as two unrelated questions, it usually is not.
What is a permanent establishment, and how easily do we create one?
A taxable presence in another country under the treaty — typically a fixed place of business such as an office, branch, factory or workshop, or a dependent agent habitually concluding contracts on your behalf. Some treaties add a services test measured in days. Purely preparatory or auxiliary activity is excluded, but that carve-out is narrower than it sounds: one senior employee working from home in the other country, with authority, has been enough. See business profits and permanent establishment.
Which countries have a tax treaty with the United States?
Around sixty, including Canada, the United Kingdom, India, Australia and most of western Europe — but the list matters less than the terms, because each treaty caps rates and allocates income differently. Two countries with treaties can produce opposite answers on the same pension or the same royalty. What decides your position is the specific article covering your income type. See our country guides.
