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Explore Business Opportunities in Africa through Mauritius

Africa has been steadily rising as key operator for global economy with its abundant natural resources.

As reported by the African Development Bank (AfDB), the continent has over 30% of the world’s mineral resources. The continent’s combined population of 1.2 billion will reach the working age by 2020, providing the continent an eager and young labor force.

The African economy has proven to be strong and irrepressible despite the shifts in its GDP growth rate.  In 2016, the 5.5% average GDP experienced by the Sub-Saharan African (SSA) decreased to 3.4%, however, World Bank has projected that the region has shown improvement and GDP will reach 4.1% in 2017 -2018.

Changes in the continent proved to be positive to its economy.  Its young and vibrant population has attracted the attention of international firms and investors are now shifting focus to consumer oriented industries rather than to extractive activities such as mining.  In effect, the continent will be reaping promising rewards to these changes.  African household and business to business (b2b) consumption are projected to reach $5.6 trillion in 2025, according to the Mckinsey Global Institute.  Even if the continent’s weaknesses in infrastructure can be hindrance to these rewards, this weakness is also a big vehicle for large opportunities of development.

Economy of Mauritius

One of the countries in Africa that has been a preferred choice of expanding business is Mauritius.  Known as the “Singapore of Africa”, Mauritius has attracted investors through its political and economic stability, risk mitigating avenues and defined legal and regulatory framework as well as its professional labor force and modern infrastructures.

Investors, traders and private companies can also enjoy access to different African markets through the agreements and relationships Mauritius has formed.  The country has relationships with prominent African and international organizations such as the South African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA), the World Trade Organization and the Commonwealth of Nations.  The country has also entered into network agreements, composed of 23 signed Investment Promotion and Protection Agreement (IPPAs) and 20 Double Taxation Avoidance Agreements with other African states.

The political stability of Mauritius is attained through its democratic government, a well-regulated financial services sector and an effective legal system.   The country has been ranked as no. 1 in overall governance in Africa for the past 10 years by Mo Ibrahin Index of African Governance, a comprehensive collection of data on African governance.

Its economic stability is evidenced by the sustained economic growth and economic diversity it has experienced.  The GDP of the company has been consistently growing by an annual average of 5.1% between 1977 and 2009.  Its economy is no longer dependent on the export of sugar cane but rather it is now supported by textile, financial and business services and tourism industries.

Mauritius, seeking to become a high-income economy, has been actively inviting foreign nationals and investors in to the country.  Its modern infrastructures and financial incentives boosts the country as a regional hub for international firms.

The foundation of the fiscal regime of Mauritius is its transparent system which promotes equality and its competitive tax brackets for individuals and businesses as the tax rate is at 15%.  Its regime has created separate and independent economies throughout the country.  Investors are also provided with a very tax efficient platform since there are no forex controls and foreign companies enjoy free repatriation of profits.

To fully establish its status a collaborative and responsible international financial hub, Mauritius has taken significant moves to comply with international best practices.  The country has signed with the OECD Multilateral Convention on Mutual Administrative Assistance Tax Matters in June 2015 to improve its transparency and collaboration framework.  The country is also a member of the Early Adopters Group, an organization committed to the early implementation of Common Reporting Standards (CRS).

In its efforts, Mauritius has been rated by the OECD Global Forum as a Largely Compliant Jurisdiction, making the country at par with developed countries such as the US, the UK and Germany.  It is also the first African countries to sign up to an Intergovernmental agreement with the US for the implementation of the Foreign Accounts Tax Compliance Act (FATCA). The country is also partOECD’s Inclusive Framework that seeks to implement the Base Erosion and Profit Shifting (BEPS) recommendations and promote beneficial ownership information.

Establishing Business in Mauritius

The process of establishing a business in Mauritius is easy.  The business structures differ in terms of category, nature and type of company.  Choosing a corporate form is dependent on the type, source and volume of the entity to be established.

The two main corporate forms in Mauritius are as follows:

  • Category 1 Global business license (GBC 1)
    • tax resident in Mauritius and has access its network of 43 DTAAs signed by Mauritius with African and non-African states
    • taxed at 15% for income generated within Mauritius and maximum of 30% outside the country
    • not subject to withholding tax on earnings within remitted abroad
  • Category 2 Global business license 2 (GBC 2)
    • non-tax resident
    • cannot do business within Mauritius
    • not subject to corporate taxation in Mauritius and can trade in any currency except the Mauritius rupee

Companies have the option to change its license from GBC 2 to GBC 1.

The types of company in Mauritius are as follows:

  • Company limited by shares
  • Company limited by guarantee
  • Company limited by shares and guarantee
  • An unlimited company
  • A foreign company
  • Limited life company

Ease in doing business

In World Bank Group’s Ease of Doing Business report for 2017, Mauritius ranks 49 out of 189 countries.  World Economic Forum’s Global Competitiveness Index named Mauritius as sub- Saharan Africa’s most competitive economy and ranks 45 out of 138 countries.

The advantages of doing business in Mauritius are:

  • Good banking system
  • More than a 100 accounting and auditing firms
  • No foreign exchange controls
  • A legal system based on English and French law
  • A bilingual workforce, as the main languages in the country are French and English
  • Strategic time zone

In conclusion, Mauritius has become a highly attractive country for establishing businesses especially for investors aiming to expand into Africa.  Although, the qualities that Mauritius boasts may not be an assurance for a successful business in Africa, they contribute to the likelihood for success.

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  • Newsletter

Mergers & Amalgamations Market in India to see a Growth in 2017

Introduction

The past year 2016 have not been an exciting year for Indian Mergers & Amalgamations (M & A) market with the investors acting cautiously because of uncertainty in the new Foreign Direct Investment norms and other tax reforms in the country. The first three quarters of the year 2016 have been very slow for the M& A market in the country but October 2016 have bought back the hopes as it sees total deal value of USD 4.5 billion. The sudden announcement of demonetization has made a patellar reflex on the deals in the pipeline but with the new tax reforms including GST and FDI policy are expected to give a push to M&A deals in 2017.

The Positive Side

India is a dominating country when it comes to M & A deals in the region. As per a recent M & A trend report India is becoming more influential in M & A market in Asia Pacific with M & A deals in the country are reaching a record high and amounting to a total of 8.8% of the total deals in the region, which in the highest in past one decade. The tax incentives provided in the latest budget will boost the confidence of prospective investors.

It is important to note here that mining, energy and utilities are now most active deals replacing the financial services. The Essar group deal is a key contributory with a deal value of USD 12.7 billion. Another high-profile M & A deal which can be attributed here in the merger of Makemytrip and Ibibo.

M & A deals are always a preferred route for foreign direct investment in companies facing problems of cash crunch such as companies in telecommunication and ecommerce industry. Other sector to look for quality M & A deals is renewable energy as it looks lucrative for both FDI as well as greenfield investment.

Challenges

The demonetization has forced many corporates to re consider and freshly plan their business strategies, which could slow down the deal structuring. Also, the tech deals are facing difficulties in finding the prospects as the investor are looking for more realistic valuations in the industry. Tech deals amounted for 89 deals in the year 2015 but 2016 witnessed only 56 deals, making it the largest decline among all the sectors.

Conclusion

Considering the present economic scenario and strong position of India in Asia Pacific market, 2017 should be an action-packed year for M & A professionals. The positive expectation set out by UNCTAD World Investment Report 2016 for the M & A deals in 2017 including cross border gives a reason of joy to the Indian markets.


Please feel free to contact us at [email protected] for consultation or assistance in M & A deals.

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  • Newsletter

Amendments in Oman Tax Law

Introduction

The Sultanate of Oman has recently issued a new Royal Decree which bought a wide-ranging impact on the existing income tax law in the country. This law was published in the official gazette on 26th February 2017. This article aims to share the major highlights and the impacts of the newly introduced amendments.

The major Amendments

The rate of corporation tax is increased to 15 percent from 12 percent. Accordingly, the new standard rate of 15% will apply for corporate taxation. Also, the minimum threshold limit of the OMR 30,000 has been abandoned by the recent amendments.

However, the small and medium scale enterprises have been granted some relief by allowing them to pay tax at a reduced rate. A reduced rate of tax at flat 3 percent rate will be charged from the small and medium scale businesses.

There will also be an increased filing requirements and stricter penalties for failure to fulfill the filing obligations. The defaulters can be punished by fines or imprisonment or both. Therefore, the corporates in the region should be prepared to bear extra compliance cost for filing of returns and avoid punitive actions against them.

The treatment of Withholding Tax

The new amendments now include some new sources of income which are now subject to withholding taxes. Income like receiving dividends, interest on investments and payments for services rendered are now included in the purview of withholding tax. These regulations are effective from the date of publication of new amendments in the official gazette. It is important to note that all the Omani companies paying dividends to their foreign investors are now subject to this provision. It is an important change and it will be interesting to watch out for future regulations affecting cross border corporate structuring and financing arrangement. Another notable fact is that companies situated in the free zones in Oman will not be affected by these changes.

What you Should Do?

If you are a business registered in Oman, these new amendments are certainly going to affect your business. We would like to list out a few important considerations for you to ensure your business do not face any legal complications.

  1. Review of your existing agreements with vendors outside Oman as they are now subject to withholding taxes in Oman.
  2. Checking the details of investors and lenders of the company. The payment of dividends and interest are now also subject to withholding tax in Oman.
  3. What are the tax exemptions or discretionary treatments enjoyed by the company? Will the new amendments affect these benefits in any way?
  4. Negotiate your existing cross border arrangements with vendors and investors to reduce your tax liability.

Conclusion

The new amendments will increase the burden of taxes on the corporates but the business in the region should support the Governments initiative towards a more sustainable economy. These changes will increase source of revenue generation for the government which will ultimately be passed on to the residents and business by economic reforms.

Please feel free to contact us at [email protected] for making your business 100% law complaint and avoid penal provision.

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  • Newsletter

Hong Kong Leads as the World’s Most Competitive Economy

The IMD World Competitiveness Center has again ranked Hong Kong as the world’s most competitive economy for 2 years in a row, besting 62 other countries.  Hong Kong has been consistently in the top 5 ranking in the published research for the past 4 years.  The country’s Financial Secretary Paul Chan Mo-po said that Hong Kong should strive to maintain its prevailing competitive edge, which includes open and free market principle, fine tradition of the rule of law, efficient public sector and robust institutional framework, to stay on top despite of fierce competition.

Mainland China has also made a mark on the list with having the biggest improvement, ranking 18th this year as compared to 25th last year.  This big leap is due to the country’s efforts to improve its international trade as well as developments in government and business efficiency.

Other countries in the top 5 are Switzerland, Singapore, the United States and Singapore, in second, third, fourth and fifth place, respectively.

Total 63 companies are ranked this year. The Kingdom of Saudi Arabia and Cyprus making their first appearance in the list.

Digital Competitiveness Ranking

This year, the IMD also ranked countries in digital competitiveness.  This intends to measure the different countries capability to adopt and explore digital technologies that lead to transformations in government practices, business models and society in general.  Singapore led the rankings in digital competitiveness with Sweden, the USA, Finland and Denmark, in second, third, fourth and fifth place, respectively.

Professor Arturo Bris, Director of the IMD World Competitiveness Centre, said that supportive and inclusive government institutions help mold technological innovation.

IMBD has been publishing these rankings every year since 1989, using 260 indicator including economic performance, government efficiency, business efficiency and infrastructure.  Information used includes data from national employment and trade statistics and survey responses.

Please feel free to contact us at [email protected] for setting up your business in top most economies of the world.

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  • Newsletter

New Developments in Nigerian Corporate Laws

Introduction

The lawmakers and regulators in Nigeria are making efforts to attract more and more investors. Recent developments in the corporate laws and introduction of new forms by the Corporate Affairs Commission (CAC) is a proof of that. This article shall highlight some important developments and the introduction of new forms.

New Developments

Introduction of new form CAC 1.1 for incorporation of new companies is a key development as it will replace the existing form CAC 2, 2.1, 3, 4 and 7 and facilitate ease of doing business in the country by filling up a single form. It is important to note here that this new form consolidates the information required in all the forms mentioned above except that it is not required to disclose the names of the shareholders which was earlier required in CAC 2. The fraternity is expecting, that this information should be required to be provided in the new company’s memorandum and articles of association.

The new forms along with the memorandum and articles of association, then needs to be submitted online on the website of CAC. This will waive off the new companies from the requirement of filing return of allotment within one month.

Further, the CAC has created a new user interface to facilitate the investor and uploading the scanned incorporation documents online. It shall facilitate and speed up the registration process as the authorities shall print the registration certificate based on documents uploaded on the interface. To ensure the integrity of the data the login details shall be provided to users. Accordingly, only authorized users can access and modify the data.

In another welcome move, CAC is in talks with Federal Inland Revenue Services (FIRS) for collaborating, for integrating the e-stamping module into the CAC company registration portal (CRP). This shall further reduce the cost and time for registration of new companies.

Conclusion

The recent efforts should strengthen the country’s ranking in the ease of doing business and attract prospective investors to register their companies with minimized efforts and time.

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  • Newsletter

Transparency Measure in Hong Kong

Considering the various steps being taken for enhancing transparency across various jurisdictions the Financial Services and the Treasury Bureau (FSTB), of the Hong Kong Government has also started preparing itself and committed to support the implementation of automatic exchange of financial account information to deal with terrorist financing and money laundering. The country’s Inland Revenue Department has issued ordinance to the financial intuitions instructing to collect the information from the Account holders and thereafter exchange of will start by 2018.

Soon, after the legislative amendment by the Authority in Hong Kong the Multinational enterprises having business in the country would be required to file country by country reports for the accounting periods commencing on or after 1 January 2018. The Authority is in phase of setting out procedures for the same.

With regards to the disclosure and the transparency measures being taken by the Government it is important to take note of the conclusion of the public consultation on corporate beneficial ownership released on 13 April 2017 by the FSTB. Following are the measure being adopted for base erosion and profit shifting (BEPS) and know the details of the Beneficial Ownership Registers:

In Hong Kong, on or after 1 January 2018 all the multinational enterprise group will be required to submit a country by country reports (Cbc) for the accounting period with the Authority.

The time line to file the Cbc for Hong Kong resident ultimate parent company would be within 12 months after the end of the relevant accounting period. However, if the ultimate parent company is having resident in another jurisdiction – it will not require the filing of CbC report.

The Cbc Report will require disclosure of details in relation to the global allocation of the income, tax payment and location of economic activity in the jurisdictions of operation

It would be required to be filed, if the following conditions are met:

  • If the preceding accounting period consolidated group revenue is EUR750 million or more.
  • Having entities or operations in two or more jurisdictions

As currently the existing laws of the Hong Kong does not require the companies to maintain and disclose information in relation to the ultimate beneficial ownership. However, the listed companies are required to maintain and disclose the same.  After the public consultation on the subject in March 2017 it is proposed to maintain a register of individuals with significant controls (PSC register) by all the companies. The register must contain the following details:

  • Name of the registrable individual or entity
  • Date when the individual or the entity became registrable
  • Nature of the control of the individual or the entity.
  • Details of Identity card, passport number and issuing country of the individual
  • Legal form and company registration number of the entities
  • Correspondence details of the individual and entity

Thus, implementation of the above-mentioned transparency and disclosure norms by the Hong Kong Government would be a good step to deal with terrorist financing and money laundering in line with the steps being taken across the world in other jurisdictions.

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  • Newsletter

Role of Free Zones in UAE Economy

United Arab Emirates is one of the most preferred jurisdiction among the businesses around the world. The GCC economy have witnessed some difficult days in past year due to steep fall in oil prices. But the UAE economy is still going strong because it has successfully managed to divest its source of revenues from non-oil resources.

Sultan Bin Suleyem is the chairman of DP World. It is the holding company of Jabel Ali Free Zone Authority (JAFZA). It is one of the largest and oldest free zone in the UAE. It has attracted more than 470 companies in the UAE to register their business and shown a growth of seven percent is preceding five years. It is also important to note here that fifty eight percent of these companies are from Middle east itself. It is phenomenal growth rate considering the tightening economic situations around the world and falling oil prices. Asia pacific have been the largest contributor from outside the middle east as 21 percent of companies registered in 2016 are from this region. Europe and America follows with 16 and 3 percent respectively.


If you are looking to register your business in the free zone, please feel free to contact us at [email protected]

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  • Newsletter

Recent Amendments in Singapore Companies Act

Introduction

The Government of Singapore continuously strive to maintain the tag of the country as a global hub for investors and businesses. It has introduced its companies act last year and Ministry of Finance (MoF) of Singapore and Accounting and Corporate Regulatory Authority (ACRA) have conducted an in-depth review of the Companies Act, 2016. This revision culminated the formation of Companies (Amendment) Act, 2017 which address the concerns regarding increased administrative for small and medium scale companies. It was passed in the meeting of the Parliament on 10th March, 2017 and the presidential assent was granted on 29th March, 2017.

We shall highlight the major amendments in the following paragraphs. This article shall also cover deadlines prescribed for implementation of new guidelines and the objectives behind introducing the amended law.

Objectives

As per the statement made by the authorities the primary objectives for introduction of the new law are:

  • Enhanced Transparency in the control and ownership of the business;
  • Reduction in compliance and administrative cost for the companies;
  • To give a push to Singapore’s competitiveness as a global business hub.


The Beneficiaries of amendments

Small and medium scale companies registered in the Republic of Singapore shall be finding these amendments most beneficial as reduce a lot of their administrative costs. Further, the foreign entities planning to change their domicile to Singapore shall see a new ray of hope by introduction of new guidelines.

Key Amendments and Deadlines

The following table shall highlight the major amendments and scheduled deadlines.

The companies and LLPs registered in Singapore, including foreign companies, are mandatorily required to maintain registers of registrable controllers as per the places prescribed in the law 31st March, 2017.

Particulars Provision Deadline
Enhancing Transparency The liquidator shall maintain the records of liquidated companies for a period of five years after liquidation.

The requirement was only two years under previous provision.

 31st March, 2017
The option to destroy the company’s records in the event of winding up have been waived off. Earlier, the members

and the creditor of the company had the option to destroy the records earlier than the period provided in the law.

 31st March, 2017
All the companies who are struck off are required to maintain their records for at least five years 31st March, 2017
The nominee directors are now required to disclose their status of nominee director and the details of the

nominators to the companies. A register of nominee director should also be maintained

 31st March, 2017
The issue and transfer of bearer shares and share warrants are not allowed for companies registered in

Singapore

 31st March, 2017
A register of members of the foreign company required to be maintained. 31st March, 2017
The legal requirement of have a common seal have been waived off. 31st March, 2017
Change of Domicile The companies registered in foreign countries can now change their domicile to Singapore. There was no such
provision under previous regulations.		 First half of 2017
Conducting AGM and filing of Returns All the listed and non listed companies shall now align their annual return filing with financial year.

Private companies are exempted from conducting AGM. It will reduce their administrative expenses.

 Early 2018


Bottom Line

The changes bought in by the new law are appreciable and shall attract more investors to the country.

Please feel free to contact us at [email protected] for making your company 100% compliant with the new regulation.

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  • Newsletter

Introduction of New Corporate Bankruptcy Law in Singapore

The Singapore Parliament has on March 10, 2017 approved the Companies (Amendment) Bill 2017 with the objective of increasing the debt restructuring framework in the Country and is effective from March 30, 2017.

The act is one of the crucial reforms in Singapore’s Corporate law as it contains provisions as to cross border insolvency, schemes of arrangement and in the initial phase was reforms intended to implement recommendations made by the Insolvency Law Review Committee. Further, it is important to note that the act has adapted many points of the U.S. Bankruptcy Code, like cram-down powers, prepackaged restructuring plan.

Highlights:

  • The scope of moratoriums available extended to holding companies (in appropriate circumstances) of the scheme company in addition to subsidiaries
  • Exclusion of certain types of companies, and arrangements like netting or set-off
  • Flexible new proof of debt procedure for schemes
  • Requirement for the initial creditor support for a company to obtain a moratorium at the time of the new scheme or arrangement
  • Priority status for rescue funding necessary for business to operate as a going concern

 

Before the enactment of the law, a company was able to apply for a judicial management order only in the circumstance of inability to pay its debts. However, under the new amendment a company can apply for judicial management even “is or is likely to become” unable to pay its debts. Also, the Act puts an obligation of the parties to explain as to appointment of judicial administrator would cause prejudice.

The Act provides for different procedure for submission, objection, and adjudication of creditor claims – which includes:

  • filing of proof of creditor debts;
  • permission to creditors who have filed proof of their debts to inspect and object to claims filed by other creditors;
  • an adjudicator’s appointment nominated by the company to adjudicate the validity of every proof of debt;
  • procedure for dispute adjudication relating to claims by an independent assessor agreed to by the parties or appointed by the court following the application of a party to the dispute.

 

The Act has modified the rules and the process to be followed for schemes of arrangement – and for the same many of the features prescribed in U.S. Bankruptcy Code’s has been adapted like the introduction of rescue financing provisions for schemes of arrangement. Also, the Act provides for procedures in reference to prepackaged schemes of arrangement.

The Act has adopted the UNCITRAL Model Law on Cross-Border Insolvency. The same provides for rules and procedures governing cross-border bankruptcy and insolvency cases that has now been enacted in 42 countries. Under the old law only Singapore Companies were allowed to make application for Judicial Management proceeding. A foreign company can apply for judicial management proceedings it has:

  • its main interests in Singapore;
  • substantial assets in Singapore and
  • carries on business in Singapore or has a place of business there

Under the provisions of the Act,the court is authorised to approve a scheme of arrangement even in case of objection of creditors in following cases:

    1. The creditors represent the majority and holds at least 75 percent in value of the claims in a class for which votes are actually cast votes in favor of a proposed scheme;
    2. The creditors represent the majority and holds at least 75 percent in value of the total claims against the debtor for which votes are actually cast votes in favor of a proposed scheme; and
    3. the scheme is “fair and equitable” and does not “discriminate unfairly” between two or more classes of creditors.

In conclusion:

The New Law reform is crucial as it will make Singapore as one of the international debt restructuring hubs. Due to easier procedure, the act will allow foreign companies to file management for judicial management in Singapore. Thus, the stakeholder needs to become familiar with Singapore’ new debt restructuring law to take advantage of the same.

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  • Newsletter

New Rules for Cross Border Mergers of Indian Companies

Introduction

The ministry of corporate affairs of India has notified Section 234 of the Companies Act, 2013 which deals with the provisions for amalgamation or merger of an Indian company with a foreign company through their notification dated 13 April 2017. Further, insertion of Rule 25A to the Companies (Compromises, Arrangement and Amalgamations) Rules, 2016 have opened doors for outbound mergers of Indian companies with foreign companies which was not allowed in previous company law legislation (Companies Act, 1956). This article shall highlight important provisions of newly notified law.

The Conditions

Prior approval from the Reserve Bank of India (RBI) will be required for merger of a foreign company, incorporated in notified jurisdictions with an Indian company and vice versa. In line with the same, the RBI has also released draft regulations for cross border mergers on 26th April 2017 and public comments on the same are invited till 9 May, 2017.

The valuation of the continuing entity should be done by member of a recognized professional body and a report should be prepared as per internationally accepted standards of accounting and valuation and shall be submitted to RBI.

Approvals from shareholders, creditors, national company law tribunal (NCLT), securities and exchange board of India (SEBI), Industry specific regulators and income tax authorities should be obtained as per provisions of Section 230-232.

The scheme drawn for the proposed merger and amalgamation may provide for payment in depository receipts, cash or partly in both to the shareholders of the merging company.

Permitted Jurisdictions

Rule 25 A states that an Indian company may merge with a foreign company incorporated in specified jurisdiction, after complying with the provisions of Companies Act, 2013 and the rules thereto. The specified jurisdictions are:

  1. A jurisdiction whose securities markets have signed the memorandum of understanding with the International Organization of Securities Commission’s or the SEBI.
  2. A jurisdiction whose central bank is a member of the Bank for International Settlements (BIS).
  3. A jurisdiction which is not identified as a jurisdiction combating with the financing of terrorism activities or having a strategic anti money laundering by the Financial Action Task Force (FATF).
  4. Any such jurisdiction which has not achieved specified sufficient progress or has not committed to the action plan with FATF to address the deficiencies.

Brief Procedure

  • The company must be authorized through its Memorandum and Articles of Association to undergo cross border merger and amalgamation.
  • Draft scheme for the merger should be prepared and approval of board of directors should be obtained.
  • Once, the approval from the board is obtained, the company should seek approval from the RBI.
  • After obtaining RBI approval the company should file an application with NCLT to call a meeting of shareholders and creditors (if any) to approve the scheme of merger and amalgamation. The NCLT have the right to approve or reject the company’s application.
  • If the NCLT approves, company’s application to conduct the meeting the company should give notice to members/ creditors and it should also be published on company’s website, newspapers and the notice of the meeting should also be given to the SEBI and stock exchanges where company’s shares are listed.
  • The notice should also be given to regulatory authorities e.g. income tax authorities, Registrar of Companies (RoC) and other sectoral regulatory authorities.
  • The reports for result of meeting should be filed with NCLT within three days of the meeting. If the scheme is approved by majority stakeholders, the petition for compromise and arrangement shall be made within seven days of filing the report of result of meeting.
  • The tribunal after verifying the compliance shall pass an order and make provision for the merger and amalgamation. The company should file a copy of this order with RoC within 30 days of receipt of order.

The Final Word

These recent developments shall pave the way for the companies seeking outbound merger. On the other hand, detailed approval requirements minimize the risk of frauds and money laundering and ensures the complete protection of stakeholder’s interests. These amendments shall be gladly received by corporate fraternity as it opens the door for spreading the wings internationally.

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