Partnerships & Opportunities!
June 2021
CEO SPEAK
 
As we ride out the second wave of COVID-19, it has been disturbing to hear of patients struggling to get their hands on drugs and medical supplies. Our hearts go out to those who lost a loved one in this devastating wave of the pandemic. As we grappled with an overburdened and exhausted health infrastructure, many countries announced aid and relief measures to support India during this calamity. 
 
The Canadian government identified medical equipment that could be donated from its emergency stockpile. They also pledged financial assistance to the Canadian Red Cross to support the Indian Red Cross Society’s response in India. In India, the government and citizens of the country, all stepped up efforts to support the needy.
The corporate sector also contributed to the overall healthcare relief efforts in the country through donations, medical supplies, oxygen concentrators, mini healthcare centers and technology solutions where relevant. Technology led by digital solutions has become the foundation for all businesses today, and the technology industry in India continues to innovate with solutions, services and business models. This crisis has also brought to the front the various gaps in the healthcare system and opportunities in the EdTech sector. With technology in the front, ICBC has been talking to various stakeholders to bring together Indian and Canadian technologies to give impetus to the health, agriculture and education sectors; to name a few. Join us in our upcoming sessions or contact us today to keep this momentum going.
Stay home and stay safe!
 
QUÉBEC  –  ENDLESS OPPORTUNITIES!

Québec has much to offer in terms of investment and trade related opportunities. Its geographic location provides one of the shortest routes between North America and Europe. Its modern and efficient transportation infrastructure means that goods can be shipped by land, rail, sea or air, or even by a combination of two or more of these modes.

 

Thanks to the current agreements, companies setting up operations in Québec can export tariff free to a number of prominent markets, including the European Union, United States, South Korea, Japan and Mexico. They are also allowed tariff-free procurement in these same countries, thereby reducing the cost of some of their inputs.

 

Québec boasts of centres of excellence in a broad range of innovative sectors: artificial intelligence, aerospace, video games, visual effects and animation, life sciences and health technologies, software development, clean technologies, financial technologies, data centres, cybersecurity and bio foods.

Moreover, Québec is one of the world’s largest hydropower producers and can provide extensive availability and a stable supply of clean, renewable energy at competitive prices. It has diversified natural resources, in particular significant mineral and forestry resources.

 

Foreign investors can benefit from competitive living and operating costs in Québec, in addition to a host of support measures based on the nature of their projects.

 

Québec has an advanced ecosystem of educational and research institutions, bolstered by the arrival of international workers and students. Montréal is Canada’s university capital and was ranked the best student city in the Americas in 2019 (QS Best Student Cities 2019 ranking).

 

Owing in particular to the accessibility and quality of its universal education, health, justice and childcare systems, which are underpinned by the values of solidarity and inclusion, as well as to the richness of its natural heritage and its great political and economic stability, Québec provides an exceptional living environment to those who choose to live there, whether alone or with their families.

 

Since its inception in 2008, The Québec Government Office in Mumbai exercises a mandate of promotion of trade, investment and cooperation in the fields of education and research, science and technology. We invite you to connect with our team to learn more about trade and investment opportunities in Québec. 

 

SIGNIFICANT ECONOMIC PRESENCE:
CHANGING THE CONVENTIONAL TAXATION SYSTEMS

Foreign investors can benefit from competitive living and operating costs in Québec, in addition to a host of support measures based on the nature of their projects.

 

Québec has an advanced ecosystem of educational and research institutions, bolstered by the arrival of international workers and students. Montréal is Canada’s university capital and was ranked the best student city in the Americas in 2019 (QS Best Student Cities 2019 ranking).

 

Owing in particular to the accessibility and quality of its universal education, health, justice and childcare systems, which are underpinned by the values of solidarity and inclusion, as well as to the richness of its natural heritage and its great political and economic stability, Québec provides an exceptional living environment to those who choose to live there, whether alone or with their families.

 

Since its inception in 2008, The Québec Government Office in Mumbai exercises a mandate of promotion of trade, investment and cooperation in the fields of education and research, science and technology. We invite you to connect with our team to learn more about trade and investment opportunities in Québec.

Owing to the advent of digitalization, India adopted the concept of ‘Significant Economic Presence’ (SEP) through the Finance Act, 2018. It expanded the scope of income for a non-resident doing business with India. The provisions expand the scope of ‘business connection’ {similar to Permanent Establishment (PE)} for non-resident, which may result in higher tax liability and compliances for non-residents. The tax rate applicable would be 40% (plus applicable surcharge and cess). A SEP is defined to include:

 

  • Transaction in respect of any goods, services or property carried out by a non-resident in India, including the provision of download of data or software in India, subject to payment threshold to be prescribed; or
  • Systematic and continuous soliciting of business activities or engaging in interaction with such number of users as may be prescribed in India through digital means

 

Transaction in respect of any goods, services or property carried out by a non-resident in India, including the provision of download of data or software in India, subject to payment threshold to be prescribed; or

Furthermore, the SEP can be triggered irrespective of whether the agreement for transaction or activity has been entered in India, whether the non-resident has a residence or place of business in India, whether the non-resident renders services in India. However, only income attributable to operations in India or transactions in India would be taxable.

 

 

It is pertinent to note that even though the SEP provisions were notified three years ago, the same remained inoperative in the absence of the thresholds and extension of applicability. The SEP provision was deferred on the grounds that a multilateral solution under the OECD is being considered where all tax treaties will get amended automatically. However, as the OECD countries are yet to reach a consensus on taxation of the digital economy, India has notified the ‘prescribed threshold’ and made the provisions governing SEP functional from the financial year 2021-22 onwards. The below thresholds have been prescribed:

  • Transaction Threshold: Any non-resident whose revenue exceeds INR 20 million for transactions in respect of goods, services or property with any person in India. This will include transactions on the download of data or software.
  • User Threshold: Any entity that systematically and continuously solicits business activities or engages with users in India, the threshold prescribed is 30 million users in India.

Our Comments

It is imperative to note that the threshold has been kept quite low and it may bring many non-residents under the ambit of SEP. However, the SEP provisions would have a limited impact on foreign MNEs as non-resident are still eligible to get treaty protection owing to the restrictive definition of permanent establishment (PE) for taxing business profits of a non-resident.

 

However, non-residents from non-treaty jurisdictions may have a huge impact as the limits are very small. Similarly, Indian companies would also have to more vigilant while applying withholding tax in light of these provisions. The SEP provisions provide that revenue attributable to India would be liable to tax in India. Indian Companies making payments would not be able to determine the revenue attributable to India, so they may have to apply 40% (plus applicable surcharge and cess) on the gross payments or ask the non-resident to get a lower withholding tax order from the tax department. Similarly, in a case where Indian companies are granting exemption under the Indian Income-tax Act (even for Treaty Countries) would have to check the applicability of SEP.

 

These provisions are applicable from 1 April 2021, so in a sense, the same can be said to be retrospective. Companies would have to check payments made during  April 2021 to see if these provisions would have an impact.

 

For more information on this subject: 

Maulik Doshi

Senior Executive Director
Transfer Pricing and Transaction Advisory Services
Nexdigm (SKP)
maulik.doshi@nexdigm.com

 

PEARSON PTE AND APPLYPROOF PARTNER TO SUPPORT

CANADA BOUND STUDENTS

Partnership enables universities and immigration agencies to verify scores at a ‘one-stop shop’ with no extra costs or additional steps for students.

 

In May 2021, Pearson, the world’s learning company announced a partnership with the international student recruitment platform, ApplyBoard to use its stand-alone document verification platform – ApplyProof. The objective of the partnership is to ensure that students taking PTE, Pearson’s leading English Language Proficiency test to study in Canada will have greater transparency and portability of their test results than ever before. ApplyProof will enable verifiers to access digital PTE results as needed, efficiently, and at no additional cost.

 

Immigration officials, government agencies, schools, and others can require students to provide proof of English language proficiency. The ApplyProof technology affords a secure and decentralized solution to the challenge of verification. Driven by the need for trust in international student documents and mitigating fraud, ApplyProof enables government stakeholders to verify the authenticity of a document by viewing the digital original held securely on ApplyProof servers using unique identifier passcodes.

ApplyProof will bring a new level of clarity, certainty, and ease-of-use to the processes for students, immigration officials, and institutions. The partnership will make results truly portable for students and users. Further, ApplyProof enables admission and immigration stakeholders to trust the information submitted to them in a secure environment and accomplished in a matter of seconds.

 

In partnership with schools, colleges, and universities across Canada, ApplyProof already enables secure, efficient verification of official student documents such as Proof of Acceptance. The partnership with Pearson adds Proof of English Language Proficiency, a giant step toward ApplyProof serving as one stop shop to verify international student documentation.

 

With this partnership in place, Pearson aims to make PTE an ever more beneficial, seamless, and effective experience for the test takers. Further, the partnership will have a positive impact on international students migrating into Canada.

 

PTE – the leading English Language Proficiency test is trusted by universities, colleges, and governments around the world. In Canada, PTE Academic is accepted by over 90% Canadian Universities and colleges as proof of English language ability – 199 Canadian institutions and still growing.
 
PRODUCE FROM THE FORESTS OF CHHATTISGARH

ICBC is promoting produce from the forests of Chhattisgarh manufactured by rural communities who earn substantial income through the collection and sales of this produce. It is imperative to promote the valuable herbal products from the forest of the state as not only are these products in their purest form but also sustain the livelihood of a large tribal population. We at ICBC would be happy to assist you with domestic or export orders.

Please write to us at: icbc@icbc.org.in

 

THE NEW BRUNSWICK ADVANTAGE

Great companies continue to grow their international footprints in New Brunswick by tapping into our highly educated bilingual workforce, our telecommunications infrastructure, startup-friendly innovation ecosystem, and everything else that makes up the cost-effective New Brunswick Advantage.

Since 2017, new restrictions on the H-1B visa in the U.S. have forced some of the most dynamic companies in the world to re-think their global footprints. The Province of New Brunswick has stepped up to be their solution.

 

India, a Priority Market

With a rapidly rising middle class and strong consumer market, India is one of the fastest-growing economies in the world. The country is already Canada’s 9th largest export market and 10th largest trading partner overall. Which is why India is one of the key markets New Brunswick is looking at for growth in population, to diversify trade and exports, and attract private sector investment to the province.

 

Canada is simply more predictable and safe right now. A lot of people back home with H-1B visas are finding Canada a more attractive option for them and their families

-Mani Kandaraman (CFO of Sedin Technologies)

 

“Tech Mahindra chose, in part, to expand in New Brunswick because of the strong international connections and working relationships the province has developed over the years,” said company representative Deepa Khosla. “We very quickly discovered the benefits of doing business in a well-connected and welcoming region. I’m excited to see our organization continue to grow and succeed here.”

 

New Brunswick understands the critical importance of India-based companies accessing great local and international talent. That is why ONB created a Client Engagement Team to support clients’ workforce development and talent recruitment efforts. Companies can turn to our Client Engagement Specialists for guidance and support on several immigration-related needs, including:

  • Immigration solutions for current staff looking to make the move to New Brunswick;
  • Finding the best local, national, and international talent to further expand their team;
  • Retaining international students on a permanent basis; and
  • Helping newcomers connect with multicultural associations and settlement services to provide soft landings for newcomers and family members.

New Brunswick’s smaller size is an important advantage in our value proposition to Indian companies. Things move quickly here and connecting with decision-makers, subject matter experts, and stakeholders is much easier than in larger urban centres. ONB is well-connected, serving as their single point of contact connecting them to the people that will help them thrive in Canada.

 

A Welcoming Community Awaits

 

OUR PARTNERS
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