Working with Indian companies as a UK process agent involves a layer of documentation that doesn’t arise with most other countries. Indian tax and remittance rules require the party making a payment to a non-resident to satisfy certain compliance requirements before the payment leaves the country, and process agent fees fall within the scope of those requirements.
What follows is a description of how we handle these requests at London Registrars, based on what Indian clients actually ask for in practice. It is not tax or legal advice, and Indian companies should take their own guidance on their specific obligations.
The Tax Residence Certificate
The most common request from Indian clients is for a Tax Residence Certificate, known as a TRC. This is an official document issued by HMRC confirming that London Registrars Ltd is a UK tax resident company. Indian companies need it to apply the reduced withholding tax rate available under the India-UK Double Taxation Avoidance Agreement, rather than the higher domestic rate that would otherwise apply.
We apply for the TRC from HMRC, who issues the certificate by post. Once received, we scan it and email it to the client. In our experience, a scanned copy is accepted without difficulty. The certificate can be requested as at the date on which HMRC issues it or, alternatively, it could cover a specific period in which case the application needs to give the “from” and “to” dates – but the dates must be past dates – HMRC will not issue TRCs covering a future date. Again, we take our cue from our Indian clients’ requests.
The No Permanent Establishment letter
Many Indian clients also request what is variously described as a No PE Declaration or a Confirmation of No Permanent Establishment in India. This is a letter we supply ourselves, confirming that London Registrars does not have a permanent establishment in India as defined under the India-UK Double Taxation Avoidance Agreement.
The absence of a permanent establishment is relevant because it affects how our income is treated under Indian tax rules. Where a UK supplier has no PE in India, business profits are generally not taxable in India, and the Indian payer can apply a reduced or nil withholding rate with greater confidence.
Form 10F
Some Indian clients also request Form 10F, a self-declaration filed electronically on the Indian Income Tax portal by the non-resident entity. It supplements the TRC where this does not contain all the mandatory information such as the taxpayer’s name, their foreign address, their tax identification number and their status. The TRCs issued in the UK by HMRC contain all the above information, hence there is very rarely a need for also supplying the Form 10F filing by the UK process agent.
Form 15CA
A smaller number of Indian clients raise the question of Form 15CA, which is a declaration filed by the Indian remitter before making a payment to a non-resident. This is an obligation on the Indian payer, not on London Registrars.
Our position, based on our reading of the relevant rules, is that certain exemptions may apply to payments of the kind we receive. Specifically, where a payment is made to a UK supplier that effectively substitutes for the Indian company having its own UK office or presence, there is an argument that the payment falls within an exempt category under the rules. We put that position to clients who raise the question. Some accept it; others prefer to complete the form regardless as a matter of their own compliance preference.
Why the documentation varies between clients
One of the more puzzling aspects of working with Indian companies is that the documentation requests vary significantly from client to client. Some ask for nothing beyond the process agency agreement itself. Others ask for the full set of documents described above, and occasionally more.
This variation reflects differences in how individual Indian companies, their accountants, and their banks interpret and apply the rules. The requirements are not always applied consistently, and the same type of payment can attract different documentation demands depending on the client’s own advisers and the bank through which the payment is being made.
Our approach is to provide what we can, explain our position clearly where we decline a specific request, and work with clients to find a practical route through the process.
If you are an Indian company looking to appoint a UK process agent and have questions about the documentation process, please get in touch with us directly via the process agent service page. We are happy to discuss what is typically required and how we handle these requests in practice.