The company which is incorporated outside India is a Foreign company. Residential status of foreign company shall depend upon place of effective management. Place of effective management to mean a place where key management and commercial decisions that are necessary for the conduct of the business of an entity as a whole are, in substance made. It simply means the place where board meetings are held or that person to whom board of directors have delegated the entire policy decision of company. E.g. Managing Director, Manager who has control and management.

Control & Management of the affairs of the business is situated

  • Wholly in India : Resident in India.
  • Partially in India : Resident in India.
  • Wholly outside India : Non – Resident in India.

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