Germany to India: questions German companies ask

A subsidiary lets dividends reach Germany under the 95% participation exemption. A branch's profits are dealt with in the German company's own return, usually under the treaty's exemption method.

German parents provide a current Handelsregister extract, the Gesellschaftsvertrag or Satzung and a resolution of the shareholders or management board. Signature and bank calls fit a German morning.

Germany objected to India's accession to the Apostille Convention, so confirm for each document whether an apostille is accepted or whether legalisation through the Indian mission is needed. German documents need a sworn (beeidigte) translation, kept with the original.

German groups often post an Entsandter (seconded manager) for a full year, who can act as resident director, or appoint an Indian managing director.

German-side costs include the notary, the Landgericht step or legalisation and sworn translation, which can be significant for long articles of association.

German documents usually take two to three weeks, driven by notary appointments, translation and the legalisation route.

Interest on loans from KfW, DEG or Hermes-backed lenders can be exempt in India under the treaty, which can make development-bank finance cheaper than ordinary intercompany loans.

German parents often need IDW-standard valuations for their own purposes; the FEMA certificate is separate and in rupees.

The India–Germany treaty, in force since 26 October 1996, applies a flat 10% to dividends, interest, royalties and technical fees, among the simplest rate structures India has.

A German corporation holding at least 10% exempts 95% of the dividend under Section 8b KStG, so the Indian 10% is largely a final cost.

Moving a function with profit potential from Germany to India can trigger an exit charge under the German function transfer rules, so document what moves and why.

German engineers on installation and commissioning projects are the main PE risk; track project durations against the treaty period.

The German parent reports the Indian holding, applies Section 8b, checks the CFC rules for passive income and, for large groups, applies Pillar Two.

Most German parents close on 31 December, so the Indian year needs a bridge; the FLA return in July often lands in the German half-year close.

Moving German work or HR systems to India can require works council consultation in Germany before anything happens in India.

The India–Germany Social Security Agreement keeps posted staff in German schemes for up to 48 months, extendable by 12, with a certificate of coverage.

German secondees usually keep German social security under the agreement; Indian tax applies to salary for Indian work.

Group HR and collaboration tools used in India can need a works council agreement in Germany, in addition to GDPR transfer clauses.

German judgments need a fresh suit in India; DIS or other New York Convention awards made in Germany are enforceable. The Supply Chain Due Diligence Act reaches Indian operations of large German groups.

German investors are concentrated in automotive, engineering, chemicals and renewables. The EU–India agreement is concluded but not yet in force.

German capability centres often handle engineering and SAP work; function transfer documentation in Germany should match the Indian transfer pricing file.

Germany exempts 95% of a corporate seller's gain, while India can tax it; model both before choosing the timing.