Repatriating Profits from India Back to Korea: Rules & Process

A key question for any Korean parent is how to move profits from its Indian subsidiary back to Korea. India permits repatriation through recognised channels, provided taxes are paid and documentation is in order.

Main Repatriation Routes

• Dividends: The most common route — paid out of post-tax profits to the Korean shareholder.
• Royalties & technical fees: For use of the parent's IP or technical know-how, within FEMA norms.
• Management/service fees: For genuine services rendered, at arm's length.

Tax Impact & the DTAA

Dividends are subject to withholding tax in India. The India–Korea Double Taxation Avoidance Agreement (DTAA) caps the withholding rate and lets the Korean parent claim credit for Indian tax paid, avoiding double taxation. A Tax Residency Certificate from Korea is needed to claim treaty benefits.

Documentation

• Board and shareholder approval for dividends.
• Form 15CA/15CB certifying tax has been handled before remittance.
• Transfer-pricing support for royalties and service fees.

Plan Ahead

Structuring the mix of dividends, royalties, and fees efficiently — within transfer-pricing and FEMA rules — can significantly improve after-tax returns to the parent.

Statura structures and executes profit repatriation, tax filings, and FEMA compliance for Korean-owned companies.