Understanding PAN Card for Foreign Business in India?

If you are looking to expand your business in India, then you need to get a PAN (Permanent Account Number). This will help you to allow more smooth financial operations and get more growth opportunities, or for signing contracts.

A Foreign PAN card is important for the individual who has a valid business in India, and it is also essential to report the income earned in India through the business.

In this blog, we will see who needs a PAN for foreign business in India, along with the application process, document requirements, and other essential information.

Why is a PAN Important for the Foreign Business in India?

If you have a valid foreign business running in India, you need to have a valid PAN card for smooth processing. If you do not have a PAN while having a foreign business running in India, then it may lead to the following:

• You can face up to the 20% or even higher TDS.
• You will not be able to claim the tax refunds.
• If you don't have a valid PAN card, the payments made from the Indian client will get delayed, which can impact your foreign business in India.
• You can face legal issues for running a foreign business in India without following the guidelines and rules of the Indian tax laws.

If you don't have a valid PAN card in India, then you may face legal complications from foreign businesses in India.

Which Foreign Business Needs a PAN Card in India?

The following foreign business needs to apply for the PAN card under the Income Tax Act, 1961. It includes all the foreign businesses that are engaged in financial or taxable activities.

Foreign Business Earning Income From India

If your foreign business has a valid income generated from the Indian clients and any other sources, then you need to get a PAN card.

For examples:

• IT companies that are providing remote services.
• Digital service providers' billing Indian customers.
• For royalty and license income.

Foreign Company Set up in India

If you have a foreign company set up in India, then, for smooth working, you will need to have a PAN card.

It includes offices such as:

• Project office
• Liaison office
• Branch Office

A Foreign Business that is receiving an Amount with TDS

If your foreign business is subject to the Tax Deduction at Source (TDS), then you will need to have a PAN card in India for business in India.

You will need a PAN card for:

• To avoid getting high TDS rates.
• For claiming refunds.
• To file the Income Tax return.

Foreign Companies Investing in India

If your foreign company has made any business investment in India, then you need to have a mandatory PAN card.

These can include investments such as:

• Foreign Direct Investment (FDI).
• Investment made in the Indian shares or startups.
• For purchasing mutual funds or bonds.

To Open a Bank Account in India for a Foreign Business

If you have any foreign business in them, you will need to open a corporate bank account in India, which helps you with smooth financial transactions.

A PAN card is necessary for all KYC compliance.

Purchasing Property in India

If your foreign company is planning to purchase a real estate property in India, then you need to have a PAN card. A PAN card is legal and important for taxation purposes.

Contracts with Indian Companies

Most of the Indian companies need a PAN verification before making a legal contract with foreign companies. So, if you want to enter the contract list, then you should get a valid PAN card for a foreign business.

Process to Apply for a Foreign Business PAN Card in India

You can easily apply for a PAN card for a foreign business in India by filling out the form 95/96 from the Protean e-Gov portal or from the UTIITSL portal. Previously, the application form was 49AA. Then, the rules were changed, and new application forms 95 and 96 were introduced for foreign citizens to apply for a PAN card by the Income Tax Department (ITD).

PAN Card for Foreign Business Apply Online through Protean e-Gov Technologies

Here are the steps mentioned below to apply for a foreign business PAN card in India from the Protean (NSDL) portal.

1. Go to the online Protean e-Gov Technologies website. 
2. Click on the 'New Application' option. 
3. Select the PAN Application type ' New PAN- Form no. 95 & 96 (Foreign Citizen). 
4. Now select the Applicant category as 'Company'. 
5. Fill out all the essential business information, such as the name of the company, date of incorporation, email ID, registered address, and mobile number. 
6. Check the tick box, enter the captcha, and submit the application. 
7. Add an Authorized signatory's details, with name and passport details, designation, and address. 
8. Submit all the documents online, such as the Incorporation certificate, passport copy, apostille documents, address proof, etc. 
9. Pay the required fees for the foreign business PAN card in India. 
10. Submit your online PAN application form. 

Once your application is submitted, you will get an acknowledgment slip through which you can track the status of your PAN card application. If you have applied for an e-PAN, you will get it in your registered email address, and for the physical PAN, you need to wait for some time.

Note: If you selected the document submission as courier, then you need to send all the supporting documents to the application center.

How to Apply for a Foreign Business PAN Card through the UTI Portal?

Follow the steps given below to apply for a PAN card for a foreign business through the UTIITSL portal.

1. Visit the official UTI portal.
2. Click on the 'PAN Card Services' option in the home menu. 
3. Select the 'PAN Card for Foreign Citizen/Foreign Entity' from the PAN services section.
4. Choose the application form 'Apply for New PAN Card (Form no. 95 and Form no. 96). 
5. Select the PAN application documentation submission (Physical mode or Digital mode) 
6. Click on the company from the status of the PAN application category.
7. You can apply for the e-PAN and physical card, or only the e-PAN Card. 
8. Enter your details in the PAN application (name, date of incorporation, TIN, and address).
9. Provide all the documents for the PAN card for a foreign business in India.
10. Enter valid contact details, address details, and other details with all the supporting documents. 
11. Pay the required fees for the PAN card application for foreign citizens/ foreign entities. 
12. Submit the online application and wait for the processing of the PAN card. 

After the submission, you will get the acknowledgment slip, through which you can track the status of the PAN card online. 

Additionally, if you have selected the physical documents submission, then you need to send all the documents to the nearest UTIITSL office. 

After a few days, you will get your physical PAN card if you have selected e-PAN, then you will get it in you registered email address. 

Also Want to Know About How to Apply for PAN Card via NSDL Portal? Check Now!

Documents Required for a Foreign Business PAN Application in India

Here is the list of documents given below, which you need to submit for your PAN application for a foreign business in India. 

• Documents of the Company: Submit all the documents of your company to apply for a PAN card in India. such as:
  • Incorporation certificate
  • Business registration proof 
  • Partnership or trust deed
  • Association of persons. 
• Proof of Address of Foreign Business: You need to submit a valid proof of address of a foreign business for the PAN application.
• Authorized Signatory: Provide documents for the authorized signatory, such as:
  • Name of the authorized signatory. 
  • Address proof 
  • Designation
  • Passport details 
• Other Documents: Here are some of the additional documents that are also required for the PAN card application, such as
  • Board resolution
  • Apostilled documents 
  • Embassy attested documents 

What If I Don't Apply for a Foreign Business PAN Card in India?

Not applying for a Foreign business PAN card in India can lead you to many legal and financial complications, as given below. 

• If you don't have a valid PAN card in India, then you may have to face higher TDS rates on the foreign business payments received from India, according to the Income Tax Department. 
• As you don't have a PAN card, Indian clients can also refuse to have contact and deal with you, as PAN is a mandatory document for financial and invoicing purposes. 
• You may face penalties and fines due to not filing an Income tax return because of no PAN card in India.
• You cannot claim any tax refunds due to not having a Foreign Business PAN Card.
• You will not be able to claim any DTAA (Double Taxation Avoidance Agreement) benefits, which can lead you to pay a high tax liability. 
• Cannot open a bank account in India, which leads to various financial complications. 
• You may receive a legal notice from the Income Tax Department for not following the rules and regulations to operate a foreign business in India. 

If you do not apply for a PAN card in India for a foreign business, you can face many legal and financial problems. It will not only impact your financial budget but also make it easier for foreign businesses to operate in India smoothly. 

Final Thoughts

A PAN card for a foreign business is essential for legal and smooth financial purposes. You can apply for a PAN card by submitting all the documents and fees for the application. 

Visament can assist you with the smooth application process, where you will get a simple application process to apply for a PAN card and easy documentation. We help the foreign applicants to reduce the chances of mistakes and errors in the PAN card application. 

For more details, you can contact the Visament agents who are ready 24/7 to help you with all your queries and doubts related to PAN card applications.