US & Global Business
POEM (Place of Effective Management) — Meaning
The test that can make a foreign company tax-resident in India if it is effectively managed from India.
What is POEM (Place of Effective Management)?
A company incorporated outside India is treated as resident in India if its place of effective management — where key management and commercial decisions for the business as a whole are in substance made — is in India in that year. An Indian-resident foreign company is taxed in India on its worldwide income. Founders running a US, UK, Singapore or UAE company from India need governance that keeps real decision-making abroad if the company is meant to be non-resident.
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More US & Global Business terms
PFIC (Passive Foreign Investment Company)
A US tax category that makes Indian mutual funds expensive for US citizens and residents to hold.
FBAR (FinCEN Form 114)
A US report of foreign financial accounts when their total exceeds USD 10,000 at any time in the year.
Form 5472
A US information return for foreign-owned single-member LLCs and corporations — $25,000 penalty if missed.
EIN (Employer Identification Number)
The US federal tax ID for a company, obtainable by foreign owners without an SSN or ITIN.
ITIN (Individual Taxpayer Identification Number)
A US tax ID for individuals who must file US taxes but aren't eligible for an SSN.
