Archive · 30 Jun 2025
Crypto Funding Foreign Companies: Tax and Legal Issues for Indians
If you're in India and want to use cryptocurrency to invest in a company outside of India, there are rules.
The Indian government sees crypto as something you're selling or transferring, which can mean you owe taxes.
You'll pay a large tax on any profit, but you can't deduct much.
Plus, you have to tell the government about this.
Also, Indian laws don't allow you to use crypto to fund a company overseas.
Doing so could cause legal issues.
Using cryptocurrency to fund a foreign company can trigger Indian tax implications.
Cryptocurrency use for share subscription in a foreign company is considered a taxable event.
A flat 30% tax applies to gains from transferring cryptocurrency, with limited deductions.
Losses from such transactions cannot be offset or carried forward.
FEMA rules prohibit using crypto to contribute capital to a foreign company from India.
- Who
- Indian residents investing in foreign companies.
- What
- Using cryptocurrency to fund a foreign company.
- When
- Not specified in the articles.
- Where
- India and Dubai (UAE).
- Why
- To understand the tax and legal implications of using cryptocurrency for international investments.
Indian Tax Regulations
UAE Business Regulations
Taxation of Gains
Indian Tax Regulations
Crypto transactions trigger a 30% tax on gains.
UAE Business Regulations
N/A
Loss Treatment
Indian Tax Regulations
Losses cannot be used to offset gains in other incomes.
UAE Business Regulations
N/A
FEMA Regulations
Indian Tax Regulations
Using Crypto for foreign investments violate FEMA laws
UAE Business Regulations
N/A
- Tax Rate on Crypto Gains
- 30%
- Tax Deductions
- Limited to original cost of acquisition
- Loss Treatment
- Cannot be set off or carried forward
- Relevant Tax Schedule
- Schedule VDA of Indian ITR
- Additional Disclosure
- Schedule FA (Foreign Assets)
- FEMA Implications
- Using crypto to fund foreign companies is not permitted.