From the Netherlands

A business from the Netherlands

1. Does an investment treaty protect a Dutch investment in India?

   The Department of Economic Affairs lists the India-Netherlands bilateral investment treaty as terminated on 1 December 2016; for investments made before then, Article 16 keeps it effective for fifteen years, to 1 December 2031.

   • Note: Dutch holding companies and dividend withholding
   • India-Netherlands Bilateral Investment Treaty, 1995

2. What rate applies to dividends paid to a Dutch holding company?

   On 19 October 2023 the Supreme Court held in Nestle SA that a most-favoured-nation clause in a treaty protocol operates only once the Central Government notifies it, so the notified India-Netherlands rate stays at 10 per cent, not the 5 per cent the Dutch assessees claimed.

   • Note: Dutch holding companies and dividend withholding
   • The Income-tax Act, 2025

3. Can a company incorporated in the Netherlands invest in an Indian company without approval?

   The Foreign Exchange Management (Non-debt Instruments) Rules, 2019 set the routes and the conditions on which a person resident outside India may acquire equity instruments of an Indian company.

   They allow it without prior approval where the sector is on the automatic route and the sectoral cap is not crossed, at a price not below fair value, with Form FC-GPR (Foreign Currency-Gross Provisional Return) filed with the Reserve Bank of India within thirty days of issue, as the note on a United States company sets out.

   • Businesses incorporated outside India
   • Note: a United States company investing in India
   • The Foreign Exchange Management (Non-debt Instruments) Rules, 2019

4. Can a company from the Netherlands have a presence in India without a subsidiary?

   A company incorporated outside India can seek a liaison, branch or project office, approved by an Authorised Dealer Category-I bank under the Reserve Bank of India’s Master Direction of 1 January 2016, as the note on a German company sets out.

   A branch needs five years of profit and a net worth of USD 100,000, a liaison office three years and USD 50,000.

   • Note: liaison, branch or project office
   • The Foreign Exchange Management (Establishment in India of a Branch Office or a Liaison Office or a Project Office or any other Place of Business) Regulations, 2016

5. When do India’s data protection duties start?

   The Digital Personal Data Protection Rules, 2025 were notified on 13 November 2025, but everything a data fiduciary has to build, the notice, the security measures, breach reporting, erasure and the rights machinery, starts on 13 May 2027, as do sections 3 to 17 of the Act.

   • Note: the data protection rules
   • The Digital Personal Data Protection Rules, 2025
   • The Digital Personal Data Protection Act, 2023

Indians living in the Netherlands

The Ministry of External Affairs brief on India and the Netherlands, May 2026, records the Surinami Hindustani community as part of the Indian diaspora in the Netherlands, together with Indian students. 9

1. When is an Indian citizen living in the Netherlands resident in India for tax?

   Under section 6 of the Income-tax Act, 2025, on 182 days or more in India in a tax year, or on 60 days plus 365 days in the four years before; a citizen visiting from abroad is outside the 60-day test unless income other than from foreign sources exceeds INR 15 lakh, when the test runs at 120 days.

   A citizen with such income above INR 15 lakh who is liable to tax in no other country is deemed resident, but only as a person not ordinarily resident.

   • Note: when an Indian citizen abroad is resident for tax
   • The Income-tax Act, 2025

2. Selling a flat in India while living in the Netherlands: the tax and the money

   For a sale in the tax year that began on 1 April 2026, the buyer withholds tax under section 393(2) of the Income-tax Act, 2025, and a non-resident’s long-term gain on a flat is taxed at 12.5 per cent under section 197.

   Remitting a Non-Resident (Ordinary) Rupee account balance is limited to USD 1 million a financial year without the Reserve Bank of India’s prior approval.

   • Note: selling a flat and sending the money abroad
   • The Income-tax Act, 2025
   • The Reserve Bank of India’s Master Direction on Remittance of Assets

3. Can a family member living abroad inherit property in India?

   Under section 6(5) of the Foreign Exchange Management Act, 1999 and rule 24(c) of the Non-debt Instruments Rules, a non-resident Indian or an overseas citizen of India may inherit any immovable property in India, agricultural land included.

   An authorised dealer bank may remit inherited assets and their sale proceeds abroad up to USD 1 million a financial year; whether probate or a succession certificate is also needed turns on the asset.

   • Note: inheriting property in India from abroad
   • The Indian Succession Act, 1925
   • The Reserve Bank of India’s Master Direction on Remittance of Assets

4. Signing a power of attorney in the Netherlands for property in India

   Two routes lead to a document Indian authorities will take: signature before an Indian consular officer, or signature before a foreign notary followed by an apostille under the Hague Convention of 1961.

   The status table of the Hague Conference lists the Netherlands among the contracting States.

   • Note: a power of attorney signed abroad
   • The Registration Act, 1908

5. What may an Overseas Citizen of India cardholder do in India?

   An OCI cardholder is a foreign national with a lifelong multiple-entry visa and parity with a non-resident Indian on buying and selling immovable property other than agricultural land, a farm house or plantation property.

   Four heads of activity need special permission, and the registration can be cancelled under section 7D of the Citizenship Act, 1955.

   • Note: what an OCI cardholder may do in India
   • The Citizenship Act, 1955
   • Notification S.O. 1050(E): rights of OCI cardholders