A non-resident shareholder holds shares in a company but resides outside its home country, facing distinct tax rules, regulations, and foreign investment policy
A non-resident shareholder refers to an individual or entity that holds shares in a company but resides outside the country where the company is incorporated. Non-resident shareholders can be foreign nationals, companies, or institutions who invest in a country's stock market.
These shareholders may have different tax obligations and regulatory requirements compared to resident shareholders, especially in terms of dividend taxation, capital gains, and reporting obligations. Non-residents may also be subject to exchange control regulations depending on the country’s foreign investment policies.
Example: An Indian company may have non-resident shareholders like an American investor who purchases shares on the Indian stock exchange. The American investor may receive dividends, but the tax treatment would differ from that of an Indian resident shareholder, as taxes on dividends could be subject to double taxation agreements between India and the United States.
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