Receiving partial payment of overseas loan/company purchase?
"Is it equity, or debt? Understanding the exact nature of one's investment (equity vs. debt) is critical. When one invests money in a company (presumably incorporated or limited) by buying some or all of it — as opposed to lending money to the company — then one ends up owning equity (shares or stock) in the company. In such a situation, one is a shareholder — not a creditor. As a shareholder, one is not generally owed a money debt just by having acquired an ownership stake in the company. Shareholders with company equity generally don't get to treat money received from the company as repayment of a loan — unless they also made a loan to the company and the payment is designated by the company as a loan repayment. Rather, shareholders can receive cash from a company through one of the following sources: ""Loan repayment"" isn't one of those options; it's only an option if one made a loan in the first place. Anyway, each of those ways of receiving money based on one's shares in a company has distinct tax implications, not just for the shareholder but for the company as well. You should consult with a tax professional about the most effective way for you to repatriate money from your investment. Considering the company is established overseas, you may want to find somebody with the appropriate expertise."
Assets can be acquired in different ways and for different purposes. I will only address common legal ways of acquiring assets. You can trade one asset for another asset. This usually takes place in the form of trading cash or a cash equivalent for an asset. The asset received should be of equal or greater value than the asset given in the eyes of the purchaser in order for the trade to be rational. Take this example: I am selling a bike that has been sitting on my porch for a few months. It's worth about $25 to me. My friend, Andy, comes by and offers $90 for it. I happily accept. Andy valued the bike at $110. This transaction produced value for both parties. I had a value benefit of $65 (90 - 25) and Andy had a value benefit of $20 (110 - 90). You can receive an asset as a gift or an inheritance. Less common, but still frequent. Someone gives you a gift or a family member dies and you receive an asset you did not own previously. You can receive an asset in exchange for a liability. When you take out a loan, you receive an asset (cash) which is financed by a liability (loan payable). In your case: Why would I buy a mall if having assets worth the same amount as the mall? I must value the mall more than the assets I currently have. This may stem from the possibility of greater future returns than I am currently making on my asset, or, if I financed the purchase with a liability, greater future returns than the cost associated with payment on the principal and interest of the liability. I've read this claim many times in the news: banks are making less profit from the lending business when interest rates are historically low. The issue with most loans is they can be satisfied at any time.  When you have falling interest rates it means most of the banks loans are refinanced from nice high rates to current market low interest rates which can significantly reduce the expected return on past loans.  The bank gets the money back when it wants it the least because it can only re-lend the money at the current market (lower) interest rates.  When interest rates are increasing refinance and early repayment activity reduces significantly. It's important to look at the loan from the point of view of the bank, a bank must first issue out the entire principal amount.  On a 60 month loan the lender has not received payments sufficient to satisfy the principal until around 50th or 55th month depending on the interest rate.  If the bank receives payment of the outstanding amount on month 30 the expected return on that loan is reduced significantly. Consider a $10,000, 60 month loan at 5% apr.  The bank is expected to receive $11,322 in total for interest income of $1,322.  If the loan is repaid on month 30, the total interest is about $972.  That's a 26% reduction of expected interest income, and the money received can only be re-lent for yet a lower interest rate. Add to this the tricky accounting of holding a loan, which is really a discounted bond, which is an asset, on the books and profitability of lending while interest rates are falling gets really funky. And this doesn't even examine default risk/cost. I'm glad you didn't say they were the only causes of the bubble, and I hope you didn't mean to.  But I won't argue that those were not partially to blame.  I also won't say I personally was not partially to blame.  Now, I certainly don't want to defend the banks, at least not a lot of them, but I disagree with some of your assertions. For one thing, they are getting blamed for making loans to readily available, and now they are being blamed (not by you) for **not** making the money readily available.    Have you financed any homes?  If so, did you just go to a bank and get a loan?  I'm sure some people do that, but I don't know anyone who ever has.  I go to a loan agent, and get a much cheaper loan.  And I think part of the problem is that many of these agents have only one overriding objective - to enable you to qualify for a loan, so they can get their commission.  They know all the rules and reasons people get turned down, so they play the system and get people loans who should not get them.  I don't really think the banks are blameless, as they allow this, and in many cases, know about it (unofficially).  But I don't think it's a conspiracy by the banks; I think the banks were simply naive and thought that the past was a good indicator or the future, so the loans were safe because they would get the house if the owner defaulted, and the house would be worth at least the value of the equity the owner had after the down payment.  Lots of people made mistakes on both sides.  You can call it a conspiracy if you want, but I've found that most conspiracy theories were simply not real.    Other than that, I totally agree with you.  :) Lenders may sell your mortgage to other lenders for a fee.  For example,  your lender might sell your mortgage to the highest bidder who may want to purchase your mortgage by making a one time payment.  For your lender that's a quick profit, for the new owner of your mortgage, that's long term returns for a one time fee.  For your lender, that is forgoing long term returns for short term gains (and transfer of risk in case you default).   (Very similar to how bonds work in a stock exchange!) What does this mean to you? Nothing.  You will still keep making payments to your original lender.   What does 'transfer of ownership has not been publicly recorded mean'? It means, when you are asked about ownership details regarding your mortgage, and this could be in tax forms or refinancing etc., you would enter your original lender's information and not Freddit Mac's! Pro-tip There are lots of scams based on this.  You might receive an official looking letter in mail claiming your loan has been sold and you should start making payments to the new owner. DO NOT FALL FOR THIS! Call your original lender (use the phone number from your loan papers, not mail you received) and verify this information.   And if this were to happen, your original lender would always inform you first.   And hey, congrats on your new home! :) There is nothing called free lunch. The 2% fee indirectly covers the cost of funds and in effect would be a personal loan. Further the repayment period would typically be 3 months and roughly would translate into 7-9% loan depending of repayment schedule etc. There is no harm in trying to get the fee waived, however one thing can lead to another and they may even go and do an credit inquiry etc, so be cautious. "I'm not familiar with the law and taxes in India but can provide guidance based on general accounting and tax principles. You are right that receiving money as a loan is not income and isn't liable to income tax. Therefore i suggest you actually formalise this loan through a written contract with your friend. The contract should include all the usual elements of a loan: amount, interest (even if preferential or zero), principal, term, consequences of default and currency of loan. You can then simply state the purpose of transfer as ""Personal Loan Agreement"". If you have such a document and are questioned by tax authorities you can easily show that the inward remittance is from a loan and should therefore be treated like any commercial loan for tax purposes. As long as you disclose the debt in your tax return (if required in India) and your friend discloses any interest received as income i think you'll be above board and won't be liable for any income tax. To make sure, you might be better off having a quick consultation with an accountant or tax specialist in India to advise you and draft the loan agreement." I'm having a difficult time understanding how Chevron is avoiding taxes through party related loans. From my understanding, Chevron is providing loans to its Australian subsidiary at interest rates higher than market benchmarks. Does this shift profits from Australia to the U.S. and how does it help Chevron avoid taxes even though the corporate tax rate is higher in the U.S. than in Australia? Wouln't they want to be taxed at the the lower tax rate in Australia than in the U.S.? The more description the better, thanks! Edit: I think I understand that Chevron is giving out large loans with high interest rates to its subsidiary in Australia and I think the Australian subsidiary is converting its revenues to pay back the loan thus looking like profit in the corporation's books in Delaware. How is the money to pay back interest being raised if not from revenue? And how is that revenue not being taxed? I would talk to an immigration lawyer.  This sounds like the kind of thing that they'd deal with frequently.  As I understand it, your concern is mostly about managing the transfer, not the sale.  An immigration lawyer is going to see clients with overseas assets frequently.  If this isn't something that they do themselves, they can refer you appropriately.   In general when I'm looking for a lawyer, I start with the local bar association.  The one for San Francisco.  If that's the wrong bay area, they are normally at the county level.  So you can find them by searching for bar association with the appropriate county or city name.  If you explain your problem briefly, they can direct you.