# Residential Status of a Company [Section 6(3)]
## Indian Company
An Indian Company is ALWAYS a Resident in India — irrespective of where its control or management is exercised.
(An Indian Company is one formed and registered under the Companies Act in India.)
## Foreign Company
A foreign company's status depends on Place of Effective Management (POEM):
| POEM Location | Status |
|---|---|
| In India | Resident |
| Outside India | Non-Resident |
```
Foreign Company
│
┌──────────┴───────────┐
POEM in India POEM outside India
│ │
Resident Non-Resident
```
## What is Place of Effective Management (POEM)?
POEM means the place where key management and commercial decisions that are necessary for the conduct of the business of an entity as a whole are, in substance, made.
- It is a substance-based test, not merely the place of incorporation or where Board meetings are held formally.
- It focuses on where decisions are actually made, not just rubber-stamped.
- POEM is to be determined annually.
## Key Points
- Companies do not have an ROR/RNOR distinction — only Resident or Non-Resident.
- POEM is irrelevant for an Indian Company — it remains Resident regardless.
- POEM is the sole test for a foreign company; the 'control and management' wholly/partly test (used for HUF/Firm/AOP) does NOT apply to companies.