Establishing Business in India – What Foreign Companies Must Know

Foreign companies may set up business in India in any one of subsequent manners while retaining its status as the foreign company:

Liaison Offices – A foreign company can open a liaison office in India to look after its Indian operations, to promote its business interests, to spread awareness within the company’s products so you can explore further opportunities. Liaison offices are not allowed to preserve any business or earn any income in India and every one of expenses are to borne by remittances from abroad.

Project Offices – The project office is the ideal method for companies to establish a legitimate income opportunity presence LLP Incorproation Online in India India, if the object is to have a presence for a limited period of a period of time. It is essentially a branch office launched with the limited purpose for executing a specific undertaking. Foreign companies engaged in turnkey construction or installation normally set up a project office for their operations in India.

Branch Offices – Foreign companies involved in manufacturing and trading activities outside India may open branch offices for medicine of:

oRepresenting the parent company or other foreign companies in a variety of matters in India, like acting as buying and selling agents.

oConducting research, the spot that the parent company is engaged, provided the outcomes of this research are made in order to Indian companies

oUndertaking export and import trading games.

oPromoting technical and financial collaborations between Indian and foreign companies.

Trading companies – Foreign companies may invest in trading companies engaged primarily in exports. Such trading companies are treated at par with domestic trading companies in accordance with the trade policy.

The RBI accords automatic approval for foreign equity up to 51 per cent for setting up trading companies engaged primarily in exports. All other proposals, which do not meet the criteria for automatic approval, can be addressed to the Foreign Investment Promotion Board, i.e. “FIPB”.

Wholly owned subsidiaries – Foreign companies may set up a wholly owned subsidiary, which a good Indian Company through having an independent legal status, distinct from parents foreign company.

Under the current foreign investment policy, a wholly owned subsidiary can be established either the actual automatic route, generally if the conditions specified therein are complied with (specific high priority industries) or get an approval from the FIPB.

Joint venture companies – Foreign companies may set up a joint venture company i.e. fiscal collaboration with an Indian business house/company in India, and an Indian Company with an independent legal status, distinct from the parent foreign company.

Under the current foreign investment policy, a joint venture can be established either under the automatic route, if the circumstances specified therein are complied with or obtain an approval from the FIPB.

Foreign companies intending to build any regarding office already mentioned activities on the part the parent company or foreign trading companies in India for promotion of exports from India should obtain a previous approval of the Reserve Bank by submitting an application in the prescribed form to the Central Office of Reserve Bank. On approval of this cases, permission is granted initially a period of 3 years, depending upon the condition that expenses of such office will met exclusively out of inward remittances; such offices are not permitted produce any income in In india.

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