Setting up Business in India – What Foreign Companies Must Know

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

Liaison Offices – A foreign company can open a liaison office in India to take good care of its Indian operations, to promote its business interests, to spread awareness among the company’s products in addition to explore further open positions. Liaison offices are not allowed to preserve any business or earn any income in India and expenses are become borne by remittances from abroad.

Project Offices – The project office is the ideal method for companies to establish a business presence in India, if the object is to possess a presence for modest period of schedule. It is essentially a branch office launched with the limited purpose for executing a specific project. Foreign companies engaged in turnkey construction or installation normally install 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 on the road of:

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

oConducting research, where the parent company is engaged, provided the outcomes of this research are made open to Indian companies

oUndertaking export and import trading ventures.

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 is definitely an Indian Company a good independent legal status, distinct from parents foreign company.

Under the current foreign investment policy, a wholly owned subsidiary can be established either your 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. economical 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 automated route, if the conditions specified therein are complied with or obtain an approval from the FIPB.

Foreign companies intending to set up any type of office already mentioned activities portion of the parent company or foreign trading companies LLP Registration Online in India India for promotion of exports from India to be able to obtain an earlier approval for this Reserve Bank by submitting an application in the prescribed form to the Central Office of Reserve Bank. On approval for these cases, permission is granted initially for a period of three years, cause to undergo the condition that expenses of such office is actually met exclusively out of inward remittances; such offices are not permitted create any income in In india.