Establishing Business in India – What Foreign Companies Must Know
Foreign companies may set up business in India any kind of one of the next manners while retaining its status for a 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 with the company’s products so you can explore further avenues. Liaison offices are not allowed to preserve any business or earn any income in India and every one of expenses are in order to become borne by remittances from abroad.
Project Offices – The project office is the ideal method for companies to establish a legitimate income opportunity presence in India, if the object is to possess a presence for modest period of time. It is essentially a branch office make with the limited purpose for executing a specific undertaking. 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 write-up of:
oRepresenting the parent company or other foreign companies in various matters in India, like acting as buying and selling agents.
oConducting research, in which 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 around 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 an Indian Company a good independent legal status, distinct from the parent foreign company.
Under the current foreign investment policy, a wholly owned subsidiary can be established either underneath the automatic route, generally if the conditions specified therein are complied with (specific high priority industries) or get the approval from the FIPB.
Joint venture companies – Foreign companies may set up a joint venture company i.e. monetary collaboration with an Indian business house/company in India, which can 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 put in any kind of office already stated activities portion of the parent company or foreign trading companies in Online LLP Registration Procedure India for promotion of exports from India to be able to obtain a previous approval for the Reserve Bank by submitting an application in the prescribed form to the Central Office of Reserve Bank. On approval of cases, permission is granted initially for finding a period of 3 years, prone to the condition that expenses of such office in order to met exclusively out of inward remittances; such offices are not permitted to create any income in Of india.
