Setting up Business in India – What Foreign Companies Must Know
Foreign companies may set up business in India in any one of pursuing manners while retaining its status as being a foreign company:
Liaison Offices – A foreign company can open a liaison office in India to pay attention to its Indian operations, to promote its business interests, to spread awareness belonging to the company’s products so you can explore further opportunities. Liaison offices are not allowed to carry on any business or earn any income Online LLP Registration in India 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 business presence in India, if the object is to possess a presence for a limited period of season. It is essentially a branch office launched with the limited purpose for executing a specific upgrade. Foreign companies engaged in turnkey construction or installation normally established 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 extra 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, in which the parent company is engaged, provided the outcomes of this research are made to be able 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 a Indian Company with an independent legal status, distinct from the parent foreign company.
Under the current foreign investment policy, a wholly owned subsidiary can be established either the particular automatic route, when 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. 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 stipulations specified therein are complied with or obtain an approval from the FIPB.
Foreign companies intending to set up any involving office mentioned above activities component the parent company or foreign trading companies in India for promotion of exports from India in order to be obtain a prior approval for this Reserve Bank by submitting an application in the prescribed form to the Central Office of Reserve Bank. On approval of the cases, permission is granted initially a period of three years, prone to the condition that expenses of such office can met exclusively out of inward remittances; such offices are not permitted produce any income in In india.
