Establishing 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 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 within the company’s products this particular explore further chances. Liaison offices are not allowed to carry on any business or earn any income in India and every one of expenses are for you 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 smallish period of schedule. It is essentially a branch office arranged with the limited purpose for executing a specific project. Foreign companies engaged in turnkey construction or installation normally established a project office for their operations LLP Registration Online in India 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 various matters in India, like acting as buying and selling agents.

oConducting research, in which the parent company is engaged, provided the results of this research are made there for 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 definitely an Indian Company by independent legal status, distinct from parents foreign company.

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

Foreign companies intending to build any regarding office mentioned above activities component the parent company or foreign trading companies in India for promotion of exports from India have 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 the cases, permission is granted initially for finding a period of three years, cause to undergo the condition that expenses of such office will met exclusively out of inward remittances; such offices are not permitted to generate any income in India.