Establishing Business in India – What Foreign Companies Must Know
Foreign companies may set up business in India in any one of the next manners while retaining its status as being a foreign company:
Liaison Offices – A foreign company can open a liaison office LLP Incorproation Online in India India to look after its Indian operations, to promote its business interests, to spread awareness of the company’s products and to explore further opportunities. Liaison offices are not allowed to stick with it 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 profitable business presence in India, if the object is to have a presence for a limited period of time. It is essentially a branch office arranged with the limited purpose for executing a specific problem. Foreign companies engaged in turnkey construction or installation normally install a project office for their operations in India.
Branch Offices – Foreign companies engaged in manufacturing and trading activities outside India may open branch offices for medicine of:
oRepresenting the parent company or other foreign companies within a matters in India, like acting as buying and selling agents.
oConducting research, wherein the parent company is engaged, provided outcomes 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 as much 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 by 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, if the conditions specified therein are complied with (specific high priority industries) or ask for 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, 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 automatic route, if the physical conditions specified therein are complied with or obtain an approval from the FIPB.
Foreign companies intending to make any kind of office stated previously activities on behalf of the parent company or foreign trading companies in India for promotion of exports from India in order to be 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 3 years, subject to the condition that expenses of such office is actually met exclusively out of inward remittances; such offices are not permitted to get any income in United states of america.
