Establishing Business in India – What Foreign Companies Must Know
Foreign companies may set up business in India any kind of one of pursuing manners while retaining its status like 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 of the company’s products this particular explore further open positions. Liaison offices are not allowed to persevere any business or earn any income Online LLP Registration in India India and every one expenses are 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 possess a presence for a smallish period of any time. It is essentially a branch office make with the limited purpose for executing a specific project. Foreign companies engaged in turnkey construction or installation normally set up 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 the purpose 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 final results of this research are made available to Indian companies
oUndertaking export and import trading activity.
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 your automatic route, 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. 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 circumstances specified therein are complied with or obtain an approval from the FIPB.
Foreign companies intending to set up any regarding office mentioned above activities on the part of the parent company or foreign trading companies in India for promotion of exports from India for you to 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 for these cases, permission is granted initially for finding a period of 3 years, subject to the condition that expenses of such office will met exclusively out of inward remittances; such offices are not permitted produce any income in India.
