Establishing Business in India – What Foreign Companies Must Know

Foreign companies may set up business in India in any one of the following manners while retaining its status like a foreign company:

Liaison Offices – A foreign company can open a liaison office in Online LLP Registration Procedure India to handle its Indian operations, to promote its business interests, to spread awareness with the company’s products in addition to explore further placements. Liaison offices are not allowed to preserve any business or earn any income in India and expenses are 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 have a presence for minimal period of any time. It is essentially a branch office make with the limited purpose for executing a specific upgrade. 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 extra of:

oRepresenting the parent company or other foreign companies a number of matters in India, like acting as buying and selling agents.

oConducting research, wherein the parent company is engaged, provided the outcome of this research are made open to Indian companies

oUndertaking export and import trading situations.

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 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 your 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, which 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 stipulations specified therein are complied with or obtain an approval from the FIPB.

Foreign companies intending to make any involving office already stated activities component the parent company or foreign trading companies in India for promotion of exports from India to be able to obtain an earlier 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, foreclosures the condition that expenses of such office will be met exclusively out of inward remittances; such offices are not permitted produce any income in Of india.