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 a foreign company:
Liaison Offices – A foreign company can open a liaison office Online LLP Incorporation in India 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 opportunities. Liaison offices are not allowed to carry on any business or earn any income in India and 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 have a presence for a smallish period of schedule. It is essentially a branch office launched with the limited purpose for executing a specific undertaking. Foreign companies engaged in turnkey construction or installation normally established 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 write-up of:
oRepresenting the parent company or other foreign companies within a 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 there for 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 is definitely an Indian Company a great 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, generally if the conditions specified therein are complied with (specific high priority industries) or get 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, could be 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 conditions specified therein are complied with or obtain an approval from the FIPB.
Foreign companies intending to put in any type of office already mentioned activities component the parent company or foreign trading companies in India for promotion of exports from India for you to obtain a previous approval of 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 3 years, subject to the condition that expenses of such office in order to met exclusively out of inward remittances; such offices are not permitted produce any income in Of india.
