Establishing Business in India – What Foreign Companies Must Know

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

Liaison Offices – A foreign company can open a liaison office in India to maintain its Indian operations, to promote its business interests, to spread awareness with the company’s products this particular explore further avenues. Liaison offices are not allowed to persevere any business or earn any income in India and every one 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 have a presence for constrained period of any time. It is essentially a branch office arranged with the limited purpose for executing a specific upgrade. 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 different matters in India, like acting as buying and selling agents.

oConducting research, the spot that the parent company is engaged, provided the outcome 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 Online LLP Registration in India 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 an Indian Company a good independent legal status, distinct from the parent foreign company.

Under the current foreign investment policy, a wholly owned subsidiary can be established either the actual automatic route, if for example 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, 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 automatic route, if the stipulations specified therein are complied with or obtain an approval from the FIPB.

Foreign companies intending to make any form of office already stated activities component the parent company or foreign trading companies in India for promotion of exports from India should obtain a prior approval for the 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, foreclosures the condition that expenses of such office is actually met exclusively out of inward remittances; such offices are not permitted create any income in United states of america.