Establishing Business in India – What Foreign Companies Must Know

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

Liaison Offices – A foreign company can open a liaison office LLP Incorproation Online in India India to take good care of its Indian operations, to promote its business interests, to spread awareness belonging to the company’s products as well as to explore further opportunities. Liaison offices are not allowed to preserve any business or earn any income in India and all 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 home-based business presence in India, if the object is to have a presence for a limited period of a period of time. It is essentially a branch office make with the limited purpose for executing a specific problem. Foreign companies engaged in turnkey construction or installation normally put in 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, the spot that the parent company is engaged, provided the results of this research are made in order 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 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 is 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, when 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, 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 automated route, if the stipulations specified therein are complied with or obtain an approval from the FIPB.

Foreign companies intending to build any kind of office mentioned previously activities on behalf of the parent company or foreign trading companies in India for promotion of exports from India to be able to obtain a prior approval of the Reserve Bank by submitting an application in the prescribed form to the Central Office of Reserve Bank. On approval of this cases, permission is granted initially for finding a period of 3 years, prone to the condition that expenses of such office in order to met exclusively out of inward remittances; such offices are not permitted to get any income in In india.