Setting up Business in India – What Foreign Companies Must Know
Foreign companies may set up business in India in any one of next 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 belonging to the company’s products this particular explore further open positions. Liaison offices are not allowed to persevere any business or earn any income in India and all expenses are for you to 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 modest period of schedule. It is essentially a branch office launched with the Limited Liability Partnerhsip Registration Online India purpose for executing a specific projects. 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 write-up of:
oRepresenting the parent company or other foreign companies in various matters in India, like acting as buying and selling agents.
oConducting research, where the parent company is engaged, provided the results of this research are made to be able to Indian companies
oUndertaking export and import trading games.
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 a good 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 underneath the 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. economic 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 conditions specified therein are complied with or obtain an approval from the FIPB.
Foreign companies intending to construct any involving office already stated activities on behalf of the parent company or foreign trading companies in India for promotion of exports from India in order to be obtain a prior approval of this 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 your period of three years, cause to undergo the condition that expenses of such office will be met exclusively out of inward remittances; such offices are not permitted to create any income in United states of america.
