Setting up Business in India – What Foreign Companies Must Know
Foreign companies may set up business in India LLP Registration Online in India any one of the next manners while retaining its status as a foreign company:
Liaison Offices – A foreign company can open a liaison office in India to look after its Indian operations, to promote its business interests, to spread awareness belonging to the company’s products and to explore further opportunities. Liaison offices are not allowed to stick with it any business or earn any income in India and every one expenses are in order 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 have a presence for minimal period of schedule. It is essentially a branch office arranged with the limited purpose for executing a specific project. Foreign companies engaged in turnkey construction or installation normally set-up a project office for their operations in India.
Branch Offices – Foreign companies involved in manufacturing and trading activities outside India may open branch offices for on the road of:
oRepresenting the parent company or other foreign companies a number of 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 ventures.
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 through having an independent legal status, distinct from parents foreign company.
Under the current foreign investment policy, a wholly owned subsidiary can be established either your automatic route, if 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. economic collaboration with an Indian business house/company in India, and 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 circumstances specified therein are complied with or obtain an approval from the FIPB.
Foreign companies intending to build any form of office mentioned previously activities portion of the parent company or foreign trading companies in India for promotion of exports from India should obtain an earlier approval for 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 a period of 3 years, depending upon the condition that expenses of such office will be met exclusively out of inward remittances; such offices are not permitted to generate any income in Japan.
