A overseas company planning to arrange business operations in India has the following opportunities:

As An Indian Company

A foreign company can commence operations in India by incorporating a company under the Companies Act,1956 through

1. Joint Ventures; or
2. Wholly Owned or operated Subsidiaries

 

Foreign equity in such Indian companies can be up to 100% with respect to the requirements of the investor, subject matter to equity caps according to the area of exercises under the Overseas Direct Investment (FDI) policy.

1. Joint Venture With An Indian Associate

Overseas Companies may set up their operations in India by forging strategic alliances with Indian partners.

Joint Venture may include these benefits for an international investor:

• Established distribution/ marketing and advertising set up of the Indian partner
• Accessible monetary source of the Indian partners
• Arranged contacts of the Indian associates that help smoothen the operation of starting operations

2. Wholly Owned Subsidiary Company

Overseas companies also can set up wholly-owned subsidiary in sectors where 100% overseas direct investment is allowed in the FDI policy.

Incorporation of Company

For registration and incorporation, an application will have to be filed with Registrar of Companies (ROC). When a company has been duly registered and incorporated as an Indian organization, it is ruled by Indian regulations as appropriate to other domestic Indian companies.

As a overseas Corporation

Foreign Organizations can establish their own operations in India by means of

1. Liaison Office/Representative Office
2. Project Office
3. Branch Office

This sort of offices can carry out any sort of allowed exercises. Companies must enroll their selves with Registrar of Companies (ROC) within thirty days of starting a place of business in India.

1. Liaison Office/Representative Office

Liaison office behaves as a route of communication between the principal place of work or even head office and also entities in India. Liaison office could not really carry out any commercial activity directly or not directly and can not, subsequently, earn any kind of earnings in India. It's role is actually constrained to getting information with regards to feasible market possibilities and delivering knowledge related to the company and its products and solutions to prospective Indian clients. It may market export/import from/to India and at the same time help technical/financial venture among parent company and companies within India.

Approval for setting up a liaison office inside India is given by Reserve Bank of India (RBI).

2. Project Office

International Companies preparing to accomplish specific assignments in India can set up short-term project/site offices in India. RBI has now given general authorization to international entities to establish Project Offices subject to particular circumstances. These types of offices can not take on or even carry on any exercise other than the activity relating and incidental to performance of the actual venture. Project Offices could possibly remit outside India the surplus of the project on its conclusion, common authorization for which has been approved by the RBI.

3. Branch Office

Foreign companies engaged in manufacturing and buying and selling activities in another country are usually allowed to set up Branch Offices in India for the following purposes:

1. Export/Import of products
2. Manifestating expert or consultancy assistance
3. Practicing exploration, wherein the parent company is employed.
4. Offering specialised or even monetary partnerships between Indian companies and parent or overseas group company.
5. Representing the parent company in India as well as in the role of buying/selling brokers in India.
6. Providing solutions in I . T . and growth and development of software in India.
7. Rendering tech support for the goods given by the parent/ group companies.
8. Overseas air travel / shipping company.

 

A branch office isn't allowed to execute producing exercises by itself however is permitted to subcontract these to an Indian producer. Branch Offices set up with the permission of RBI, might remit outside India income from the branch, net of relevant Indian taxation's and subject to RBI rules Permission for organising branch offices is granted by the Reserve Bank of India (RBI).

Branch Office on ? Standalone Basis?

These types of Branch Offices may be isolated and restrained to the Special Economic zone (SEZ) solely and virtually no business activity / transaction will be granted outside the SEZs in India, which include branches/subsidiaries of its parent office in India.

Absolutely no approval shall be important from RBI with regard to a company to create a branch/unit in SEZs to commence manufacturing and service exercises subject matter to specific problems.