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INVESTING STRATEGIES FOR FOREIGN COMPANIES INVESTING IN INDIA: Foreign Companies Entry Strategies to India, How Can Foreign Companies Enter India? How can Foreign Companies Invest in India?

How do foreign companies invest in India? How to Do Business with India? How to Start a Business in India? How to Form a Joint Venture in India?

Free Guide for USA Companies Doing Business in India,  Foreign Companies Doing Business in India, & NRI's Doing Business wth India

Madaan & Co.
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Strategies for Foreign Companies Doing Business with India

or Investment Routes for Investing in India, Entry Strategies for Foreign Investors

Foreign Companies Entering India

A foreign company planning to enter India, is required to meet all requirements of doing business in India as required by domestic Indian businesses. In addition foreign companies are required to seek governmental approval before investing in India. Some approvals are automatic, - RBI Approvals - though application is required for those approvals. Special Permission - FIPB Approvals - could be obtained to invest over and above the regular percentage allowed. See our FDI in India Sector wise Guide for more information on various conditions of investing in India. Also see Withholding Tax Rates For Foreign Companies Doing Business In India Under The Tax Treaties &  the Joint Ventures in India. Also see Entry Strategies in India for Foreign Investors

Please feel free to contact us for further information

A foreign company planning to set up business operations in India has the following options:

 

1) As an Indian Company

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

  • Joint Ventures; or

  • Wholly Owned Subsidiaries

Foreign equity in such Indian companies can be up to 100% depending on the requirements of the investor, subject to equity caps in respect of the area of activities under the Foreign Direct Investment (FDI) policy. Details of the FDI policy, sectoral equity caps & procedures can be obtained from Department of Industrial Policy & Promotion, Government of India. See also FDI in India Sector wise Guide

Joint Venture With An Indian Partner

Foreign Companies can set up their operations in India by forging strategic alliances with Indian partners.

Joint Venture may entail the following advantages for a foreign investor:

  • Established distribution/ marketing set up of the Indian partner

  • Available financial resource of the Indian partners

  • Established contacts of the Indian partners which help smoothen the process of setting up of operations

Wholly Owned Subsidiary Company

Foreign companies can also to set up wholly owned subsidiary in sectors where 100% foreign direct investment is permitted under the FDI policy.

Incorporation of Company

For registration and incorporation, an application has to be filed with Registrar of Companies (ROC). Once a company has been duly registered and incorporated as an Indian company, it is subject to Indian laws and regulations as applicable to other domestic Indian companies.

See also Formation of Subsidiary in India | Incorporating company in India | Procedure for Formation of Company in India


2) As a Foreign Company

Foreign Companies can set up their operations in India through

  • Liaison Office/Representative Office
     

  • Project Office
     

  • Branch Office

Such offices can undertake any permitted activities. Companies have to register themselves with Registrar of Companies (ROC) within 30 days of setting up a place of business in India.

Liaison office/ Representative office

Liaison office acts as a channel of communication between the principal place of business or head office and entities in India. Liaison office cannot undertake any commercial activity directly or indirectly and cannot, therefore, earn any income in India. Its role is limited to collecting information about possible market opportunities and providing information about the company and its products to prospective Indian customers. It can promote export/import from/to India and also facilitate technical/financial collaboration between parent company and companies in India.

The approval for establishing a liaison office in India is granted by the Reserve Bank of India (RBI).

Project Office

Foreign Companies planning to execute specific projects in India can set up temporary project/site offices in India. RBI has now granted general permission to foreign entities to establish Project Offices subject to specified conditions. Such offices cannot undertake or carry on any activity other than the activity relating and incidental to execution of the project. Project Offices may remit outside India the surplus of the project on its completion, general permission for which has been granted by the RBI.

Branch Office

Foreign companies engaged in manufacturing and trading activities abroad are allowed to set up Branch Offices in India for the following purposes:

  • Export/Import of goods

  • Rendering professional or consultancy services

  • Carrying out research work, in which the parent company is engaged.

  • Promoting technical or financial collaborations between Indian companies and parent or overseas group company.

  • Representing the parent company in India and acting as buying/selling agents in India.

  • Rendering services in Information Technology and development of software in India.

  • Rendering technical support to the products supplied by the parent/ group companies.

  • Foreign Airline/shipping Company.

A branch office is not allowed to carry out manufacturing activities on its own but is permitted to subcontract these to an Indian manufacturer. Branch Offices established with the approval of RBI, may remit outside India profit of the branch, net of applicable Indian taxes and subject to RBI guidelines Permission for setting up branch offices is granted by the Reserve Bank of India (RBI).

Branch Office on "Stand Alone Basis"

Such Branch Offices would be isolated and restricted to the Special Economic zone (SEZ) alone and no business activity/transaction will be allowed outside the SEZs in India, which include branches/subsidiaries of its parent office in India. No approval shall be necessary from RBI for a company to establish a branch/unit in SEZs to undertake manufacturing and service activities subject to specified conditions.

See also Opening Branch in India Starting a Business in India

See also FDI in India Sector wise Guide | FDI in Small Scale Sector in India Further Liberalized

Formation of Subsidiary in India | Starting a Business in India | Opening Branch in India | Incorporating company in India | Procedure for Formation of Company in India

Joint Ventures in India | Joint Venture Agreements | Outsourcing Agreements | Outsourcing to India | Formation of Subsidiary in India |  Starting a Business in India | Opening Branch in India | Incorporating company in India | Procedure for Formation of Company in India

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Services Offered by Us

Madaan & Co. has helped foreign companies in setting up there operations in India and other countries. A careful tax planning is required before opening a subsidiary, branch, joint venture, project office or liaison office in India. We can help you in corporate planning and setting up in India and other countries. We have also helped US law firms in handling their India related legal work. We can help your law firm or company in setting up in India and other countries. Click here to Contact us

 

Contact us for:

  • All legal services regarding Doing Business in India

  • Incorporating in a company in India

  • Opening a Branch Office

  • Opening a Project Office

  • Setting up Joint Ventures in India

  • Setting up a subsidiary in India

  • Drafting Agreements

  • Negotiating Agreements

  • Setting up Outsourcing in India

  • Dispute Resolution

Our lawyers include those admitted to bar in the United States of America and India. They have undertaken legal maters in the USA, India and Europe. They understand the multi-cultural  and the multi-jurisdictional aspects of international business in this age of globalization. They include those educated at Harvard Law School, Harvard University in the USA and premier universities in India. They believe in high moral and legal ethics.
Click here to Contact us

Contact Information:
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FIPB Approval for Foreign Investment in India  |  RBI Approvals for FDI in India Government Approvals for Investing in India  |  Entry Strategies in India for Foreign Investors

Doing Business with India Free Guide | Incorporating company in India | Procedure for Formation of Company in India | Formation of Subsidiary in India |  Starting a Business in India | Opening Branch in India | Annual Corporate Filings in India | Patents in India | Trademarks in IndiaTax Rates in India Withholding Tax Rates For Foreign Companies Doing Business In India Under The Tax Treaties | Joint Ventures in India | FDI in India Sector wise Guide | India Business | Arbitration in India | Cyber Laws of India | Corporate Compliance in India | Corporate Affirmative Action Program in India | How to Outsource Successfully | Investing in Stocks & Mutual Funds in India - Foreign Institution Investors in India

Legal Outsourcing | Outsourcing Agreements | Outsourcing to India | Joint Venture Agreements

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