Strategies for Foreign Companies Doing Business with India
or Investment Routes for Investing in India,
Entry Strategies for Foreign Investors
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
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
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
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
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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
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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
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