Opening a Branch in India
Types and Options for
Foreign Investors Doing Business in India
Branch in India
Foreign companies engaged in
manufacturing and trading activities abroad are allowed to set
up Branch Offices in India for the following purposes:
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Export/Import of goods
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Rendering professional or
consultancy services
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Carrying out research work, in
which the parent company is engaged.
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Promoting technical or
financial collaborations between Indian companies and parent or
overseas group company.
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Representing the parent
company in India and acting as buying/selling agents in India.
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Rendering services in
Information Technology and development of software in India.
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Rendering technical support to
the products supplied by the parent/ group companies.
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Foreign airline/shipping
company
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Foreign Banks
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" in India
Stand Alone Branch Offices are
isolated and restricted to the Special Economic Zone (SEZ) alone
and no business activity/transaction is allowed outside the SEZs
in India, which include branches/subsidiaries of its parent
office in India.
No approval is necessary from
RBI for a company to establish a branch/unit in SEZs to
undertake manufacturing and service activities subject to
specified conditions.

Liaison Office/Representative Office
A Liaison Office could be
established with the approval of the government of India. The
role of Liaison Office is limited to collection of information,
promotion of exports/imports and facilitate technical/financial
collaborations.
Liaison office cannot undertake any commercial activity directly
or indirectly.

Project Office
Foreign companies planning to
execute specific projects in India can set up a temporary
project/site offices in India for carrying out activities only
relating to that project. The Government of India has now
granted general permission to foreign entities to establish
project offices subject to specified conditions.

A law to allow "Limited Liability Partnership" (LLP) in India has been
enacted by the Parliament of India recently. (Limited Liability Partnership
(LLP) Act of 2008).
LLP is an alternative corporate business entity that provides the benefits
of limited liability of a company but allows its members the flexibility of
organizing their internal management on the basis of a mutually-arrived
agreement, as is the case in a partnership firm.
This format would be quite useful for small and medium enterprises in
general and for the enterprises in services sector in particular, including
professionals and knowledge based enterprises.
As proposed in the Bill, LLP shall be a body corporate and a legal entity
separate from its partners. It will have perpetual succession. While the LLP
will be a separate legal entity, liable to the full extent of its assets,
the liability of the partners would be limited to their agreed contribution
in the LLP.
Further, no partner would be liable on account of the independent or
unauthorized actions of other partners, thus allowing individual partners to
be shielded from joint liability created by another partner’s wrongful
business decisions or misconduct.
For more details visit LLP in
India

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IT
is mandatory for foreign investors to obtain governmental approval before
opening a branch in India or forming a joint venture in India. In some sectors
certain restrictions may apply.
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For a foreign Investor in
India it is very important to choose a right kind of business or
corporate entity which best suits its purposes and takes care of
liability issues and tax planning issues. Foreign Companies
planning to do business in India should pay special attention to
Entry Strategies in India for Foreign
Investors and corporate structuring to save taxes to the best extent allowed
by laws and international tax treaties.
It is also mandatory for
foreign investors or foreign shareholders, both individuals and
corporate shareholders, to seek
Government Approvals for Investing in India In some special cases
Foreign Investment
Promotion Board, FIPB Approval for Foreign Investment in India
is required. In other cases
Reserve Bank of India, RBI Approvals for Foreign Investment in India is
required.
The sectors where RBI Approval for foreign investors is available under automatic
route can be found at
FDI in India Sector wise Guide.
There are various
steps required to establish a business
in India, before and after incorporation, as mentioned
hereinafter. See also the
Procedure for Formation of Company in India.
A Company in India can have
foreign directors provided some conditions are fulfilled. The
directors of an Indian company, both Indian and foreigner
directors, are required to obtain
Director
Identification Number - DIN and
Digital
Signature Certificate - DSC
Also see
Annual Corporate
Filings in India for corporate maintenance
requirements in India.

See also
Doing Business
with India Free Guide
|
FDI in India Sector wise Guide | 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 |
Government Approvals for Investing in India |
Entry Strategies in India for Foreign
Investors |
FIPB Approval for Foreign Investment in India |
RBI Approvals for FDI in India |
FDI
in Small Scale Sector in India Further Liberalized | Tax Rates in
India | Withholding
Tax Rates For Foreign Companies Doing Business In India Under The Tax Treaties
|
Annual Corporate
Filings in India | Joint Ventures in India
|
Outsourcing to India |
Legal Outsourcing

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,
corporate structuring
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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