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US Companies Doing Business in India
USA - India Trade
How do US Companies do Business in India?
The Indian market with its one billion plus population, presents lucrative and diverse opportunities for U.S. exporters with the right products, services, and commitment. India's requirements for equipment and services for major sectors such as energy, environmental, healthcare, high-tech, infrastructure, transportation, and defense will exceed tens of billions of dollars in the mid-term as the Indian economy further globalizes and expands. As per the latest data available, India's GDP growth for FY 2013-14 was 7%. With expected continuance of the government's liberal policies, India has potential for a sustained high growth for the next couple of years and the U.S. companies must seize the opportunities to enter the rising Indian market.
US Exports to India in CY 2011: $21.6 billion
Imports from India in CY 2011 : $36.2 billion
Total bilateral trade in CY 2011: $57.8 billion
US Companies can form the following types of business entities in India: Private Limited Company, Public Limited Company, Limited Liability Partnership, Unlimited Company, Partnership and Sole Proprietorship.
American companies also have the options of forming the following type of business entities: Liaison Office/Representative Office, Project Office, Branch Office, and Joint Venture Company.
It must be noted that a Joint Venture Company is not a separate type of legal entity; it could be either a Private Limited Company, a Public Limited Company, or an Unlimited Company.
Similarly a wholly owned Subsidiary of a foreign company in India could be either a Private Limited Company, a Public Limited Company, an Unlimited Company, or a Branch Office.
For a US Company, 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. US 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.
Also see Annual Corporate Filings in India for corporate maintenance requirements in India.
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Services Offered by UsMadaan & Co. has helped USA Companies in doing business in India. A careful tax planning is required before opening a subsidiary, branch, joint venture, project office or liaison office in India. Click here to Contact us |
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