Foreign companies may set up business in India in any one of the following manners while retaining its status like a foreign company:
Liaison Offices – A foreign company can open a liaison office in India to look after its Indian operations, to promote its business interests, to spread awareness with the company’s products this particular explore further chances. Liaison offices are not allowed to embark on any business or earn any income in India and every one of expenses are to be borne by remittances from abroad.
Project Offices – The project office is the ideal method for companies to establish a legitimate income opportunity presence in India, if the object is to have a presence for a smallish period of season. It is essentially a branch office set up with the limited purpose for executing a specific undertaking. Foreign companies engaged in turnkey construction or installation normally set up a project office for their operations Online LLP Incorporation in India India.
Branch Offices – Foreign companies engaged in manufacturing and trading activities outside India may open branch offices for write-up of:
oRepresenting the parent company or other foreign companies different matters in India, like acting as buying and selling agents.
oConducting research, the spot that the parent company is engaged, provided the outcome of this research are made in order to Indian companies
oUndertaking export and import trading activity.
oPromoting technical and financial collaborations between Indian and foreign companies.
Trading companies – Foreign companies may invest in trading companies engaged primarily in exports. Such trading companies are treated at par with domestic trading companies in accordance with the trade policy.
The RBI accords automatic approval for foreign equity up to 51 per cent for setting up trading companies engaged primarily in exports. All other proposals, which do not meet the criteria for automatic approval, can be addressed to the Foreign Investment Promotion Board, i.e. “FIPB”.
Wholly owned subsidiaries – Foreign companies may set up a wholly owned subsidiary, which is an Indian Company a good independent legal status, distinct from parents foreign company.
Under the current foreign investment policy, a wholly owned subsidiary can be established either the actual automatic route, generally if the conditions specified therein are complied with (specific high priority industries) or get an approval from the FIPB.
Joint venture companies – Foreign companies may set up a joint venture company i.e. economical collaboration with an Indian business house/company in India, which is an Indian Company with an independent legal status, distinct from the parent foreign company.
Under the current foreign investment policy, a joint venture can be established either under the automatic route, if the circumstances specified therein are complied with or obtain an approval from the FIPB.
Foreign companies intending to build any type of office mentioned previously activities component the parent company or foreign trading companies in India for promotion of exports from India to be able to obtain an earlier approval from the Reserve Bank by submitting an application in the prescribed form to the Central Office of Reserve Bank. On approval of this cases, permission is granted initially to secure a period of 3 years, subject to the condition that expenses of such office in order to met exclusively out of inward remittances; such offices are not permitted to generate any income in Of india.