Entry Options for Foreign Investors: A foreign company planning to commence business operations in India has the option of setting-up the following type of companies:
- Branch Office
- Liaison / Representative Office
- Project Office
- By Forming a Company in India
1. Branch Office:
Government has allowed foreign companies engaged in manufacturing and trading activities abroad to set up Branch Offices in India for the following purposes:
- To represent the parent company/ other foreign companies in various matters in India e.g. acting as buying/selling agents in India.
- To conduct research work in the area in which the parent company is engaged.
- To undertake export and import trading activities
- To promote possible technical and financial collaborations between the Indian companies and overseas companies.
- Rendering professional or consultancy services.
- 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.
2. Liaison Office:
One of the practices for foreign companies to enter the Indian markets is the setting up of a Liaison/Representative office. A Liaison office is not allowed to undertake any business activity in India and cannot therefore, earn any income in India . The role of such offices is, therefore, limited to collecting information about possible market opportunities and providing information about the company and its products to the prospective Indian Customers.
- Representing in India the parent company/ group companies
- To conduct research work in the area in which the parent company is engaged.
- Promoting export import from/ to India
- Promoting technical/financial collaborations between parent/group companies and companies in India
- Acting as a communication channel between the parent company and Indian companies
- A person resident outside India permitted by the Reserve Bank to establish a Liaison office in India may carry out the following permitted activities
3. Project Office:
Foreign Companies planning to execute specific projects in India can set up temporary project/site offices in India. For this a general approval has been given by RBI subject to fulfillment of certain conditions. Such approval is generally accorded in respect of projects approved by appropriate authorities or where the projects are financed by Indian bank/Financial Institution or a multilateral/ bilateral international financial institution.
4. By Incorporating a Company in India through
- Joint Ventures; or
- Wholly Owned Subsidiaries
Foreign equity in such Indian companies can be up to 100% depending on the sectoral cap under the Foreign Direct Investment (FDI) policy.
Start Up Ventures We have a rich experience as business advisors and financial consultants to plan and oversee the implementation of business initiation plans. Professional support is provided for new Foreign projects in the areas covering the following.
- Identifying appropriate entry route.
- Formation of Legal Entity in India i.e. Incorporation of a company and preparation of Memorandum and Articles of Association and other legal support.
- Due diligence reviews.
- Regulatory approvals Including Foreign Investment Promotion Board (FIPB), Reserve Bank of India (RBI), Secretariat of Industrial Approval (SIA), Registrar of Companies (ROC) and other concerned authorities
- Representative office Facility During the 'in transit period' support for office infrastructure and manpower is provided to the company.