Foreign companies may set up business in India in any one of the next manners while retaining its status for 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 within the company’s products as well as to explore further chances. Liaison offices are not allowed to persevere any business or earn any income Online LLP Formation in India India and all sorts of expenses are become borne by remittances from abroad.
Project Offices – The project office is the ideal method for companies to establish a venture presence in India, if the object is to have a presence for modest period of season. It is essentially a branch office make with the limited purpose for executing a specific upgrade. Foreign companies engaged in turnkey construction or installation normally set-up a project office for their operations in India.
Branch Offices – Foreign companies engaged in manufacturing and trading activities outside India may open branch offices for the purpose of:
oRepresenting the parent company or other foreign companies within a matters in India, like acting as buying and selling agents.
oConducting research, wherein the parent company is engaged, provided the final results of this research are made open to Indian companies
oUndertaking export and import trading situations.
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 around 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 a 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 particular automatic route, if the conditions specified therein are complied with (specific high priority industries) or get the approval from the FIPB.
Joint venture companies – Foreign companies may set up a joint venture company i.e. monetary collaboration with an Indian business house/company in India, could be 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 automated route, if the circumstances specified therein are complied with or obtain an approval from the FIPB.
Foreign companies intending to put in any type of office mentioned above activities on the part of the parent company or foreign trading companies in India for promotion of exports from India should obtain a prior 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 for your period of three years, subject to the condition that expenses of such office will be met exclusively out of inward remittances; such offices are not permitted create any income in India.