Foreign companies may set up business in India any kind of one of the following manners while retaining its status for a foreign company:
Liaison Offices – A foreign company can open a liaison office in India to pay attention to its Indian operations, to promote its business interests, to spread awareness within the company’s products as well as to explore further open positions. Liaison offices are not allowed to stick with it any business or earn any income in India and all expenses are to borne by remittances from abroad.
Project Offices – The project office is the ideal method for companies to establish a home-based business presence LLP Formation Online in India India, if the object is to possess a presence for a smallish period of a period of time. 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 in India.
Branch Offices – Foreign companies involved in manufacturing and trading activities outside India may open branch offices for extra of:
oRepresenting the parent company or other foreign companies different matters in India, like acting as buying and selling agents.
oConducting research, in which the parent company is engaged, provided the outcomes of this research are made open to Indian companies
oUndertaking export and import trading activities.
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 is definitely an Indian Company a great independent legal status, distinct from parents foreign company.
Under the current foreign investment policy, a wholly owned subsidiary can be established either underneath the automatic route, if for example the conditions specified therein are complied with (specific high priority industries) or obtain an approval from the FIPB.
Joint venture companies – Foreign companies may set up a joint venture company i.e. economic 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 stipulations 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 the parent company or foreign trading companies in India for promotion of exports from India in order to be obtain a previous approval for this Reserve Bank by submitting an application in the prescribed form to the Central Office of Reserve Bank. On approval of such cases, permission is granted initially for a period of three years, foreclosures the condition that expenses of such office will be met exclusively out of inward remittances; such offices are not permitted create any income in United states of america.