Foreign companies may set up business in India in any one of subsequent manners while retaining its status as being a foreign company:
Liaison Offices – A foreign company can open a liaison office in India to take good care of its Indian operations, to promote its business interests, to spread awareness among the company’s products so you can explore further placements. Liaison offices are not allowed to stick with it any business or earn any income in India and expenses are for you to become borne by remittances from abroad.
Project Offices – The project office is the ideal method for companies to establish a business presence in India, if the object is to possess a presence for modest period of a period of time. It is essentially a branch office set up with the limited purpose for executing a specific problem. Foreign companies engaged in turnkey construction or installation normally established 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 medicine of:
oRepresenting the parent company or other foreign companies in various matters Online LLP Formation in India India, like acting as buying and selling agents.
oConducting research, the spot that the parent company is engaged, provided the results of this research are made in order to Indian companies
oUndertaking export and import trading ventures.
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 as much 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 by independent legal status, distinct from the parent foreign company.
Under the current foreign investment policy, a wholly owned subsidiary can be established either underneath the automatic route, when 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. in financial collaboration with an Indian business house/company in India, that 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 physical conditions specified therein are complied with or obtain an approval from the FIPB.
Foreign companies intending to construct any type of office mentioned previously activities on behalf of the parent company or foreign trading companies in India for promotion of exports from India should obtain a previous approval for the Reserve Bank by submitting an application in the prescribed form to the Central Office of Reserve Bank. On approval of the cases, permission is granted initially for finding a period of 3 years, subject to the condition that expenses of such office is actually met exclusively out of inward remittances; such offices are not permitted to generate any income in Japan.