Foreign companies may set up business in India any kind of 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 handle its Indian operations, to promote its business interests, to spread awareness within the company’s products and to explore further placements. Liaison offices are not allowed to stick with it any business or earn any income in India and all expenses are to be borne by remittances from abroad.
Project Offices – The project office is the ideal method for companies to establish a home-based business presence in India, if the object is to possess a presence for a smallish period of time. It is essentially a branch office set up with the limited purpose for executing a specific project. 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 write-up of:
oRepresenting the parent company or other foreign companies in various matters in India, like acting as buying and selling agents.
oConducting research, in which the parent company is engaged, provided outcomes of this research are made available to Indian companies
oUndertaking export and import trading games.
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 can be an Indian Company with an 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, if the conditions specified therein are complied with (specific high priority industries) or ask for 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, and 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 construct any form of office already stated activities component the parent company or foreign trading companies in India for promotion of exports from Online LLP Registration Procedure India have to obtain a previous approval of the Reserve Bank by submitting an application in the prescribed form to the Central Office of Reserve Bank. On approval for these cases, permission is granted initially for finding a period of 3 years, subject to the condition that expenses of such office can met exclusively out of inward remittances; such offices are not permitted create any income in Of india.