Guidelines for foreign company setting up business in India

Overseas businesses may set up their branches in India in any one of the following ways while preserving its recognition as a foreign firm:.

Liaison Offices - A foreign firm could open up a liaison office in India to take care of its Indian operations, to advertise its office interests, to spread awareness about its products and to check out additional opportunities. Liaison offices cannot carry out any type of business or earn any money in India and all costs are to be taken care by remittances from foreign.

 

Project Offices - The project office is the best way for foreign company setting up a business existence in India, if the things are to be set up for a limited time only. It is basically a branch office established with the restricted objective for implementing a specific project. Foreign firms involved in turnkey construction or establishment generally set up a project office for their functioning in India.

Branch Offices - Overseas companies involved in production and trading jobs outside India might open up branch offices for the objective of:.

• To represent parent company or other foreign companies in different matters in India such as buying and selling agents.

• To carry out research, in which the parent company is involved given that the outcomes of this research are provided to Indian firms.

• To carry out export and import trading

• To market technical and monetary ventures between foreign and Indian companies.

Trading companies – Foreign firms might invest in trading companies involved mainly in exports. Such trading firms are considered at par with national trading companies in compliance with the trde policy.

The RBI accords automated approval for foreign equity around 51% for establishing trading companies involved largely in exports. Other proposals, which do not satisfy the standards for automated approval, can be taken to the Foreign Investment Promotion Board, i.e. "FIPB".

Wholly possessed subsidiaries – Foreign firms might establish up a wholly owned subsidiary, which is an Indian Firm with an independent legal recognition, different from the parent foreign business.

Joint venture companies - Foreign firms may set up a joint venture firm i.e. in financial association with an Indian company/business in India, which is an Indian Firm with an independent legal recognition, different from the parent foreign business.

A foreign company setting up any type of office as discussed above on behalf of the parent company or overseas trading companies in India for marketing of exports from India have to get a previous approval of the Reserve Bank by submitting an application in the suggested form to the Central Office of Reserve Bank. On approval of such cases, consent is given at first for a period of 3 years, based on the condition that expenses of such workplace will be fulfilled solely from internal remittances; such workplaces are not allowed to produce any earnings in India.

In this regard many corporate law firms are offering NRI services Bangalore. These firms assist foreign companies to establish their presence in India.

About Balakrishna Consulting

Balakrishna Consulting is a leading corporate law firm of company secretaries, cost accountants, advocates and CA in Bangalore. The company is specialised in providing company incorporation services, company formation, LLP registration, assistance in setting up business in India and NRI services Bangalore. Balakrishna Consulting has been delivering services to around 50 foreign clients from 23 different nations such as France, UK, USA, Spain, Holland, Hungary, Taiwan, China, Singapore, Japan, South Africa and South America. BCL is associated with MSI Global Alliance (MSI), a top ranked global association of independent accountancy and law firms.