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 look after its Indian operations, to promote its business interests, to spread awareness within the company’s products in addition to explore further placements. Liaison offices are not allowed to stick with it any business or earn any income in India and expenses are 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 minimal period of any time. It is essentially a branch office fitted 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 the purpose of:
oRepresenting the parent company or other foreign companies a number of matters in India, like acting as buying and selling agents.
oConducting research, wherein the parent company is engaged, provided the outcome 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 significantly as 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 an Indian Company with an independent legal status, distinct from the parent foreign company.
Under the current foreign investment policy, a wholly owned subsidiary can be established either your automatic route, in the event 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. economic collaboration with an Indian business house/company Online LLP Registration Process in India India, which can 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 set up any involving office mentioned previously activities on the part 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 to secure a period of 3 years, depending upon 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 In india.