Foreign companies may set up business in India any kind of one of subsequent 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 of the company’s products this particular explore further avenues. Liaison offices are not allowed to carry on any business or earn any income in India and all sorts of 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 in India, if the object is to have a presence for modest period of time. It is essentially a branch office arranged 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 extra of:
oRepresenting the parent company or other foreign companies in a variety of matters in India, like acting as buying and selling agents.
oConducting research, wherein the parent company is engaged, provided the results of this research are made there for Indian companies
oUndertaking export and import trading situations.
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 a Indian Company through having an independent legal status, distinct from parents foreign company.
Under the current foreign investment policy, a wholly owned subsidiary can be established either your automatic route, when the conditions specified therein are complied with (specific high priority industries) or get an 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 physical conditions specified therein are complied with or obtain an approval from the FIPB.
Foreign companies intending to build any form of office mentioned previously activities portion of the parent company or foreign trading companies LLP Formation Online in India India for promotion of exports from India to be able to obtain a previous approval from the Reserve Bank by submitting an application in the prescribed form to the Central Office of Reserve Bank. On approval of cases, permission is granted initially to secure a period of three years, subject to the condition that expenses of such office will met exclusively out of inward remittances; such offices are not permitted create any income in Japan.