Foreign companies may set up business in India in any one of pursuing manners while retaining its status like 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 belonging to the company’s products and to explore further avenues. Liaison offices are not allowed to embark on any business or earn any income in India and every one expenses are to 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 have a presence for minimal period of a period of time. It is essentially a branch office launched with the limited purpose for executing a specific project. Foreign companies engaged LLP Incorproation Online in India turnkey construction or installation normally put in 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 different matters in India, like acting as buying and selling agents.
oConducting research, the spot that the parent company is engaged, provided the outcome of this research are made in order 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 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 can be 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 under the 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. economical 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 automated route, if the circumstances specified therein are complied with or obtain an approval from the FIPB.
Foreign companies intending to set up any kind of office stated previously activities component the parent company or foreign trading companies in India for promotion of exports from India to be able to obtain a prior approval for this Reserve Bank by submitting an application in the prescribed form to the Central Office of Reserve Bank. On approval of this cases, permission is granted initially for finding a period of 3 years, cause to undergo 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.