Foreign companies may set up business in India in any one of subsequent manners while retaining its status as being a foreign company:
Liaison Offices – A foreign company can open a liaison office in India to maintain its Indian operations, to promote its business interests, to spread awareness with the company’s products as well as to explore further placements. Liaison offices are not allowed to embark on any business or earn any income in India and every one 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 a smallish period of a period of time. It is essentially a branch office set up with the limited purpose for executing a specific problem. 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 extra of:
oRepresenting the parent company or other foreign companies in various matters Online LLP Registration Process in India India, like acting as buying and selling agents.
oConducting research, wherein the parent company is engaged, provided the outcomes of this research are made open 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 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 can be an Indian Company through having an 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, if for example 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 automated route, if the stipulations specified therein are complied with or obtain an approval from the FIPB.
Foreign companies intending to build any type of office mentioned above activities component the parent company or foreign trading companies in India for promotion of exports from India have to obtain a prior approval of 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, cause to undergo the condition that expenses of such office in order to met exclusively out of inward remittances; such offices are not permitted to generate any income in Of india.