Foreign companies may set up business in India in any 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 maintain its Indian operations, to promote its business interests, to spread awareness belonging to the company’s products so you can explore further opportunities. Liaison offices are not allowed to persevere any business or earn any income in India and expenses are to borne by remittances from abroad.
Project Offices – The project office is the ideal method for companies to establish a legitimate income opportunity presence in India, if the object is to possess a presence for constrained period of time. It is essentially a branch office arranged with the limited purpose for executing a specific projects. 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 the purpose of:
oRepresenting the parent company or other foreign companies within a matters in India, like acting as buying and selling agents.
oConducting research, in which the parent company is engaged, provided the final results of this research are made to be able to Indian companies
oUndertaking export and import trading activity.
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 up to 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 a good independent legal status, distinct from the parent foreign company.
Under the current foreign investment policy, a wholly owned subsidiary can be established either the particular automatic route, when 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 in India, which 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 stipulations specified therein are complied with or obtain an approval from the FIPB.
Foreign companies intending to put in any regarding office mentioned above activities portion of the parent company or foreign trading companies in India for promotion of exports from India should obtain an earlier approval for the Reserve Bank by submitting an application in the prescribed form to the Central Office of Reserve Bank. On approval of such cases, permission is granted initially for a period of 3 years, depending upon the condition that expenses of such office LLP Registration Online in India order to met exclusively out of inward remittances; such offices are not permitted produce any income in India.