Foreign companies may set up business in India in any one of next 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 with the company’s products as well as to explore further chances. Liaison offices are not allowed to carry 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 legitimate income opportunity presence in India, if the object is to possess a presence for minimal period of schedule. It is essentially a branch office set up with the Limited Liability Partnerhsip Registration Online India purpose for executing a specific upgrade. Foreign companies engaged in turnkey construction or installation normally set up 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 write-up of:
oRepresenting the parent company or other foreign companies different matters in India, like acting as buying and selling agents.
oConducting research, wherein the parent company is engaged, provided the final results of this research are made available 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 can be 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 underneath the automatic route, generally if 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, could be 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 stipulations specified therein are complied with or obtain an approval from the FIPB.
Foreign companies intending to set up any kind of office mentioned above activities component the parent company or foreign trading companies in India for promotion of exports from India have to obtain an earlier approval from 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 three years, depending upon the condition that expenses of such office is actually met exclusively out of inward remittances; such offices are not permitted to create any income in Japan.