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Doing Business in India by Foreign Company

Foreign companies can do business in India within the framework prescribed by Foreign Exchange Management Act (FEMA), Reserve Bank of India (RBI), Foreign Investment Promotion Board (FIPB) and Government of India (GOI). And we provide all sort of professional assistance to foreign companies to set up their business in India including documentation for getting approvals and permissions under various statutes and all the allied matters. We also advise on the methodology to be followed in regard to foreign exchange related matters. What are the forms in which business can be conducted by a foreign company for doing business in India? A foreign company planning to set up business operations in India has only two options as under:

  1. As An Indian Company: Incorporate a company under the Companies Act, 1956, as a Joint Venture (strategic alliances with Indian partner/s) or a Wholly Owned Subsidiary. FDI up to the specified limits against each sector/ activity [as mentioned in Annex-1{PART I, Section I, para 7(a)}] is allowed, subject to applicable laws/ regulations ; security and other conditions in sectors/ activities not listed, FDI is permitted up to 100% on the automatic route, subject to applicable laws/ regulations; security and other conditions.

    For incorporation or registration of an Indian Company, a set of applications has to be filed with Registrar of Companies (ROC) through an eligible corporate law practitioner. Once a company has been duly set-up and incorporated as an Indian company, it is subject to Indian laws and regulations as applicable to other domestic Indian companies.

    A company in India can be formed or set-up with at least two subscribers/ directors and one or both the two subscribers/ directors may be foreign citizens.
  2. As A Foreign Company: Foreign Companies can set up their business in India through setting up of either of following three modes:-

    a)   A Liaison Office / Representative Office or
    b)   A Project Office or
    c)   A Branch Office

    Such offices of the foreign companies can undertake activities permitted under the Foreign Exchange Management (Establishment in India of Branch Office or Other Place of Business) Regulations, 2000. In such a case the foreign Companies have to register themselves with Registrar of Companies (ROC) within 30 days of setting up a place of business in India.

Company Formation in IndiaProcess of Opening of Branch/ Project/ Liaison Office by a foreign company in India: