Foreign companies may set up business in India any kind of one of next manners while retaining its status as 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 within the company’s products so you can explore further open positions. Liaison offices are not allowed to persevere any business or earn any income in India and all 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 have a presence for minimal period of season. It is essentially a branch office arranged with the limited purpose for executing a specific upgrade. Foreign companies engaged in turnkey construction or installation normally established 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 on the road of:
oRepresenting the parent company or other foreign companies in a variety of matters in India, like acting as buying and selling agents.
oConducting research, during which the parent company is engaged, provided outcomes of this research are made there for Indian companies
oUndertaking export and import trading activities.
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 Online LLP Formation in India 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 a Indian Company a great independent legal status, distinct from the parent foreign company.
Under the current foreign investment policy, a wholly owned subsidiary can be established either the actual automatic route, generally if 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. fiscal 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 stipulations specified therein are complied with or obtain an approval from the FIPB.
Foreign companies intending to make 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 an earlier approval for this 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 your period of three years, prone to the condition that expenses of such office will met exclusively out of inward remittances; such offices are not permitted to generate any income in India.