Foreign companies may set up business in India in any one of pursuing manners while retaining its status as the foreign company:
Liaison Offices – A foreign company can open a liaison office in India to pay attention to its Indian operations, to promote its business interests, to spread awareness of the company’s products and to explore further avenues. Liaison offices are not allowed to preserve 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 venture presence in India, if the object is to have a presence for minimal period of a period of time. It is essentially a branch office fitted with the Limited Liability Partnerhsip Registration Online India 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 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, during which 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 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 a Indian Company with 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, when the conditions specified therein are complied with (specific high priority industries) or obtain an 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 physical conditions specified therein are complied with or obtain an approval from the FIPB.
Foreign companies intending to set up any type of office mentioned above activities on behalf of 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 such cases, permission is granted initially for finding a period of 3 years, depending upon the condition that expenses of such office in order to met exclusively out of inward remittances; such offices are not permitted create any income in In india.