Foreign companies may set up business in India in any one of next 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 within the company’s products and to explore further placements. Liaison offices are not allowed to preserve any business or earn any income in India and all sorts of expenses are become borne by remittances from abroad.
Project Offices – The project office is the ideal method for companies to establish profitable business presence in India, if the object is to have a presence for constrained period of a period of time. It is essentially a branch office set up with the limited purpose for executing a specific project. Foreign companies engaged in turnkey construction or installation normally put in 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 medicine of:
oRepresenting the parent company or other foreign companies a number of matters in India, like acting as buying and selling agents.
oConducting research, in which the parent company is engaged, provided the outcomes of this research are made open 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 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 a Indian Company a good independent legal status, distinct from parents foreign company.
Under the current foreign investment policy, a wholly owned subsidiary can be established either under the automatic route, generally if 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 automatic route, if the physical conditions specified therein are complied with or obtain an approval from the FIPB.
Foreign companies intending to make any kind of office already stated activities portion of the parent company or foreign trading companies in India for promotion of exports from India have to obtain a previous approval for this Reserve Bank by submitting an application LLP Incorproation Online in India the prescribed form to the Central Office of Reserve Bank. On approval of the cases, permission is granted initially for your period of three years, subject to the condition that expenses of such office in order to met exclusively out of inward remittances; such offices are not permitted to get any income in Japan.