|
Liaison
Office/Representative Office
A
liaison office is not allowed to undertake any business
activity in India and cannot earn any income in India.
The role of such offices is limited to collecting information
about possible market opportunities and providing information
about the company and its products to prospective Indian
customers.
RBI
has permitted the following activities to be carried
by the branch office in India vide Schedule I of Foreign
Exchange Management (Establishment in India of Branch
or Office or Other Place of Business) Regulations, 2000:
- Representing
in India the parent company/group companies.
- Promoting
export import from/to India.
- Promoting
technical/financial collaborations between parent/group
companies and companies in India.
- Acting
as communication channel between the parent company
and Indian companies..
Permission
for such offices is initially granted for a period of
three years and may be extended from time to time.
Project
Office
Foreign
companies planning to execute specific projects in India
can set up temporary project/site offices in India with
the approval of the RBI. Such approval is generally
accorded in respect of a Government approved project.
The Project/site office is not permitted by RBI to undertake
or carry out any activity other than the activity relating
and incidental to execution of the project.
Branch
Office
Foreign
companies engaged in manufacturing and trading activities
abroad may set up Branch offices in India, with the
permission of RBI. RBI has permitted the following activities
to be carried by the branch office in India vide Schedule
I of Foreign Exchange Management (Establishment in India
of Branch or Office or Other Place of Business) Regulations,
2000:
- Export/Import
of goods
- Rendering
professional or consultancy services.
- Carrying
out research work, in which the parent company is
engaged.
- Promoting
technical or financial collaborations between Indian
companies and parent or overseas group company.
- Representing
the parent company in India and acting as buying/selling
agent in India.
- Rendering
services in Information Technology and development
of software in India.
- Rendering
technical support to the products supplied by parent/group
companies.
- Foreign
airline/shipping company.
Wholly
owned Indian company
A
foreign company can commence operations in India through
the incorporation of a company under the provisions
of the Indian Companies Act, 1956. Foreign equity in
such Indian companies can be up to 100 per cent depending
on the business plan of the foreign investor, prevailing
investment policies of the Government and receipt of
requisite approvals.
Joint
Venture with an Indian Partner
Foreign
companies can set up their operations in India through
incorporation of a company under the provisions of the
Indian Companies Act,1956 by forging strategic partnerships
with Indian partners. The following will be the advantages
to the foreign investor:
- Established
contacts of the Indian partner which help smoothen
the process of setting up operations
- Established
distribution /marketing set up of the Indian partner
- Available
financial resources of the Indian partner
|
