Company Registration in India

A foreign company planning to set up business operations in India has the following two alternatives:

AS AN INDIAN COMPANY 

A foreign company can commence operations in India by incorporating a company under the Companies Act, 1956 through:

  • Joint Ventures.
  • Wholly Owned Subsidiaries.

Foreign equity in such Indian companies can be up to 100% depending on the necessities of the investor, subject to equity caps in respect of the area of activities under the Foreign Direct Investment (FDI) policy.

Joint Venture With An Indian Partner

Foreign Companies can set up their operations in India by forging strategic alliances with Indian partners.
Joint Venture may entail the following advantages for a foreign investor:

  • Accessible financial resource of the Indian partners.
  • Established contacts of the Indian partners which help smoothen the process of setting up of operations.
  • Established distribution/ marketing set up of the Indian partner.

Wholly Owned Subsidiary Company

Foreign companies can also set up wholly owned subsidiary in sectors where 100% foreign direct investment is permitted under the FDI policy.
Incorporation of the Company For registration and incorporation, set of applications have to be filed with Registrar of Companies (ROC). Once a company has been duly registered and incorporated as an Indian company, it is subject to Indian laws and regulations as appropriate to other domestic Indian companies.

AS A FOREIGN COMPANY 

Foreign Companies can set up their operations in India through:

  • Liaison Office/Representative Office.
  • Project Office.
  • Branch Office.

Such offices can undertake any acceptable activities. Companies have to register themselves with Registrar of Companies (ROC) within 30 days of setting up a place of business in India.

Liaison Office/ Representative Office

Liaison office operates as a channel of communication between the principal place of business or head office and entities in India. Liaison office cannot assume any commercial activity directly or indirectly and cannot, therefore, earn any income in India. Its role is restricted to collecting information about possible market opportunities and providing information about the company and its products to potential Indian customers. It can encourage export/import from/to India and also facilitate technical/financial collaboration between parent company and companies in India.
Approval for establishing a liaison office in India is granted by Reserve Bank of India (RBI).

Project Office

Foreign Companies planning to execute specific projects in India can set up temporary project/site offices in India. RBI has now granted general permission to foreign entities to establish Project Offices subject to specified conditions. Such offices cannot undertake or carry on any activity other than the activity relating and incidental to execution of the project. Project Offices may remit outside India the surplus of the project on its completion, general permission for which has been granted by the RBI.

Branch Office

Foreign companies engaged in manufacturing and trading activities abroad are allowed to set up Branch Offices in India for the following purposes:

  • Carrying out research work, in which the parent company is engaged.
  • depiction professional or consultancy services.
  • Export/Import of goods.
  • Foreign airline/shipping Company.
  • Interpretation services in Information Technology and development of software in India.
  • Promoting technical or financial collaborations between Indian companies and parent or overseas group company.
  • Rendering technical support to the products supplied by the parent/ group companies.
  • Representing the parent company in India and acting as buying/selling agents in India.

A branch office is not allowed to carry out manufacturing activities on its own but is permitted to subcontract these to an Indian manufacturer. Branch Offices established with the approval of RBI, may remit outside India profit of the branch, net of applicable Indian taxes and subject to RBI guidelines Permission for setting up branch offices is granted by the Reserve Bank of India (RBI).

For any information / query regarding Company Formation Services feel free to contact us.