Foreign companies may set up business in India any kind of one of pursuing manners while retaining its status for a foreign company:
Liaison Offices – A foreign company can open a liaison office in India to handle its Indian operations, to promote its business interests, to spread awareness among the company’s products in addition to explore further chances. Liaison offices are not allowed to carry on any business or earn any income in India and all expenses are become borne by remittances from abroad.
Project Offices – The project office is the ideal method for companies to establish a home-based business presence in India, if the object is to have a presence for a limited period of schedule. It is essentially a branch office launched 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 on the road 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 final results of this research are made open to 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 around 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 by 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, if for example 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. monetary collaboration with an Indian business house/company in India, could be 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 conditions specified therein are complied with or obtain an approval from the FIPB.
Foreign companies intending to construct any kind of office stated previously 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 Online LLP Formation in India the prescribed form to the Central Office of Reserve Bank. On approval of cases, permission is granted initially for a period of 3 years, subject 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 United states of america.