Practice Areas: Legal process Outsourcing

Setting Up Operations In India

A foreign company has to make a choice as to its legal entity for carrying out business activities in India. The choice of legal entity depends on the type of business operations in India. As a general guideline, a foreign company may do business in India in any of the following manners while retaining its status as a foreign company:

1. As a foreign company without carrying on any business activities within Indian boundaries;
2. Through a liaison office in India;
3. Through a project office in India;
4. Through a branch office in India;
5. As an Indian Company with 100% shareholding held by the foreign company. Such a company is called 100% subsidiary of the foreign company.
6. As an Indian company in joint venture with one or more Indian partners.

As a liaison office is not permitted to carry on any trading, commercial or industrial activity in India or earn any income from the day-to-day activities carried on by it in India, it is suitable as a mere representative office, which acts as a facilitator for the parent company which is currently gauging the market scenario in India. A branch on the other hand is permitted to carry on certain specified activities. A subsidiary is treated almost at par, with a domestic company. In some sectors, there is a cap on foreign investments and prior approval of the regulatory authorities such as the Foreign Investment Promotion Board is also required. In other cases, only the Reserve Bank of India is required to be intimated within a specified period of time from the date of issue of shares to foreign shareholders.

Our practice area relating to assisting our clients in setting up their operations in India focuses on:

• Advising for entry strategy for India.
• Guiding our clients through the various laws, rules and regulations, the compliance of which are necessary for setting up of operations in India.
• Advising Our Clients to structure their investments in a most tax optimal manner.
• Assisting our clients in filing applications with the various regulatory authorities and obtaining a clearance, such as clearance from the Foreign Investment Promotion Board (FIPB), if the activities of the client require such a clearance and do not fall under the automatic approval route
• Assisting in incorporation of the company by drafting of and filing the relevant incorporation documents with the Registrar of Companies;
• Advising on the various compliance procedures under relevant laws, rules and regulations

Our advice is a comprehensive blend of business strategy, in-depth industry specific legal issues and global tax minimization.