Foreign Companies :Options for foreign companies setting up business in India

Fri, 01 Nov 2019 08:13:54 +0000

Foreign Companies: Options for foreign companies setting up business in India

Options for foreign companies setting up business in India

Liaison Office :

A Liaison Office (also known as Representative Office) can undertake only liaison activities, i.e. it can act as a channel of communication between Head Office abroad and parties in India. It is not allowed to undertake any business activity in India and cannot earn any income in India.

Requirements to Establish Liaison Office

A} a profit making track record during the immediately preceding three financial years in the home country
B} Net Worth not less than USD 50,000 or its equivalent.

BRANCH OFFICES BRANCH OFFICES :
Branch Office (BO) is not an incorporated company, but an extension of a foreign company. BOs can, however, engage in commercial business as a representative of the parent company. The BO can conduct research, carry out import and export activity, provide consultancy support, provide services in information technology (IT), and provide technical support for products supplied by its parent company.

Meaning
As per law, Branch Office’ in relation to a company means- (a) any establishment described as a branch by the company, or (b) any establishment carrying on either the same or substantially the same activity as that carried on by the head office of the company, or (c) any establishment engaged in any production, processing or manufacture, but does not include any establishment specified in any order made by the Central Government.

Requirements to Establish Branch Office :

A) A profit making track record during the immediately preceding five financial years in the home country
B) Net Worth not less than USD 100,000 or its equivalent.

PROJECT OFFICE
• General Permission
• Reserve Bank has granted general permission to foreign companies to establish Project Offices in India, provided they have secured a contract from an Indian company to execute a project in India, and
• The project is funded directly by inward remittance from abroad; or
• The project is funded by a bilateral or multilateral International Financing Agency; or
• The project has been cleared by an appropriate authority; or
• A company or entity in India awarding the contract has been granted Term Loan by a Public Financial Institution or a bank in India for the project. However, if the above criteria are not met, the foreign entity has to approach the Reserve Bank of India, Central Office, for approval.

Private limited company

Limited Liability Company

Joint Ventures

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