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Why Do Business In India
·
Strategic
location having access to the vast domestic and South Asian market.
·
One
of the largest pools of skilled English speaking manpower i.e. scientists,
engineers, technicians and managers in the world available at highly
competitive costs.
·
Policy
environment that provides freedom of entry, investment, location, choice of
technology, production, import and export.
·
A
long history of stable parliamentary democracy.
·
A
large and rapidly growing consumer market.
Establishing a Business Presence In India
o
Foreign investors can directly set up operation
in India through the following routes:
·
Liaison office / Representative office
·
Project office
·
Branch office
·
By Establishing an Indian entity
o
Wholly Owned Subsidiary
o
Joint Venture with an Indian
Company
Liaison/Representative Office - Scope of
Activities
·
Testing the waters without committing major resources.
·
Developing trade relations.
·
Collecting market information.
·
Inspection & coordination of purchases for export to parent company.
·
Regulatory / legal framework
·
Office expenses to be met through
foreign exchange remittance from Head Office abroad.
·
No business activity permitted.
·
Prior RBI approval required.
·
Liaison office not taxed.
·
Regular filings with Registrar of Companies (ROC).
Project Office - Scope of Activities
·
Office for undertaking a specific project.
·
Approvals granted for both Government approved and private sector
projects.
·
Regulatory / legal framework
·
Specific approval to be obtained from RBI’s regional office.
·
Regular ROC filings to be made.
Branch Office - Scope of Activities
·
Scope of
activities larger than that of a liaison office.
·
Represent
parent or other foreign company as buying/selling agent.
·
Research
in the sector in which the parent company is involved.
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| हिन्दी: ताजमहल English: Taj Mahal, Agra, India. Deutsch: Taj Mahal im indischen Agra. Español: Vista del Taj Mahal, Agra, India. Français : Le Taj Mahal, à Âgrâ, en Inde. Русский: Мавзолей Тадж-Махал, Агра, Индия. (Photo credit: Wikipedia) |
·
Render
professional or consultancy services.
·
Undertake
export/import trading activities.
·
Regulatory
/ legal framework
·
Prior
RBI approval to be obtained.
·
Regular
filings to be made with the ROC.
·
Own
manufacturing activities not permitted.
·
Taxed @
42% (including surcharge) of profits of Indian branch.
Foreign Investment Guidelines
o
Automatic Approval Route
·
No government or RBI approval required for investment within specified
sectoral caps.
o
FIPB Approval Route
·
Sector specific requirements
·
Previous joint venture or technology transfer /
trademark
o
agreement in India
·
Incorporation of an Indian company –private or public
·
Specific FIPB approval to be sought if investment does not qualify for
automatic approval.
·
Corporate tax @ 35%.
·
Specifics
to keep in mind while deciding the nature of the company
·
Private
company to have minimum 2 members and a minimum paid up capital of Rs.
1,00,000/- (approx USD 2000)
·
Public
company to have minimum 7 members and a minimum paid up capital of Rs. 5,00,000/-. (approx USD 10,000)
Setting up a Joint Venture Company
·
Approval requirement depending on sector in which investment is made.
·
Taxation as applicable to an Indian company.
·
Both the principal investment and the income are allowed to be
repatriated outside India without restrictions.
·
Dividend taxable in the hands of the shareholder.
·
Running of the Indian company set up through a
joint venture or as a wholly owned subsidiary
·
Meetings
·
ROC filings
·
Labour And Employment
·
Taxation
o Taxation of foreign
personnel in India
o Tax treaties
Other Routes to invest in India
·
Technical Collaboration
o
Investing in an existing Indian company
§
Fresh issue of shares by an Indian company
§
Purchase of Existing Shares in an Indian
company by way of
transfer
o
Foreign Institutional Investor
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