SETTING UP BUSINESS IN INDIA BY FOREIGN COMPANIES

1. 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 permitted activities. Companies have to register themselves with Registrar of Companies (ROC) within 30 days of setting up a place of business in India.
		1.a) Liaison office/ Representative office Liaison office acts as a channel of communication between the principal place of business or head office and entities in India. Liaison office cannot undertake any commercial activity directly or indirectly and cannot, therefore, earn any income in India. Its role is limited to collecting information about possible market opportunities and providing information about the company and its products to prospective Indian customers. It can promote 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). 1.b) 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. 1.c) Branch Office
		Foreign companies engaged in manufacturing and trading activities abroad are allowed to set up Branch Offices in India for the following purposes: Export/Import of goods Rendering professional or consultancy services Carrying out research work, in which the parent company is engaged. Promoting technical or financial collaborations between Indian companies and parent or overseas group company. Representing the parent company in India and acting as buying/selling agents in India. Rendering services in Information Technology and development of software in India. Rendering technical support to the products supplied by the parent/ group companies. Foreign airline/shipping Company. 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).

Procedural Requirements for RBI approval

The application has to be made in form FNC-1 and submitted along with the following documents:

1. Copies of last three years audited Balance Sheet, Profit & Loss Account of the Parent Company.

2. Undertaking that the Liaison office will not carry out any trading and commercial activity in India.

3. Translated English version of the Company’s Certificate of Incorporation/Registration, Memorandum & Articles of Association

4. English version of the Copy of the Board resolution for opening office in India

5 Reasons for opening office in India like business transacted, details of customers, vendors etc.

6. Company’s profile with brief history, product details, group companies etc.

7. Special power of Attorney in favor of a local representative duly notarized

Procedural Requirements for registration with Registrar of Companies

Form – 44 is required to be filed along with the following documents & requisite fees

1. Reserve Bank of India ( RBI) approval letter
2. Translated English version of the Company’s Certificate of Incorporation/Registration, Memorandum & Articles of Association

3. Power of attorney & Board Resolution in favor of authorized representative