Doing Business In India - Setting up a Foriegn Company

Foreign Investor can commence business in India as:

Indian Company

• Joint Venture

• Wholly Owned Subsidiary JV/ Wholly Owned Subsidiary as (i) Private Limited or (ii) Public Limited Company, s.t. Companies Act, 2013

Foreign Company

• Liaison Office To represent the parent company in India

• Branch Office To undertake activities such as Export, Import, research, consultancy etc.

• Project Office Activities as per contract to execute project

Limited Liability Partnership

• LLP Subject to provisions of LLP Act, 2008 FDI permitted under automatic route in LLPs operating in sectors/ activities where 100% FDI is allowed, through the automatic route and there are no FDI-linked performance conditions***

Permitted Activities

LO - Liaison Office LO can not undertake any commercial activity and acts as a channel of communication between the principal place of business or head office and entities 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 the parent company and companies in India. It cannot earn any income in India.

BO - Branch Office BO can be set up by foreign companies. The permitted activities include 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 and foreign airline/shipping company. There is a general permission to non-resident companies for establishing BO in the Special Economic Zones (SEZs) to undertake manufacturing and service activities subject to: 

• BOs are functioning in those sectors where 100% FDI is permitted

• BOs comply with Chapter XXII of the Companies Act, 2013

• BOs function on a stand-alone basis

PO - Project Office

PO can be set up to execute specific projects in India and cannot undertake or carry on any activity other than the activity relating and incidental to the execution of the project