There are several structures available to foreign investors to carry out business in India. This section comprises the methods typically used.
The foreign companies can do business in india in the following ways:
1. Liaison office: Foreign corporations are permitted to open liaison/representative offices in India (subject to obtaining specific approval from the RBI), to undertake liaison activities on their behalf. These offices act as a communication channel between the Head Office of foreign corporations and parties in India.
2.Branch office: Foreign corporations can open branch offices to conduct business in India and this requires a specific approval from the RBI. A foreign corporation cannot undertake any activity in India that is not specifically permitted by the RBI.
3.Project office: A foreign corporation that has secured a contract from an Indian company to execute a project in India can set up a project office in the country without obtaining prior permission of the RBI limited liability partnership (LLP), subject to terms and conditions.
4.Wholly Owned Indian subsidiary companies: Foreign corporations can set up companies in India that are WOS in the form of private companies, subject to prescribed FDI guidelines.
5. Joint Venture Company: Foreign corporations can set up a joint venture company with an Indian firm in partnership in the ratio of 51:49 wherein maximum share will be of Indian firm.
6.Limited Liability Partnership: A Foreign corporation or individual not being a Foreign Portfolio Investor (FPI) or a Foreign Venture Capital Investor (FVCI), is permitted to contribute to the capital of an LLP operating in sectors/ activities where foreign investment up to 100 percent is permitted under automatic route and there are no FDI linked performance conditions.
