starting-business-in-india-banner

Starting Business in India

We have simplified the process of starting business in India. We take care of all the paper works . We follow very simplified, step by step process to start a Business in India.

We offer host of professional services to NRI's and PIO's settled abroad. Some of the services offered are:

  • Allotment of PAN Number
  • Filing of Return of Income
  • Wealth Tax
  • Capital Gains
  • Specific Advice
  • FEMA / RBI Related Services

Starting A Business In India

Foreign Investments

Entry Options for Foreign Investors: A foreign company that is planning to set up business operations in India has the following few options:

  • Branch Office
  • Liaison/ Representative Office
  • Project Office
  • Company Formation though a Joint Venture or a wholly owned subsidiary.

Routes for Foreign investment

Automatic Route 100% Foreign Direct Investment (FDI) is allowed under the automatic route in all the activities/ sectors without the approval of the Government of India (GOI), except the following:

  • Those activities or items that require an Industrial License
  • A proposal in which the foreign collaborator is already having a venture or tie-up in the country in the same field.
  • In some cases, a proposal for acquisition of shares in an existing Indian company.

Government Approval Route all the activities that does not come under the automatic route and require prior Government approval. The areas/ sectors/ activities hitherto not open to FDI/ NRI investment shall continue to be so unless it is otherwise notified by the Government of India (GOI).

Public Limited Company

A company that can offer shares to the public is termed as a public limited company. The Companies Act 1956 mandates a list of criteria that have to be met by the public limited companies before they start their business operations in India. A few of these criteria are listed below:

  • It should have at least seven shareholders
  • A public company is allowed to start its activities only after procuring the 'Certificate of Commencement of Business'. The 'Certificate of Incorporation' alone will not suffice the purpose.
  • The company should release a prospectus or issue a statement to sell its securities.
  • It must have at least three directors in its board.
  • The company should conduct statutory meeting from time to time.

Private Limited Company

A private limited company is not owned by any governmental body, and it does not offer public shares. The number of shareholders for a private limited company is restricted to a maximum 50, whereas the minimum required is 2. The shareholders, however do not have the power to transfer or trade their shares publicly.

Project Office

All foreign companies are allowed to set up a project office or a site office in India. This facility is allowed as a temporary arrangement, exclusively for the project mentioned in the application, and its activities have to be terminated as soon as the project is over. There are certain conditions mentioned as general permission policy which have to be met before establishing the project offices.

Liaison Office

The activities of a liaison office in India are restricted to collecting information, promoting export and import activities and assisting in both technical and financial collaboration with other groups or companies.

The following are the requirements to set up a Liaison Office/ Representative Office in India.

  • Prior approval from Reserve Bank of India (RBI) is required.
  • An agreement has to be signed stating that the office would not involve in any type of commercial activity in India.

Branch Office

Branch offices are allowed for companies that are involved in manufacturing as well as trading businesses in foreign countries. They need to get prior approval from the RBI. The activities of the branch offices in India are restricted to the following activities alone.

  • Manage the export/import activities
  • Conduct research activities in the same field as the parent company is involved.
  • Offer consultancy services to the customers
  • Facilitate collaboration with Indian companies.
  • Function as the representative/agent of the parent company in India for facilitating the buying/selling activities.
  • Offer technical support/solutions to various products supplied in India by the foreign parent company.
  • Offer necessary Information Technology (IT) services and develop necessary software.

The profit acquired by the approved branch offices can be remitted outside India, after paying the net applicable taxes and meeting other formalities as per the RBI guidelines.

Joint Ventures

Joint Venture companies are the most preferred form of corporate entities for doing business in India. There are no separate laws for joint ventures in India. The companies incorporated in India, even with up to 100% foreign equity, are treated the same as domestic companies. A Joint Venture may be any of the business entities available in India.

A typical Joint Venture is where:

  • Two parties, (individuals or companies), incorporate a company in India. Business of one party is transferred to the company and as consideration for such transfer, shares are issued by the company and subscribed by that party. The other party subscribes for the shares in cash.

The above two parties subscribe to the shares of the joint venture company in agreed proportion, in cash, and start a new business.

  • Promoter shareholder of an existing Indian company and a third party, who/which may be individual/company, one of them non-resident or both residents, collaborate to jointly carry on the business of that company and its shares are taken by the said third party through payment in cash.

Foreign companies are also free to open branch offices in India. However, a branch of a foreign company attracts a higher rate of tax than a subsidiary or a joint venture company. The liability of the parent company is also greater in case of a branch office.

GET IN
INTERESTED IN OUR SERVICES
TOUCH

© 2017 Mercurius Advisory Services Pvt Ltd.

Floret Media

Developed and Managed byFloret Media Pvt. ltd.