Setting up business in India

Strategies for Foreign Companies/Investors for doing Business in India

A foreign company planning to set up business operations in India has the following options:

  1. As an Indian Company

A foreign company can commence operations in India by incorporating a company under the Companies Act, 2013 through

  • Joint Ventures; or
  • Wholly Owned Subsidiaries

Foreign equity in such Indian companies can be up to 100% depending on the requirements of the investor, subject to equity caps in respect of the area of activities under the Foreign Direct Investment (FDI) policy.

Joint Venture With An Indian Partner

Foreign Companies can set up their operations in India by forging strategic alliances with Indian partners.

Joint Venture may entail the following advantages for a foreign investor:

  • Established distribution/ marketing set up of the Indian partner
  • Available financial resource of the Indian partners

Wholly Owned Subsidiary Company

Foreign companies can also to set up wholly owned subsidiary in sectors where 100% foreign direct investment is permitted under the FDI policy.

Incorporation of Company

For registration and incorporation, an application has to be filed with Registrar of Companies (ROC). Once a company has been duly registered and incorporated as an Indian company, it is subject to Indian laws and regulations as applicable to other domestic Indian companies.

See also Formation of Subsidiary in India | Incorporating company in India | Procedure for Formation of Company in India

  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.