| RBI and FEMA Compliances In a new era of global economic cooperation, every small and big entity can seek for foreign capital and finance for tapping the potential business opportunities. Foreign Investment and business ventures in India are primarily governed by FEMA, its Rules and regulations along with permission and approval of RBI in certain cases.
• Setting up of Foreign Subsidiaries.
• Setting up of Branch office, Liaison office, Project office and related
compliances.
• FDI (Foreign Direct Investment) compliances.
• NRI (Non-Resident Indian) investment and compliances.
• External Commercial Borrowing.
A foreign company or an individual planning to set up business operations in India has the following options, to set up a business entity:
• As an incorporated entity under the Companies Act 1956 through Joint
Ventures or wholly owned subsidiaries.
• As an unincorporated entity through liaison office/representative office or
project office or branch office of a foreign company. Liaison Office/Representative Office Liaison office could be established with the approval of Reserve Bank of India . The role of Liaison office is limited to collection of information, promotion of exports and imports and to facilitate technical and financial collaborations. Liaison office cannot undertake any commercial activity directly or indirectly.
Project Office
Foreign companies planning to execute specific projects in India can set up temporary project/site offices in India for carrying out activities only relating to that project. RBI has now granted general permission to foreign entities to establish project offices subject to specified conditions.
Branch Office
Foreign companies engaged in manufacturing and trading activities abroad are allowed to set up branch offices in India for the purposes of export/import of goods, rendering professional or consultancy services, R&D, promoting technical or financial collaborations, representing the parent company, acting as buying/selling agents, rendering technical support to the products supplied by the parent/group companies. Branch offices could be established with the approval of RBI and may remit outside India profit of the branch, subject to RBI guidelines after payment of applicable Indian taxes. |
