What are the best ways to enter the Indian Market?

 Foreign Company Registration in India


India, in recent years, has witnessed a huge surge in foreign company registration in India and become one of the most attractive investment destinations of the world. It is world’ 7 largest economy with GDP of approx. USD. 3.5 Trillion. It is a huge market of middle class consumer base, friendly business environment and skilled labour force which provides an opportunity to global companies to set up their business in India

The government has also tried to provide an investor friendly environment with Ease of doing business in India and introduced some schemes like “Make in India” “product linked Incentive schemes which has really attracted foreign companies. There is immense growth in Information technology, Electronics, Automobiles and pharmaceuticals sectors in India.

This has resulted in more and more foreign company registration in India.

Various options available to foreign companies to enter into Indian market.

There are many options available for foreign companies to enter into an Indian market.

Broadly, they may enter into an Indian market either by way of unincorporated entities or by way of an incorporated entities.

Unincorporated Entities

·         Branch office –   Foreign companies engaged in manufacturing and trading activities abroad are allowed to set up branch office in India subject to approval of RBI. Also, they can be engaged in only permissible business activities in India. The approval is granted for 3 years after which again it needs to be renewed. Since tax rates of Branch rate are quite high, this is not a viable option.

 

·         Liaison office –   Liaison office acts as a channel of communication between foreign company and Indian customers. Its role is to representing parent company. They cannot conclude contract on behalf of parent company. Since they cannot be engaged in any business activities, they are not taxable in India. RBI approval is required for establishing Liaison office in India.

 


 

·         Project office-    A project office operate similarly to branch office , main difference being that Project office is established for specific project and need to be closed down once project is completed. For project office also prior approval of RBI is required.


Incorporated Entities

·         Wholly Owned Subsidiary Company

One of the options available to foreign companies for setting up business in India in the form of incorporated entities is to form a subsidiary company of parent companies in India. Subsidiary company registration in India is one of the most popular forms of entity registration in India by foreign enterprises. It is easy to incorporate as compare to other entities and has lowest tax rates. Subsidiary company registration is an online process and companies for PAN India can be incorporated sitting at one place. It can do all the business activities without any restriction.

·         Limited liability partnership-   This is second most popular form of entity registration after subsidiary company. This structure provides flexibility of both partnership and corporate form of entity. The approval for LLP registration is given by Registrar of Companies.

 

·         Joint venture-   Joint ventures are another way of joining of hands by Indian and foreign partners for a specific project, where two or more companies came together to form a new entity from its parent firm. Where 100% FDI is not allowed JV is best option with low-risk.

What are the routes for investment in a country?

Any foreign companies/investor can make investment in India through following routes:-

·         Automatic Route FDI: The foreign entity does not require the prior approval of the government or RBI

·         Government Route FDI: The foreign entity is compulsory to take approval of government.

Presently, in India, almost 95% business and sectors are covered under automatic route and prior approval of government is required only for some specified sectors.

Thus, this is the right time for foreign companies to setup business in India and sell their products or services.

 

At EzyBiz India, we asssit foreign companies in setting up business in India in the form of WOS, BO,LO, JVs. We also assist in post incorporation Accounting, tax and regulatory compliance. You may contact us @ +919899217778 or visit our website www.ezybizindia.in

 

 

Location: Singapore

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