FDI & Business Setting-up

Foreign Direct Investment & Business Setting-up Services:

To Setting-up a business in India certain approvals, permissions and registrations are mandatory from FIPB/RBI and from other regulators, Departments and Authorities. We will assist you to getting approval from FIPB, RBI, for your foereign direct investment (FDI), to obtain PAN, TAN, open a Bank Account, Importer Exporter Code (IEC) from the Director General of Foreign Trade Value Added Tax (VAT) & Central Sales Tax (CST) Registration, Mumbai. Profession Tax Registration etc. so as you can operate the business at the earliest.

To start with the Investor need to find out an appropriate Vehicle to carry on his business such as LLP/Company/Subsidiary Company/Branch office or Laisoning office. Once selected the appropriate vehicle the Investor need to Register the same with appropriate authorites like Registrar of Companies and in case of branch or laisoning office with the Reserve Bank of India.

Foreign Exchange Management, Strategy & Compliances:

 Now all the Foreign Exchange transactions are regulated by the  Foreign Exchange Management Act  (FEMA),1999 and the Rules and Regulations formed under the said Act. The Act applies to all branches, offices and agencies outside India, owned or controlled by a person resident in India. FEMA emerged as an investor friendly legislation which is purely a civil legislation in the sense that its violation implies only payment of monetary penalties and fines. However, under it, a person will be liable to civil imprisonment only if he does not pay the prescribed fine within 90 days from the date of notice but that too happens after formalities of show cause notice and personal hearing.

Various applications to Reserve Bank of India; 

  • Setting up of an Indian Branch Office outside India;
  • Opinion on the various procedures relating to bringing in of the foreign funds/ investments;
  • External Commercial Borrowings;
  • Foreign Currency Convertible Bonds;
  • Preference Shares (Non convertible or partially convertible);
  • Foreign Currency Exchangeable Bonds;
  • For the Inward remittance of the Foreign Companies;
  • Setting up of a Branch Office in India of a Foreign Company;
  • Application and approval of Foreign Investment Promotion

Once the Registration process is Completed the Company need to obtain the following Registrations and processes to proceed with your business operations in India.

  • Apply for PAN(Permanent Account Number)
  • Apply For TAN (Tax Account Number)
  • Obtain VAT (Value Added Tax) and/or Service Tax Registration
  • Obtain Professional Tax Registration.
  • Obtain Shop & Establishment License.

Open a branch office or Liasoning office in India

Companies registered outside India (Foreign Company) can establish their operations in India without registering a subsidiary company. The scope of operation of such offices is limited and is preferred for representative office, sourcing, technical support, market support in India

The steps involved in establishing a branch / liaison office in India are:

  • RBI approval through an authorized dealer of category I bank
  • Registration with Registrar of Companies, New Delhi.

Eligibility Criteria

  1. I) Basic criteria
  • Reserve Bank Route — Principal business of the foreign entity falls under sectors where 100 per cent foreign direct investment (FDI) is permissible under the automatic route.
  • Government Route — Principal business of the foreign entity falls under the sectors where 100 per cent FDI is not permissible under the automatic route. Applications from entities falling under this category are considered by the Reserve Bank, in consultation with the Government of India, Ministry of Finance
  1. II) Additional criteria
  2. i) Track Record:

For Branch Office — a profit making track record during the immediately preceding five financial years in the home country.

  • For Liaison Office — a profit making track record during the immediately preceding three financial years in the home country.
  1. ii) Net Worth [total of paid-up capital and free reserves, less intangible assets as per the latest Audited Balance Sheet or Account Statement certified by a Certified Public Accountant or any Registered Accounts Practitioner by whatever name].

For Branch Office — not less than USD 100,000 or its equivalent.

For Liaison Office — not less than USD 50,000 or its equivalent.