A foreign company can commence operations in India by incorporating a company under the Companies Act, 1956 through

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 FDI policy.

Joint Venture: Foreign Companies can set up their operations in India by forging strategic alliances with Indian partners. It may entail the advantages like established distribution/ marketing set up of the Indian partner, available financial resource & established contacts of the Indian partners which help smoothen the process of setting up of operations.

Wholly Owned Subsidiary: Foreign companies can also set up wholly owned subsidiary is sectors where 100% foreign direct investment is permitted under the FDI policy.

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

Foreign Companies can set up their operations in India through

Liaison Office / Representative Office: It acts a channel of communication between the principal place of business & its entities in India. Its role is limited to collection of information about possible market opportunities & providing information about the company & its products to the prospective Indian customers. It can promote export/import from/to India & also facilitate technical/financial collaboration between parent company & companies in India.

Project Office: Foreign companies planning to execute specific projects in India have now been granted general permission by Reserve Bank of India (RBI) to set up temporary project/site offices in India, subject to specified conditions. Such offices cannot undertake or carry on any activity except that incidental & relating to the execution of the project.

Branch Office: Foreign companies engaged in manufacturing and trading activities abroad are allowed to set up Branch Offices in India for the following purposes

Export/Import of goods

Rendering professional or consultancy services

Carrying out research work, in which the parent company is engaged

Promoting technical or financial collaborations between Indian companies and parent or overseas group company.

Representing the parent company in India and acting as buying/selling agents in India.

Rendering services in Information Technology and development of software in India.

Rendering technical support to the products supplied by the parent/ group companies.

Foreign airline/shipping Company.

Branch Office on a ‘Stand Alone Basis’: such branch offices would be isolated & restricted to the Special Economic Zone (SEZ) alone & no business activity/transaction will be allowed outside the SEZs in India, which include branches/subsidiaries of its parent office in India.