Entry Options

ENTRY OPTIONS

A person resident outside India or an entity incorporated outside India may enter India for doing business by:

A foreign entity may also enter India by setting up a non-corporate entity such as a Liaison Office, Branch Office or a Project Office.

Foreign companies may set up a Liaison Office (also known as a Representative Office) in India subject to prior approval from the Reserve Bank of India.

A Liaison Office can undertake only liaison activities, i.e. it can act as a channel of communication between Head Office abroad and parties in India. It is not allowed to undertake any business activity in India and cannot earn any income in India. Expenses of such offices are to be met entirely through inward remittances of foreign exchange from the Head Office outside India. The role of such offices is, therefore, limited to collecting information about possible market opportunities and providing information about the company and its products to the prospective Indian customers.

A Liaison Office can undertake the following activities in India:

  • Represent the parent company/group companies in India
  • Promote export and import from/to India
  • Promote technical/financial collaborations between the parent/group companies and companies in India
  • Act as a communication channel between the parent company and companies in India

Companies incorporated outside India and engaged in manufacturing or trading activities can set up a Branch Office in India subject to prior approval from the Reserve Bank of India.

Such Branch Offices are permitted to represent the parent / group companies and undertake the following activities in India:

  • Represent the parent Company / group Companies in India
  • Act as buying / selling agent for the parent company in India
  • Promote technical or financial collaborations between Indian companies and parent or overseas group company
  • Carry out research work, in areas in which the parent company is engaged
  • Carry out export / import of goods
  • Render professional or consultancy services in India
  • Render services in information technology and devel¬opment of software in India
  • Render technical support to the products sup¬plied by parent/group companies

Normally, the Branch Office should be engaged in the activity in which the parent company is engaged. However, retail trading activities of any nature is not allowed for a Branch Office in India. A Branch Office is also not allowed to carry out manufacturing or processing activities in India.

'Project Office' means a place of business to represent the interests of the foreign company executing a project in India. A project office can only carry out activities relating and incidental to execution of the specific project in India.

A Project Office may be set up by foreign companies without any prior permission provided they have secured a contract from an Indian company to execute a project in India, and

  • The project is funded directly by inward remittance from abroad; or
  • The project is funded by a bilateral or multilateral International Financing Agency; or
  • The project has been cleared by an appropriate authority; or
  • A company or entity in India awarding the contract has been granted Term Loan by a Public Financial Institution or a bank in India for the project.
  • However, if the above criteria are not met, the foreign entity has to approach the Reserve Bank of India for approval.

    Foreign Non-Government Organizations, Non-Profit Organizations, Foreign Government Bodies/Departments may set up a Project Office in India only with the prior permission of the Government.

CONTACT

DAKSH ASSOCIATES

Corporate Law Advisors
K – 39, 2nd Floor,
Hauz Khas Enclave,
New Delhi – 110016 (India)

: (+91) 9312 458 485

: info@dakshindia.com

: www.dakshindia.com