Indian Chartered Accountants Firm
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For quick response call us at + 91 9810158561 |
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Convergence of knowledge,
analysis & expertise
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Foreign Investment Services
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Neeraj Bhagat and Co. offers
comprehensive services and consultancy to foreign investors in
facilitating the Foreign Direct Investment (FDI) in almost all
industries. We help them and guide on the issue of holding minority or
majority stake in most of the sectors, be it manufacturing, telecom,
software, services sector, trading, export-import, etc.
Our services broadly covers following areas in Foreign Investment
Services to our clients:
- Entry Options for Foreign Investors
- Routes for Foreign investment
- NRI /PIO/Overseas Corporate Bodies
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India after liberalization has not only
opened it's doors to foreign investors but also made investing in India
easier for them.
- Foreign exchange controls have been made easier on the account of
trade.
- Companies now can raise funds from overseas securities markets
and can enjoy considerable freedom to invest abroad for expanding
their global operations.
- Foreign investors can remit earnings from their Indian
operations.
- Foreign trade is by large free from regulations, and tariff
levels have come down steeply in the last couple of years.
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Entry Options for Foreign Investors
A foreign company that is planning to set up business operations in India
has the following few options:
- Branch Office
- Liaison / Representative Office
- Project Office
- By Forming a Company in India
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Branch Office :
Government of India has allowed foreign companies that are engaged in
manufacturing and trading activities abroad to set up Branch Offices in
India for the following purposes:
- To represent its parent company/ other foreign companies in
various matters in India such as acting as buying/selling agents
over here.
- To conduct research work in those areas where the parent company
is engaged.
- To undertake export and import trading activities
- To promote all possible technical and financial collaborations
between the Indian and overseas companies.
- Rendering professional or consultancy services.
- Rendering services in IT and development of software the country.
- Rendering all sort of technical supports to the products
supplied by the parent/ Group companies.
- Foreign airlines or shipping companies.
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Liaison Office :
To enter the Indian market, the foreign companies set up a Liaison/
Representative office in India. This office is not allowed to undertake any
business activity in the country or earn any income. In fact the role of
Liaison/ Representative office is limited to collecting information about
the market opportunities and about the prospects of its company's products.
Any person residing outside India is permitted by the Reserve Bank of India
(RBI) to establish a Liaison office in the country and may carry out the
following activities:
- May represent in India the parent company or group companies.
- May conduct research work in those areas in which the parent
company or the group companies are engaged.
- May promote export and/or from/ to India.
- May promote technical or financial collaborations between the
parent or group companies in the country.
- May act as a communication channel between the parent company and
the Indian companies.
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Such offices are permitted only for 3
years initially but it may be extended from time to time.
Project Office :
Those foreign companies that are planning to execute specific projects in
India are permitted by RBI to set up temporary project/ site offices in the
country. Such approval is generally accorded in respect of approved by
appropriate authorities or whether the project is financed by the Indian
bank/ Financial Institution or else from a multilateral/ bilateral
international financial institution.
Site Office :
By site office it means a sub-office of the project office that is
established at the site where the project is being implemented. It does not
include a Liaison office.
No person resident outside India shall, without prior approval of the
Reserve Bank, establish in India a branch or a Liaison office or a project
office or any other place of business by whatever name called.
By Incorporating a Company in India through
- Joint Venture (JV), or
- A Wholly Owned Subsidiary
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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 Foreign Direct Investment (FDI)
policy.
Routes for Foreign investment
a. Automatic Route
100% Foreign Direct Investment (FDI) is allowed under the automatic route
in all the activities/ sectors without the approval of the Government of
India (GoI), except the following :
- Those activities or items that requires an Industrial License.
- A proposal in which the foreign collaborator is already having a
venture or tie-up in the country in the same field.
- In some cases, a proposal for acquisition of shares in an
existing Indian company.
- All those proposals that are not in notified sectoral policy/
caps or under sectors where the FDI is not permitted.
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b. Government Approval Route
All the activities that are does not come under the automatic route
requires prior Government approval. The areas/ sectors/ activities hitherto
not open to FDI/ NRI investment shall continue to be so unless it is
otherwise notified by the Government of India (GoI).
Benefits to NRI /PIO/Overseas Corporate Bodies
Non-resident Indians/ persons of Indian origin/ overseas corporate bodies
are also encouraged by the Government to invest in India. The incentives
offered to these mentioned includes the following:
Repatriation of the capital and also income accruing thereon up to 100%.
The RBI grants an automative approval for such investments.
The NRIs are permitted to invest in both categories of Mutual Funds,
floated by public or private financial institutions, with repatriation
facility.
One more area of attraction for the NRIs are portfolio investment scheme.
- The lock-in period or one-year for the NRIs for repatriation of
disinvestment is now removed.
- Companies, of any sector of operation, are permitted to make
reservation to NRIs in public issues, but under the guidelines of
SEBI.
- All the investments that are approved by the GoI are insured
against the expropriation/ nationalization by the Multilateral
Investment guarantee Agency (MIGA).
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