Foreign Direct Investment (FDI) in India

It is noteworthy investment by the owner of foreigners in Indian company’s generally foreign direct investment (FDI). The subject of foreign direct investment in India by foreign direct investment policy announced by the Government and the provisions of the Foreign Exchange Management Act (FEMA) 1999.

While formulating FDI policies fall under the scope of the central government. Federal Regulations describes the development of investment, i.e. the way the receipt of funds, issuance of shares / convertible bonds, preferred stock, and investment reports to the Reserve Bank of India (RBI).

A foreign company is planning to establish operations in India have the following options:

Limited company

Entity registered companies anywhere in the world, with the exception of a few countries, can invest in India by registering as a limited company. Co, Ltd. can be registered in India as a 100% subsidiary or joint venture with other investors, including Indian investors.

FDI up to 100% in shares of limited companies freely allowed under the automatic route, subject to sectoral caps as set forth in the Consolidated FDI from India’s policy.

FDI in sectors / activities to the extent permitted under the automatic path does not require any prior approval from the government or the Reserve Bank of India. FDI in activities not covered by the automatic route or beyond the sectoral cap as stipulated in the framework of foreign direct investment policy requires the prior approval of the FIPB.

Limited Liability Partnership (LLP)

Limited Liability Partnership (LLP) is a legal person with all the features of a limited liability company. This is a new business organization in India with all the features of the company in the United States, LLP in the United Kingdom. This is the ideal organization to work compared with the company. Full law governing LLPs in India in partnership law limited liability 2008.

LLP and combines the advantages of per-’Company “and” Partnership’ into a single business entity. In LLP, a partner is not responsible or liable for another partner misconduct or negligence. Instead, all partners limited liability, limited to acts that they do commission or omission, similar to the obligations of the shareholders in a limited company.

Foreign direct investment allowed in LLPs operating in the commercial activities of 100% foreign direct investment is permitted through automatic path with the approval of the Foreign Investment Promotion Board (FIPB). It will not allow FDI in LLPs in sectors such as agriculture activity Farm / print media or commercial real estate.

A branch office

Can business entities registered outside India (foreign company) establish commercial operations in India without the establishment and registration of a subsidiary company? Taking into account the guidelines RBI, can a foreign company to open a branch office in India. The scope of the operations of these offices is usually limited to the activities and tasks such as country representative office, sourcing, technical and / or marketing, import and export support, etc. branch office can carry out commercial activities of the parent company is subject to the approval of the Reserve Bank.

Liaison Office

A foreign company can open a liaison office (LO) in India subject to the Reserve Bank of India (RBI) guidelines. The limited scope of operations of the Liaison Office to represent the parent company in India, and to promote export / import from / to India and technical cooperation / financial, and serve as a channel of communication between the parent company and the Indian customers. Angeles is not allowed to do any business activity in India and cannot earn any income in India.