LEX Nexus attends to foreign companies for entry strategies in India and assisting them through Government regulations and procedures for setting up their operations in India, advising on foreign exchange management act (FEMA) and its regulations, foreign direct investment (FDI) FDI approvals from foreign investment promotion board (FIPB) FIPB/Secretariat of Industrial Approvals (SIA); branch, liason, subsidiary, project & site office approvals from reserve bank of india; Industrial licensing, Government contracts, transfer of technology and licensing, repatriation. The firm also advice on various provisions & procedures relating to imports and exports.

The Government of India permits 100% FDI on an automatic basis, except with respect to a small negative list. In certain specific sectors, investment caps for FDI have been prescribed. In those cases which are covered by automatic approval route, only the Reserve Bank of India is required to be intimated within a specified period of time from the date of issue of shares to foreign shareholders. Proposals for foreign investment, which are not covered under the automatic approval route, are considered for approval, by the Government of India.

Our range of services includes : 

Advising on methods & strategies to be adopted in those sectors where investment caps have been prescribed to protect the interests of foreign enterprise

Structuring the investment in India in the most tax efficient manner after considering benefits available under domestic tax laws and also the benefits under various Tax treaties in order to ensure tax minimization on a global basis 

Obtainment of clearance from the Foreign Investment Promotion Board and Reserve Bank of India, where necessary

Advising on the various compliance procedures under relevant laws, rules and regulations including industry specific legal issues 

SUBSIDIARY COMPANY
A Foreign corporation can set up its subsidiary company either in the form of a private limited company or as a public limited company in India. A subsidiary of a public corporation is also treated as a public company. The subsidiary companies can either be wholly owned subsidiaries of the foreign companies or it can be a joint venture with Indian partners. Except in a few sectors where foreign direct investment cap is applicable, the foreign company can hold 100% of the equity of the subsidiary company. In those sectors where foreign direct investment cap is applicable, total foreign equity holding shall be restricted to such levels. 

A company in India is required to be incorporated under The Companies Act, 1956 and is also required to comply with various regulations/ procedures laid down under the Companies Act, 1956. In comparison with the branch office and liaison office, a subsidiary company provides maximum flexibility for conducting business in India and it can also undertake manufacturing activities in India. The Indian operations of the company can be funded either through equity or debt (both foreign and local) or through internal accruals. 

The subsidiary company, incorporated under the laws of India, is treated as a domestic company for tax purposes and accordingly domestic company tax rates and benefits will apply. However, Indian transfer pricing regulations shall be applicable to such companies. No approval is required for the repatriation of dividends. 

Our range of services for establishing a subsidiary company includes : 

Advising on / formulating the entry strategy for India 

Structuring the investment in India in the most tax efficient manner after considering benefits available under domestic tax laws and also the benefits under various Tax treaties in order to ensure tax minimization on a global basis 

Advising on the possible locations for setting up manufacturing operations to obtain maximum tax benefits after taking into account infrastructural and other specific special requirements

Guidance in respect of various laws, rules and regulations that will have a bearing on setting up of operations in India 

Obtainment of clearance from the Foreign Investment Promotion Board and Reserve Bank of India, where necessary

Obtainment of Registrations for obtainment of certain tax benefits

Total guidance & assistance in the incorporation of the company including approval for name of the company, drafting of Charter Documents (Memorandum of Association and Article of Association), filing of documents required for incorporation and obtainment of Registration from the Registrar of Companies 

Advising on the various compliance procedures under relevant laws, rules and regulations including industry specific legal issues


PROJECT OFFICE
A foreign corporation, which has secured a contract from an Indian company to execute a project in India, is allowed to establish a project office in India without obtaining prior permission from RBI. Such offices can not undertake or carry on any activity other than the activity relating and incidental to execution of the project. The exchange control regulations prescribe certain additional requirements for setting up project office sans its approval.

The foreign corporation which sets up such a project office is required to furnish a prescribed report to the concerned regional office of RBI under whose jurisdiction the project office is set up. The project office is treated as an extension of the foreign corporation in India and is taxed at the rate applicable to foreign corporations.

Our range of services includes :

Advising on/formulating the entry strategy for India 

Structuring the investment in India in the most tax efficient manner after considering benefits available under domestic tax laws and also the benefits under various Tax treaties in order to ensure tax minimization on a global basis 

Guidance in respect of various laws, rules and regulations that will have a bearing on setting up of operations in India 

Obtainment of clearance from the Reserve Bank of India, where necessary

Advising on the various compliance procedures under relevant laws, rules and regulations including industry specific legal issues


LIASION OFFICE/ REPRESENTATIVE OFFICE
Foreign corporations/entities are permitted to open liaison offices/representative offices in India (subject to obtaining specific approval from RBI) for undertaking liaison activities on their behalf. Liaison office cannot directly or indirectly undertake any trading, commercial or manufacturing activity and therefore, cannot earn any income in India. Its role is limited to representing the parent company/group companies in India, promoting export/import from/to India, promoting collaborations between parent company and companies in India and collecting information about possible market opportunities and providing information about the company and its products to prospective Indian customers.

No fees, commission or remuneration can be charged by the Indian liaison office and all expenses of the liaison office should be met entirely by remittances from abroad through normal banking channels. The setting up of a liaison office in India is subject to such conditions as may be stipulated in the permission granted by RBI. The liaison office is required to be registered with the registrar of companies. The liaison office is required to submit an auditors' certificate annually to RBI.

Our range of services includes :

Advising on/formulating the entry strategy for India 

Obtainment of approval from the Reserve Bank of India

Advising on the various compliance procedures under relevant laws, rules and regulations including industry specific legal issues

Acting as representative office of a foreign entity to in India to promote its business development and interests in India 


BRANCH OFFICE
Foreign corporations/entities engaged in manufacturing and trading activities abroad are allowed to set up branch offices in India. The branch office can carry the same, or substantially the same, activities as the ones carried on by the foreign corporation overseas except that it cannot carry manufacturing activity on its own (sub-contracting is permitted). It can also stock & sell products in India and is permitted to acquire immovable property necessary or incidental to carrying on activities permitted by RBI. For opening a branch office in India, foreign corporations require a specific approval from the Reserve Bank of India (RBI). Such approval prescribes the activities that a branch office may undertake in India. Consequently, a foreign corporation cannot undertake any activity in India that is not specifically permitted by RBI.

A branch office is required to register itself with the Registrar of Companies and is required to comply with certain procedural formalities prescribed under the Companies Act, 1956. For income tax purposes, a branch office is treated as an extension of the foreign corporation in India and taxed at the rate applicable to foreign companies. Further, transactions between a branch and the foreign corporation are subject to Indian transfer pricing regulations. 

As per exchange control regulations, the branch can meet its expenses out of the revenues generated in India and its post-tax profits in India are freely repatriable to the foreign corporation. Further surplus funds, on winding up of the branch office, can be repatriated to the foreign corporation subject to RBI approval.

Our range of services includes :

Advising on / formulating the entry strategy for India 

Obtainment of approval from the Reserve Bank of India

Obtainment of Registrations with regulatory authorities

Total guidance & assistance in the incorporation of the company including approval for name of the company, drafting of Charter Documents (Memorandum of Association and Article of Association), filing of documents required for incorporation and obtainment of Registration from the Registrar of Companies 

Advising on the various compliance procedures under relevant laws, rules and regulations



FOREIGN PORTFOLIO INVESTMENT IN INDIA 
Foreign Institutional Investors (FIIs) can make portfolio investments. FIIs are allowed to invest in the primary and secondary capital markets in India under the Portfolio Investment Scheme (PIS). The term FII is defined as an institution established or incorporated outside India for making investment in Indian securities and also includes a sub-account of an FII. FIIs must register themselves with the Securities and Exchange Board of India (SEBI) and comply with the exchange control regulations of RBI. Foreign pension funds, mutual funds, investment trusts, asset management companies, nominee companies and incorporated/institutional portfolio managers or their power of attorney holders are allowed to invest in India as FIIs. They may invest in securities traded in both the primary and secondary markets. These securities include shares, debentures, warrants, and units of mutual funds, government securities and derivative instruments. Various investment limits have been prescribed under RBI Regulations for FII investment in various instruments. Minimum investment limit in equity and equity related instruments has been prescribed in respect of FIIs registered as non-debt funds.

Our range of services includes:

Structuring the investment in India in the most tax efficient manner after considering benefits available under domestic tax laws and also the benefits under various Tax treaties in order to ensure tax minimization on a global basis

Obtaining registration from Securities & Exchange Board of India 

Obtainment of clearance from the Reserve Bank of India, where necessary

Advising on hedging strategy in respect of foreign exchange exposure

Advising on the various compliance procedures under relevant laws, rules and regulations .