Setting Up Business in India

Due to economic liberalization, starting and setting up and doing business in India is no more hassle. Owing to ongoing computerizations at Government level, incorporation, formation, registration of a company, in India, has become an easy process. Owing to changing regulatory environment, there are various efficient vehicles available for entry and exit strategy.

A foreign company planning to set up business operations in India has the following TWO options:


(A) As an Indian Company: A foreign company can commence operations in India by incorporating a company under the Companies Act, 1956 through:

  1. Joint Ventures;

  2. Wholly Owned Subsidiaries; or

  3. Limited Liability Partnership

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. 

(B) As a Foreign Company: Foreign Companies can set up their operations in India through:

  1. Liaison Office/Representative Office:
  2. Liaison office acts as a channel of communication between the principal place of business or head office and entities in India. Liaison office cannot undertake any commercial activity directly or indirectly and cannot, therefore, earn any income in India. Its role is limited to collecting information about possible market opportunities and providing information about the company and its products to prospective Indian customers.

  3. Project Office:
  4. Foreign Companies planning to execute specific projects in India can set up temporary project/site offices in India. Such offices cannot undertake or carry on any activity other than the activity relating and incidental to execution of the project.

  5. Branch Office
  6. Foreign companies engaged in manufacturing and trading activities abroad are allowed to set up Branch Offices in India. A branch office is not allowed to carry out manufacturing activities on its own but is permitted to subcontract these to an Indian manufacturer.

Role of NJP:

  • Advise on Entry Strategy and structuring of Business set up in India
  • Identification and selection of the place of business
  • Incorporation of the Company or Branch or Liaison Office in India
  • Bank account opening and getting Finance
  • Getting approvals at various regulatory bodies/agencies
  • Ongoing compliance with all laws and regulations
  • Accounts and Payroll maintenance
  • Compliance with FEMA/RBI for fund transfers