Either foreign co should opt for new company or branch for operation in india

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Ritu kumari (Querist)

14 February 2015 A foreign film company wants to a start operation in India. What will be beneficial step for him either to operate through opening new company or through branch? Its urgent plzz suggest me.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

14 February 2015 If it wants to start manufacturing activities it has to open new company. If it is only for marketing, consultancy, software, shipping and airline it can do it through branch office.

Foreign companies can also set up wholly owned subsidiary in sectors where 100% foreign direct investment is permitted under the FDI policy.

Foreign companies engaged in manufacturing and trading activities abroad are allowed to set up Branch Offices in India for the following purposes:
Export/Import of goods
Rendering professional or consultancy services
Carrying out research work, in which the parent company is engaged.
Promoting technical or financial collaborations between Indian companies and parent or overseas group company.
Representing the parent company in India and acting as buying/selling agents in India.
Rendering services in Information Technology and development of software in India.
Rendering technical support to the products supplied by the parent/ group companies.
Foreign airline/shipping company.
A branch office is not allowed to carry out manufacturing activities on its own but is permitted to subcontract these to an Indian manufacturer. Branch Offices established with the approval of RBI, may remit outside India profit of the branch, net of applicable Indian taxes and subject to RBI guidelines Permission for setting up branch offices is granted by the Reserve Bank of India (RBI).

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