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Foreign company investment in india

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(Querist)
31 May 2012 Hi,
Foreign company (non-resident)wants to open a office in india with foreign ownership.

Being a resident in india can i register a new company as a indian company and later pass all shares to non resident foreign company. Will this work as wholly owned subsidary company to them. What are the complications in this. Basically indian subsidiary company will be selling stationery products to the parent company in UK.
Regards,
Amit
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Vishal D Shah

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Vishal D Shah (Expert)
31 May 2012 Amit,
you can form Indian company and then sell shares to foreigner. Take care that the sector in which foreigner wants to invest is permitted under FEMA.

Selling products to foreign company is ok but whether it will be trading or manufacturing needs to be seen.

Also transfer pricing shall be applicable which needs to be taken care of.

Regards,
cavishalshah@gmail.com
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