Applicability of provisions of companies act

To set up business operations in India, a foreign company has following options:

1. As an Indian Company (‘IC’) i.e. as incorporated entity under the Companies Act 1956.

2. As a Foreign Company (‘FC’) i.e. as an unincorporated entity

1. As an Indian Company (‘IC’) i.e. as incorporated entity under the Companies Act 1956.

(a) Through Joint Venture (JV) with some Indian partner

(b) Wholly Owned Subsidiary (WOS)

A foreign company planning to form a subsidiary in India, in addition to meeting all requirements of forming a company, is required to seek governmental approval before investing in India. Some approvals are automatic, -RBI Approvals - though application is required for those approvals. Special Permission - FIPB Approvals - could be obtained to invest over and above the regular percentage allowed.

2. As a Foreign Company (‘FC’) i.e. as an unincorporated entity

A foreign company can also set up an office in India as a foreign company (without incorporating a company in India) under following formats:

(a) Through Liaison office (i.e. Representative office) or

(b) Branch office or