Branch Office Setup

Businesses grow and the need to expand increases along with growth in business. The rules and regulations for foreign investments in India as well as investments by Indian companies and individual overseas has been liberalized over the past few years. This has created ample opportunities for Indian businesses to go international and for foreign companies to take advantage of the growing Indian markets. Both Indian and foreign entities can avail of our services detailed below:-

Setting up overseas branches for Indian companies & individuals:-
The Indian economy is growing and expanding beyond its borders. Businesses in India need to establish presence in many parts of the world. We assist Indian businesses in establishing presence in other countries. Foreign branches can be established in the following ways by Indians depending on the investment criteria permitted by the Government of India as well as the rules in the foreign country where presence needs to be established:-

• Appoint agents: This is the simplest and quickest way to establish overseas presence for Indian businesses. Exclusive dependent agents or a consignment agents can be appointed to secure orders and transact business on behalf of the Indian entity in specified territories. Formal arrangements can also be made with independent agents to introduce new customers and / or secure orders. We assist Indian entities to identify agents to represent them and formalize arrangements keeping in view the Laws in India and the foreign countries for appointing such agents. The advantages of this kind of arrangement is that investments may be low and expenses are normally based on fixed or variable percentage of value of sales. Sometimes fixed predetermined amounts may also be payable for managerial and technical services provided by the agent. The limitations are that even though business may be continuous and worthwhile for the agents, it may be very expensive if volumes are large or a presence is required to control a large network of agents in a specific area. In such cases Indian businesses can setup a branch office or a new entity abroad as detailed below.

• Setup a branch office abroad: In this mode of establishing overseas presence, the Indian business entity will have to make investment abroad in offices or warehouses (either on ownership or lease), place stocks for trade and incur recurring business expenses for staff and administrative setup. A responsible person to act on behalf of the branch office should be present locally to comply with the laws of the foreign country. We assist Indian businesses that are permitted to make such investments to identify suitable locations for setting up offices and warehouses, appoint staff and local managers to run the business and comply with the laws. Permissions have to be obtained from the Indian government in case foreign exchange outgo exceed limits that banks are allowed to remit during normal course of business. Permissions may also be needed in the country of investment. Tax laws and other laws in both countries will have to be complied with. In case an Indian person is required to run the show, a long term resident visa will have to be obtained from the consulate of the country. The person applying for the visa will have to qualify, apply for and obtain the visa himself from the consulate. Our scope of work is to setup the business and arrange for it to be run. We do not influence clients for making decisions on maters of strategic importance. We offer suitable suggestions for clients to make a final decision.

• Establish a Limited Liability Partnership (LLP) or a Company: Depending on the laws in force in the foreign country, setting up a new entity in a foreign country could be very advantageous even though cumbersome. The foreign entity could be a fully owned subsidiary of the Indian entity or in partnership with other foreign individuals or companies. The biggest advantage of such a setup is that it is usually treated at par with other companies in that country and it can make full use of facilities and benefits given to other companies in that country to invest in industries in specific regions promoted by the foreign governments. We assist Indian companies in arranging registration and incorporation of an appropriate form of entity suitable to their business needs and also coordinate with local professionals to comply with company and other trade laws in the area of incorporation. Indian companies should preferably incorporate a new company according to their needs or take over an existing entity in the same business to gain advantage of the goodwill acquired from previous owners. Permutations and combinations are many that it is not possible to list them on this page. To know more about how we could be useful, do contact us using the options available on our Contact page.

Before you make the decision to establish overseas presence, please ascertain from your bank the current remittance limits in force and your eligibility to avail these limits without prior approval from governing authorities. In case prior approval is needed for your investments abroad, you have to apply for the approvals from the concerned authorities through your bank who will assist you if you are eligible. We do not assist individuals for obtaining investment visas if required from foreign consulates. Applicants must qualify and apply directly to the concerned consulate.

Establishing Indian presence for international companies:-
Liberalization of the Indian Economy has attracted many international companies to establish their business presence in India. We assist international companies in establishing presence in India in the following ways:-

• Liaison office: Foreign companies are allowed to establish liaison offices in India through resident Indians. Such offices are not permitted to enter into contracts and transactions in India. All contracts whether for import or export has to be entered into by the company through its offices abroad. However, tax laws will have to be complied with for income deemed to arise in India due to presence of the local liaison office. This is not applicable if the liaison office is setup for buying products from India.

• Agents: Details of how we work as independent agents is available on our Buying, selling , indenting service page. If desired by the foreign entity, we can also act as dependent or consignment agents of the foreign entity. However, the foreign entity will have to comply with local tax laws for income earned in India as this arrangement is treated as a permanent establishment in India under provisions of Double Taxation Avoidance Treaties entered into by India with many foreign governments. This is not applicable if arrangements are exclusively for purchase of goods from India.

• Branch Offices: Foreign entities can set up branch offices in India for buying, selling and trading in India. Such branch offices are treated as foreign companies for the purpose of taxes in India and need to comply with tax laws of India for income arising in India as well as the regional state laws wherever they choose to locate their offices. Laws of the home country will also have to be complied with. We assist foreign entities in choosing the suitable location for setting up their branch offices, obtaining clearances required and complying with laws in India by coordinating with professionals and experts in the field on behalf of foreign entities. Foreign companies cannot engage in any manufacturing activities or retail trading through their branch offices in India.

• Incorporating an Indian Company: In case the volume of business to be transacted is very large or the foreign companies wish to setup a manufacturing base in India, it may be advantageous to set up an Indian company with up to 100% investment if permitted by the Foreign Investment Promotion Board of Government of India or investments up to limits (sectoral caps) prescribed for specific industries. Currently there are certain restrictions on foreign investments in the retail trade sector. Foreign investments in industries of strategic importance for defense and sovereignty of India are usually not permitted. Foreign investment of over 24% in small scale industries or industries reserved for the small scale sector are permitted with export obligations. We assist foreign companies and individuals in incorporating an Indian entity by coordinating services of experts and professionals in various fields and territories to apply for approvals and licenses and setup the venture. We also arrange for professionals to comply with the local laws on behalf of the foreign companies, choosing the right location for establishing the offices and manufacturing facilities and also the managers and staff to run the business.

Before setting up a venture in India, foreign companies should ascertain that the activity they wish to carry out in India is permitted by the Government of India. We can assist foreign companies in obtaining information after we get details of activity to be carried out in India. In case foreigners are required to obtain visas from the Indian consulates for making any investments in India, they will have to qualify and approach the Indian consulates in their country to apply for and obtain the visa. Criteria may vary from country to country. It is better to check with the Indian consulate nearest to your place of residence.