Foreign Companies in India

Foreign companies:

We provide following legal and secretarial services to foreign companies, i.e. companies incorporated outside India for doing business in India.

• Consultation / Advisory services for doing business in India, including registration requirements, general laws applicable, applicability of tax legislation and related party transactions. Read more.
• Provide front office / assist in obtaining office premise. To know the foreign exchange regulations in India for transactions in immovable property, click here.
• Assist in determining investment route / entry strategy in India like opening branch office, liaison office and project office (including obtaining necessary regulatory approvals and submission of periodic reports to authorities). Read more.
• Registration under the Indian Companies Act (For company formation in India click here) and Limited Liability Partnership Act
• Registration of Trade Marks (Read more), Service Marks, Copyrights and related services like licensing agreements
• Closure of liaison office

Click here to know obligations of foreign companies under the Indian Companies Act.

Limited Liability Partnerships:

We intend to provide services to non-resident limited liability partnerships (LLP), i.e. those incorporated outside India.

In India, the law of LLP is very new. In fact, the Limited Liability Partnership Bill, 2008 is approved by the Indian Parliament on 12 December 2008 and received assent of the President of India on 7th January 2009. It has been notified under the official gazette of India on 9th January 2009 as the Limited Liability Partnership Act 2008 ((6 of 2009). The law has become operational with effect from 31st March 2009. Some of the features of the said Indian law, relevant to non-Indian LLPs, are:

• The said law provides for establishment of business in India by a foreign LLP. It requires foreign LLP to register itself in India, within 30 days of establishing place of business in India.
• Indian LLP shall have at least two partners. Even foreign LLP can be a partner.
• At least one of the partners shall be resident in India.
• A foreign LLP can apply to reserve its name for a period of three years and it can be renewed further. This can be beneficial where a foreign LLP intends to enter India within three years. Necessary policy and procedural parameters will be notified by the Central Government and the Reserve Bank of India.

To read features of Indian LLP (including income tax treatment), click here.

Investment in India and remittance from India:

Entry in and out of India is made investor friendly and comparable with other developed countries. Some of the examples are-

Royalty and lump sum for technology transfer

Indian companies are permitted to make payment by way of lump sum and royalty for transfer of technology by foreign entity. In such cases, lump sum amount shall not exceed US$ 2 million without prior government approval. And royalty payment shall not exceed 5% for domestic sales and 8% for exports from India without prior government approval. Royalty payment can be for any number of years. Limits of US$ 2 mn and 5% / 8% royalty payment are withdrawn vide Press Note 8 (2009 series) dated 16th December 2009 and vide A.P. (DIR Series) Circular no.52 dated May 13, 2010. Necessary amendment to FEM (Current Account Transactions) Rules 2000 notified by the Government of India vide notification no.G.S.R. 382(E) dated May 5, 2010.

Royalty for Trade Marks and Brand Names

Indian companies are permitted to make payment of royalty upto 2% for exports from India and 1% for domestic sales for use of trade marks and brand names, where there is no technology transfer. The limits of 2% and 1% are withdrawn vide Press Note 8 (2009 series) dated 16th December 2009.

To know routes for Investment in India, click here.

To know on applicable laws and doing business in India, click here.

For any questions / discussion on the matter, you may leave your comments or contact us.

About Trademark

(Author: Divya Poojari)