A business in India

SteveM · May 22nd, 2006, 01:41

Hi Indiamikers

Can a non-resident foreign national set up a business in India?

Do they have to have a resident Indian partner?

If a non-resident foreign national(UK) does the 182/3 day residency in India! Does this make a difference?

Cheers SteveM

Sama · May 22nd, 2006, 01:52

I'm interested in this answer also!

PeakXV · May 22nd, 2006, 02:14

In general I still think you have to tie-up with an Indian parter in a 51%-49% type arrangement. There are some experts in this area on IM so somebody should be along shortly .......

palmlandtours.net · May 22nd, 2006, 02:19

http://dipp.nic.in/invindia/invind.htm

This could be helpfull. I am not sure.

aask · May 22nd, 2006, 03:10

Hi Steve,
The Answer is yes and no.
Depnds what you want to do.
A host of industries are now open for foreign nationals to be 100% share holders in business venture.

If you are into tourism almost all businesses are open in this sector.
So is Food processing, Hi tech, Construction etc.

Check out the NIC network. This is an intranet linkng all govt databases that are open for public.
http://goidirectory.nic.in/ is the mother site.
You can navigate from here to all info available in the public domain.
Do check out DGFT(Director general of Foreign Trade), Ministry of Commerce, and MO Finance.

I have a few friends from Europe who own 100% stake in businesses(Resorts) they invested in India. All of them had to form and register the business as a "Private Limited Company" which in turn got approved by the RBI(Reserve Bank of India) to start the operations. A chartered accountant(CPA) and a Lawyer seems to be the starting point.

Good luck

aask · May 22nd, 2006, 03:36

Hi Steve/Yogagal..
This page has all relevent information you may need. http://www.indialiaison.com/fdi.htm
Very good read indeed.
Enjoy

rohan5577 · May 22nd, 2006, 12:18

According to my limited knowledge, a lot depends on the size of the business and its model. Unfortunately bureaucracy is still deeply manifested in the Indian system. But on the other hand, if one knows how to manage the system, almost anything is possible.

The best way to start a business here is to have a local point of contact or partner who at least has some amount of tangible stake in the venture and is willing to see it though in an honest and professional manner. Some freinds of mine used this method in the past to have a perfectly legal yet disguised foreign ownership of a business.

So if its a comparitively small project but with a reasonable growth perspective, one might want to explore the above mentioned route. On the other hand, if there are larger stakes and greater risks, then going through the bureaucratic maze works best.

Rohan

SteveM · May 22nd, 2006, 21:43

Thanks Aask and to everyone that contributed.

There is a wealth of information

Cheers
SteveM

JesKaliebe · May 23rd, 2006, 00:01

You can set up a Private Limited company, which can be 100% owned by yourself, or if you have a company in UK, it can be owned by that.

As already mentioned, it will have to be approved by RBI before you can officially start operations.
I suggest that you talk to an internationally established corporate tax/law advice company - I can strongly recommend Ernst & Young.

If you already operate a business in UK, you also have the option of setting up a branch or a liaison office in India, which will not be an independent company, but will be a part of your company in UK.

A liaison office is a cost center setup, which means you can hire and invest in India, but you will still have to invoice everything from your UK company, and will as such still face withholding tax issues.

A branch office will enable you to invoice from India, however the tax rules are a little more in disadvantage compared to setting up a subsidiary/wholly owned company (pvt. ltd.).

Anyway - it is an _extremely_ complicated area, so you will need to talk to get advice from professionals.

May 22nd, 2006, 01:41	#1
SteveM Senior Member Join Date: Oct 2004 Location: UK Posts: 122	A business in India Hi Indiamikers Can a non-resident foreign national set up a business in India? Do they have to have a resident Indian partner? If a non-resident foreign national(UK) does the 182/3 day residency in India! Does this make a difference? Cheers SteveM __________________ Life is what happens to you while you are making other plans.

May 22nd, 2006, 01:52	#2
Sama a pain in the asana Join Date: Mar 2005 Location: the India inside my heart Posts: 5,453	I'm interested in this answer also! __________________ *My India, 2005-2008* BE THE REVOLUTION

May 22nd, 2006, 02:14	#3
PeakXV Naan.tering Nabob Join Date: Oct 2005 Location: Abode of Glooscap Posts: 4,374	In general I still think you have to tie-up with an Indian parter in a 51%-49% type arrangement. There are some experts in this area on IM so somebody should be along shortly ....... __________________ We shall not cease from exploration and at the end of all our exploring will be to arrive where we started ...and know the place for the first time. T.S. Eliot Don't go to India ~ Pre-trip Warnings & Misconceptions?

May 22nd, 2006, 03:10	#5
aask Member Join Date: Mar 2006 Location: Israel/India Posts: 42	Yes n No Hi Steve, The Answer is yes and no. Depnds what you want to do. A host of industries are now open for foreign nationals to be 100% share holders in business venture. If you are into tourism almost all businesses are open in this sector. So is Food processing, Hi tech, Construction etc. Check out the NIC network. This is an intranet linkng all govt databases that are open for public. http://goidirectory.nic.in/ is the mother site. You can navigate from here to all info available in the public domain. Do check out DGFT(Director general of Foreign Trade), Ministry of Commerce, and MO Finance. I have a few friends from Europe who own 100% stake in businesses(Resorts) they invested in India. All of them had to form and register the business as a "Private Limited Company" which in turn got approved by the RBI(Reserve Bank of India) to start the operations. A chartered accountant(CPA) and a Lawyer seems to be the starting point. Good luck

May 22nd, 2006, 03:36	#6
aask Member Join Date: Mar 2006 Location: Israel/India Posts: 42	Foreign Direct Investment Hi Steve/Yogagal.. This page has all relevent information you may need. http://www.indialiaison.com/fdi.htm Very good read indeed. Enjoy

May 22nd, 2006, 02:19	#4
palmlandtours.net Account Closed - Travel Agent Join Date: May 2005 Location: Trichur, Kerala, India Posts: 130	http://dipp.nic.in/invindia/invind.htm This could be helpfull. I am not sure.

May 22nd, 2006, 12:18	#7
rohan5577 Senior Member Join Date: Jun 2004 Location: Dubai--for now Posts: 240	According to my limited knowledge, a lot depends on the size of the business and its model. Unfortunately bureaucracy is still deeply manifested in the Indian system. But on the other hand, if one knows how to manage the system, almost anything is possible. The best way to start a business here is to have a local point of contact or partner who at least has some amount of tangible stake in the venture and is willing to see it though in an honest and professional manner. Some freinds of mine used this method in the past to have a perfectly legal yet disguised foreign ownership of a business. So if its a comparitively small project but with a reasonable growth perspective, one might want to explore the above mentioned route. On the other hand, if there are larger stakes and greater risks, then going through the bureaucratic maze works best. Rohan __________________ You can take a man out of India, but you can never take India out of a man!

May 22nd, 2006, 21:43	#8
SteveM Senior Member Join Date: Oct 2004 Location: UK Posts: 122	Thanks Aask and to everyone that contributed. There is a wealth of information Cheers SteveM

May 23rd, 2006, 00:01	#9
JesKaliebe Member Join Date: Jul 2005 Location: New Friends Colony Posts: 47	You can set up a Private Limited company, which can be 100% owned by yourself, or if you have a company in UK, it can be owned by that. As already mentioned, it will have to be approved by RBI before you can officially start operations. I suggest that you talk to an internationally established corporate tax/law advice company - I can strongly recommend Ernst & Young. If you already operate a business in UK, you also have the option of setting up a branch or a liaison office in India, which will not be an independent company, but will be a part of your company in UK. A liaison office is a cost center setup, which means you can hire and invest in India, but you will still have to invoice everything from your UK company, and will as such still face withholding tax issues. A branch office will enable you to invoice from India, however the tax rules are a little more in disadvantage compared to setting up a subsidiary/wholly owned company (pvt. ltd.). Anyway - it is an _extremely_ complicated area, so you will need to talk to get advice from professionals.

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