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BikeLover1x   25 December 2015

Asking for legal procedure to open an office in india

We are going to open an office in India. Before doing that we need important information  from you guys. We are based in LA, and want to open a branch office in India (most probably in Bangalore). What is the legal procedure for the foreigners to:-

 

  • >> Coming in India and open an office
  • >> From which government departments, I have to take the NOC and clearance.
  • >> Legal Contract with employees(I have to hire about 30 people)

 

Please tell the method, which is less hustled Any help appreciated.!!

 

Jone Ramnarase - Branch Office Head iguestblog Los angeles

Address: 92 West Street, Near Johnson Avenue, 90017, Los Angeles

Phone#: 326-756-4857

Email: joneramnarase@iguest.com

 

 



Learning

 5 Replies

SAINATH DEVALLA (LEGAL CONSULTANT)     25 December 2015

A chartered Account can advice and suggest U better,hence contact a CA.

G.L.N. Prasad (Retired employee.)     25 December 2015

Now most of the states it made on line and even single door permissions.  If you have a printed balance sheet, rating at stock market, and brief profiled with awards collect all the information, and write a formal letter to Department of Industries in Karnataka.  Search in google with key words "opening of office/branch in India by a foreign company procedure in Karnataka" and you can find several consultants, who can undertake the job.  But before deciding a place select a state that gives concessions, minimum formalities, logistics etc., as many states have different schemes for encouraging foreign investment.  If you have any Indian employed in your company, and if he is from Karnataka, entrust this task to him giving a limited POA for signing on behalf of the company for establishment permissions.  You can also look in  link in website study a competent professional that can help you at selected place.

SIVARAMAPRASAD KAPPAGANTU (Retired Manager)     25 December 2015

Please note that any Foreigner and/or Company incorporated outside India, needs specific prior permission from RBI for opening an Office in India. Companies incorporated outside India and engaged in manufacturing or trading activities are allowed to set up Branch Offices in India with specific approval of the Reserve Bank. Such Branch Offices are permitted to represent the parent / group companies and undertake the following activities in India: 1Export / Import of goods. Rendering professional or consultancy services. Carrying out research work, in areas in which the parent company is engaged. Promoting technical or financial collaborations between Indian companies and parent or overseas group company. 1) Representing the parent company in India and acting as buying / selling agent in India. 2) Rendering services in information technology and development of software in India. 3) Rendering technical support to the products supplied by parent/group companies. 4)Foreign airline / shipping company. For further particulars, please read the Master Circular on Establishment of Liaison / Branch /Project Offices in India by Foreign Entities. You may use the following link to read the circular https://www.rbi.org.in/scripttts/BS_ViewMasCirculardetails.aspx?id=9050 I suggest appointing a Consultant for the purpose of handling all the formalities.

K.S.Srinivas (Advisor (HR))     30 December 2015

Procedure to be followed by the foreign companies for opening their branch office in India:-

A. Foreign companies/entities desirous of setting up of Liaison Office / Branch Office (LO/BO) are required to submit their application in Form FNC along with the documents mentioned therein to the General Manager, Foreign Exchange Department, Central Office Cell, Reserve Bank of India, New Delhi Regional Office, 6, Parliament Street, New Delhi-110 001, India through an Authorised Dealer bank. This form is available at www.rbi.org.in

B. The applications from such entities in Form FNC will be considered by the Reserve Bank under two routes:

• Reserve Bank Route - Where principal business of the foreign entity falls under sectors where 100 per cent Foreign Direct Investment (FDI) is permissible under the automatic route.

• Government Route - Where principal business of the foreign entity falls under the sectors where 100 per cent FDI is not permissible under the automatic route. Applications from entities falling under this category and those from Non - Government Organisations / Non - Profit Organisations / Government Bodies / Departments are considered by the Reserve Bank in consultation with the Ministry of Finance, Government of India.

C. The following additional criteria are also considered by the Reserve Bank while sanctioning Liaison/Branch Offices of foreign entities:

• Track Record

  • For Branch Office — a profit making track record during the immediately preceding five financial years in the home country.
  • For Liaison Office — a profit making track record during the immediately preceding three financial years in the home country.

• Net Worth [total of paid-up capital and free reserves, less intangible assets as per the latest Audited Balance Sheet or Account Statement certified by a Certified Public Accountant or any Registered Accounts Practitioner by whatever name].

  • For Branch Office — not less than USD 100,000 or its equivalent.
  • For Liaison Office — not less than USD 50,000 or its equivalent

D. Permission to set up Liaison offices is initially granted for a period of 3 years and this may be extended from time to time by the Authorised Dealer in whose jurisdiction the office is set up. The Branch / Liaison offices established with the Reserve Bank's approval will be allotted a Unique Identification Number (UIN) (www.rbi.org.in/scriptts/Fema.aspx). The BOs / LOs shall also obtain Permanent Account Number (PAN) from the Income Tax Authorities on setting up the offices in India.

E. Liaison/Branch offices have to file an Annual Activity Certificate (AACs) from the Auditors, as at end of March 31, along with the audited Balance Sheet on or before September 30 of that year, stating that the Liaison Office has undertaken only those activities permitted by Reserve Bank of India. In case the annual accounts of the LO/ BO are finalized with reference to a date other than March 31, the AAC along with the audited Balance Sheet may be submitted within six months from the due date of the Balance Sheet.

LOs/BOs are required to furnish copy of the Annual Activity Certificate (AAC) to Director General of Income Tax (International Taxation), Drum Shaped Building, I.P. Estate, New Delhi 110002.Copies of the AACs submitted to the DGIT (International Taxation) should be accompanied by audited financial statements including receipt and payment account.

Further, at the time of renewal of permission of LOs by AD banks, they may note to endorse a copy of each such renewal to the office of the DGIT (international Taxation).

 

T. Kalaiselvan, Advocate (Advocate)     03 January 2016

I agree to the views of Mr. Srinvas.  You may take the help of a consultant in this regard proceed  complying with the proper procedures as laid down.


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