Sectoral Caps for FDI India
A foreign company can start its business operations in India by incorporating a company under the Companies Act, 2013 through either a Joint Venture (JV) or forming a Wholly Owned Subsidiary (WOS). Foreign equity in such Indian companies can be up to 100%, subject to Sectoral equity caps under the FDI policy. The Sectoral caps as per the FDI policy are as follows:
FDI is prohibited in the following sectors
We J&P, as a team of professionals provide all sorts of assistance and consultancy in taking the approvals of the regulator, wherever required, in an efficient manner.
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Entry Strategies For Foreign Investors In India
Foreign Investment can be made in India through the following options:
AS AN INDIAN COMPANY
A foreign entity can start its business operations in India by incorporating a Indian company under the Companies Act, 2013 either through a Joint Venture (JV) or forming a Wholly Owned Subsidiary (WOS). Foreign equity in such Indian companies can be up to 100%, subject to sectoral equity caps under the FDI policy.
1. Joint Venture with an Indian partner:
Foreign companies can set up their operations in India by entering into strategic partnership with Indian entities and forming a Joint Venture (JV).
2. Wholly Owned Subsidiaries:
Foreign companies can also set up their operations in India by forming a Wholly Owned Subsidiary in sectors, where 100% foreign direct investment is permitted under the FDI policy. An application has to be filed with the registrar of Companies (ROC) for registration and incorporation of the Company in India.
As a Foreign Company
Foreign entities can also set up their operations in India through Liaison Office, Project Office or a Branch Office.
1. LIAISON OFFICE
Foreign companies are allowed to open liaison offices in India, subject to obtaining specific approval from the RBI, to undertake liaison activities on their behalf. Liaison office acts as a channel of communication between the principal places of business and entities in India.
Permitted activities for a liaison office in India of a person resident outside India:
2. BRANCH OFFICE
Foreign companies engaged in manufacturing and trading activities abroad are allowed to set up Branch Office in India.
Permitted activities for a branch office in India of a person resident outside India:
3. PROJECT OFFICE
Foreign companies planning to execute specific projects in India can set up temporary project/site offices in India. RBI has now granted general permission to foreign entities to establish project offices, subject to specified conditions.
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Type of Business
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The Companies Act, 2013 does not bar a foreign national to be appointed as a Director in an Indian Company. A foreign national shall be having equal responsibilities and powers as an Indian national and he shall be held accountable on same grounds as an Indian national.
Following are the criteria that are to be fulfilled by a foreign national to become a Director of a Company under the Act:
A foreign national shall need to have DSC for making an application for allotment of DIN.
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Opening Of Bank Account For Foreign Entity In India
Every entity which proposes to carry on business in India is required to open a bank account for carrying on the financial transactions for day to day business.
Nowadays, the compliances for opening of bank account have been made stricter.
J&P's team provides efficient services for making application for opening of bank account. We assist the client in preparing all associated documents and making all correspondences of all sorts.