A foreign company can set up business operations in India either as (i) an Incorporated Entity or (ii) as an Unincorporated Entity. An Incorporated Entity can either be a subsidiary or a joint venture with an Indian partner, the major difference between the two being the share capital structure and composition of the Board of Directors. However, the procedure for incorporation of wholly owned subsidiaries and joint venture companies is the same. The decision to set up a Joint Venture or a Wholly Owned Subsidiary depends upon various factors such as - (i) whether 100 % Foreign Direct Investment is allowed in the sector of interest and (ii) whether it would be beneficial to go for a strategic alliance with an Indian partner.

A Foreign Company can also operate in India as an Unincorporated Entity in the form of (i) a liaison/representative office, or (ii) a Branch office, or (iii) a Project office. Opening of such offices is governed by the Foreign Exchange Management Regulations, 2000, which places restrictions on the activities and operation of such offices:-

	i.	A Liaison office cannot undertake any commercial activity directly or indirectly and cannot, therefore, earn any income in India.
	ii.	A Project office cannot undertake or carry on any activity other than the activity relating and incidental to execution of the concerned project.
	iii.	Branch offices are also not allowed to carry on manufacturing, processing and retail trading activities of any nature in India. However, as per Regulation 6 read with Schedule I of the Foreign Exchange Management (Establishment in India of Branch or Office or other Place of Business) Regulations, 2000, a branch office can represent the parent company in India, act as buying/selling agent in India and is authorized to Export and Import goods. Under Regulation 5 of the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2000, such branch offices can, however, acquire immovable properties in India, which is/are necessary for or incidental to carrying on the activities thereof.

CLG Incorporation Practice   

CLG has assisted its clients, mostly foreign companies, in setting up their presence in India. CLG has extensive experience of incorporating subsidiary companies and joint venture companies with the Registrar of Companies of various jurisdictions in India and has rendered its services in setting up branch offices, liaison offices and project offices across India. Its familiarity with the procedural aspects of company incorporation apart, CLG’s professionals are well adept in drafting incorporation documents including Memorandum of Association and Articles of Association. We offer our clients comprehensive inputs on business-set-up strategies and place strong emphasis on multidisciplinary delivery. We bring all elements of the deal together - legal due diligence, indirect tax implications, competition policy, employment issues, real estate, compliance issues etc. CLG has successfully set up Indian subsidiaries and representative offices of some of the best known corporate houses, negotiated various complex Joint venture deals and set up joint venture companies.