Chartered Accountant Delhi

Liaison Office Branch Office 100% Owned subsidiary   Foreign Direct Investment Project Office Investment by way of Share Acquisition

Company Law Service
We are a well recognized chartered accountant firm, providing consultations and services in Company Law Matters. Our services are customized in accordance to your specific requirements. We assist you from the very initial processes of company establishment to company maintenance process, etc. Our services include:

Formation & Registration of Company

E- Filing of Documents with MCA.

Compliance under Companies Act, 1956

Getting the Company name changed.

Formation of Section 25 Company (Non profit making organization)

Getting Charge Registered

Liaison with Registrar of Companies & Regional Directors

Getting Director Identification Number (DIN)

Maintenance of statutory records prescribed under Companies Act, 1956.

NGO's (Non Government Organisations) / Societies and Trust
We assist in the registration procedures of Societies and Trusts as well as in the process of formationof memorandum of association (MOA). We guide them through the modes and methods, procedural formalities and the process of documentation. We also counsel them regarding the benchmark required for registration.
Our panel of accountants with their sound professional information help organizations to meet the requisite criteria to register themselves as licensed charitable or non-profit institutions. Moreover, solutions regarding income tax, statutory and internal audit and many more services are offered by us.

Registration of Trust

Registration of Co-operative Societies

Registration of Company under Section - 25 of Companies Act, 1956

Registration of NGO under Income Tax for Tax exemption u/s 12A

Registration of NGO under Income Tax for u/s 80G

How one can enter in Indian Market One can enter the Indian market in  more ways than one. These are:

Liaison office

Branch Office

100% Owned subsidiary

Project Office.

Joint venture with an Indian partner.

Foreign Direct Investment (FDI).

Public Holding of Part Share.

Appointing Agent or Distributor.

Maintenance and support arrangement.

Liaison Office
A Liaison Office is in the nature of a representative office set up primarily to explore and understand the business and investment climate. A liaison Office is not permitted to undertake any commercial / trading/ industrial activity, directly or indirectly, and is required to maintain itself out of inward remittances received from abroad through normal banking channels.

Activities Permitted:

Representing in India the parent Company / group Companies

Promoting export/ import from/ to India

Promoting technical / financial collaborations between the parent / group    companies and companies in India

Acting as a communication channel between the parent company and Indian    companies

Approval / Incorporation
Any foreign company intending to open a liaison Office in India is required to obtain prior approval from the RBI, the apex foreign exchange management authority in India. Approval is usually granted for three years and can be renewed on expiry thereof.
In addition to above, the foreign company is also required to obtain a Certificate of establishment of place of business in India from the Registrar of Companies (ROC).

Suitability of a Liaison Office
The liaison office generally acts as a communication channel between the parent company overseas and its present or prospective customers in India. The liaison office can also be set up to establish business contacts or gather market intelligence to promote the products or services of the overseas parent company.

The liaison Office cannot undertake any business activity in India nor earn    any income in India. The liaison Office has to meet its entire expenses from funds received from the    parent company through normal    banking channels. At the time of closure of the liaison Office, the RBI grants permission to repatriate the balance in the    Indian bank account to the parent company. Since the liaison Office is not permitted to earn any income, it should not constitute    a taxable entity in India.        However, the liaison Office would be required to withhold    tax from certain payments and hence to comply with the    requisite tax withholding    requirements under the domestic tax law.

In Short
Liaison Office procure order & send the same to parent company, parent company to supply the ordered goods and payment can pursued by liaison office. However payment too be directly remitted to the parent company. No Income Tax in India, only liability of Fringe Benefit Tax (FBT) will arise.

Branch Office
A branch would mean an establishment carrying on substantially the same activity as its Head Office.

Activities Permitted:
As per the guidelines laid down by the RBI, the Branch Office in India is allowed to carry on only the following activities:

Export / Import of goods

Rendering professional or consultancy services

Carrying out research work, in which the parent company is engaged

Promoting technical or financial collaboration between Indian companies and parent    or overseas group companies

Representing the parent company in India and acting as buying / selling agent in    India

Rendering services in Information Technology and development of software in India

Rendering technical support to the products supplied by parent / group companies

Approval / Incorporation
Foreign companies intending to open a Branch Office in India need to obtain prior permission of RBI which would encompass even approval to the scope of activities that are intended to be carried out in India.         
In addition to above, the foreign company is also required to obtain a Certificate of establishment of place of business in India from the Registrar of Companies (ROC).

Typical Points about  Branch Office

This is considered a part of the foreign company and is not treated as a separate    legal entity.

The office can undertake trading activities, but not manufacturing.

It is subject to taxation in India at 42.23% on income accrued in India.

If there is a double taxation agreement with the country in which the foreign    company is incorporated, the tax paid in India can be set off against the total tax    payable by the parent company abroad.

Branch offices may repatriate profits to their Head Office without obtaining prior    approval.

The Branch Office would not expand its activities or undertake any new trading,    commercial or industrial activity other than that is expressly approved by the RBI

The entire expenses of the Branch Office in India will be met either out of the funds    received from abroad through normal banking channels or through income    generated by it in India

The Branch Office will not accept any deposits in India;

Repatriation of Profits
A Branch Office can remit the profits (net of any withholding tax) generated out of its operations in India on production of the prescribed documents, and on establishing that it has earned a net profit by undertaking the permitted activities. The Branch Office need not retain any profits as reserves in India

In Short
Branch Office can do only business activities similar to that to its parent company. No new activity permitted. In the highest tax slab of Indian Income Tax Lab(40%).    The profit so earned net of taxes can be remitted to parent company.

100% Owned subsidiary

Form a Company and the parent Company will hold 100% of Shares in the    Company.

The Company can take up any business in India.

NO RBI permission.

Will be treated as Domestic Company

Tax Rate Slab will be 30%

Approval / Incorporation
The Company is required to obtain a Certificate of establishment of place of business in India from the Registrar of Companies (ROC).

Can be independently promoted by Parent Company

Can be promoted by any two person in India and than the holding of this person    can be purchased by the Parent Company. (If this is the case, intimation about the    transfer of share is required to be informed to Reserve Bank of India).

Typical Points about  100% Subsidiary

The profit earned in India can only be taken away by parent Company in the form of    dividend after payment of dividend tax @ 15%+ surcharge +Education cess

No easy exit.

Transfer pricing issues if purchases made from sister concern.

In Short
100% Subsidiary can take up any business in India. In the tax slab of domestic Indian company Tax Lab(30%).  The profit so earned after payment of 30% + 15% can be remitted to parent company in the form of dividend.

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. Such offices cannot undertake or carry on any activity other than the activity relating and incidental to execution of the project. Project Offices may remit outside India the surplus of the project on its completion, general permission for which has been granted by the RBI.

Joint Venture With An Indian Partner
Foreign Companies can set up their operations in India by forging strategic alliances with Indian partners.
Joint Venture may entail the following advantages for a foreign investor:

Established distribution/ marketing set up of the Indian partner

Available financial resource of the Indian partners

Established contacts of the Indian partners which help smoothen the process of    setting up of operations

Foreign Direct Investment (FDI)
India's foreign trade policy has been formulated with a view to invite and encourage Foreign Direct Investment in India (FDI). The process of regulation and approval has been substantially liberalized. The Reserve Bank of India has prescribed the administrative and compliance aspects of FDI.
FDI can be divided into two broad categories: investment under automatic route and investment through prior approval of Government.

Procedure under automatic route
FDI in sectors/activities to the extent permitted under automatic route does not require any prior approval either by the Government or RBI. The investors are only required to notify the Regional office concerned of RBI within 30 days of receipt of inward remittances and file the required documents with that office within 30 days of issue of shares to foreign investors.

Procedure under Government approval
FDI in activities not covered under the automatic route, requires prior Government approval and are considered by the Foreign Investment Promotion Board (FIPB). Approvals of composite proposals involving foreign investment/foreign technical collaboration are also granted on the recommendations of the FIPB.

Investment by way of Share Acquisition
A foreign investing company is entitled to acquire the shares of an Indian company without obtaining any prior permission of the FIPB subject to prescribed parameters/ guidelines. If the acquisition of shares directly or indirectly results in the acquisition of a company listed on the stock exchange, it would require the approval of the Security Exchange Board of India.