Entry Strategy into India for Foreign Businesses There are mainly three types of Entry strategies for foreign businesses in India, which are as follows:
Incorporation of Company:
Incorporating a private limited company is the easiest and fastest type of India entry strategy for foreign nationals and NRIs. Foreign direct investments of up to 100% are allowed under the automatic route, and the Central Government does not need to approve them. Therefore, the cheapest, easiest, and fastest entry strategy for NRIs and foreign nationals into India is to form a private limited company as a wholly-owned subsidiary of a foreign firm.
Registration of Branch Office, Liaison Office, or Project Office: RBI and government approval must register branch offices, liaison offices, and project offices. Furthermore, foreign nationals cannot open branches, liaison offices, or project offices. Hence, foreign companies can only use this strategy to enter India. Therefore, the costs and time associated with registering a branch office, liaison office, or project office for a foreign company are higher than the costs and time involved with incorporating a private limited company.
Registration of LLP: A new form of business structure in India combines the advantages of a Company (a separate legal entity having perpetual succession) with the benefits of organizational flexibility associated with a partnership. Before November 2015, NRI or Foreign Nationals investment in LLP required Government approval. Thus, company registration used to be preferred over LLP. However, after changes in FDI regulations on 10th November 2015, NRIs and Foreign Nationals can do LLP registration easily.
Major relaxations that were provided in FDI norms as regards FDI in LLP The FDI regulations were altered on 10th November 2015, to permit 100% FDI in LLPs for businesses that operate in specific sectors via the automatic route. There are no FDI-linked performance requirements. The automatic route allows LLPs to invest downstream in another LLP or a company in specified sectors, and there are no FDI-linked performance requirements. Thus, FDI in LLP is now allowed, and NRIs or Foreign Nationals can start or invest in LLP.
What is the LLP registration procedure for foreign nationals? There are four major steps in the Incorporation process of LLP;
DSC → Name → Incorporation → Agreement
Step 1: The first step is to obtain a “Digital signature certificate” for proposed partners of LLP. To obtain the same NRI’s or Foreign nationals, you must submit a DSC application along with documents such as a Notarized/Apostille copy of passport and address proof.
Step 2: Applicant has to file form RUN LLP for determining availability and reservation of name of LLP business.
Step 3: Once the name is approved, Form Fillip shall be submitted for Incorporation of LLP. This form also provides for the Issuance of DPIN & Issuance of PAN & TAN.
Step 4: On incorporation of the LLP, the Partners shall sign the LLP Agreement and file the same within 30 days in Form 3. Failure to file an LLP agreement on time attracts heavy penalties daily.
Conclusion LLP incorporation is the cheapest, easiest and fastest entry strategy for NRI and foreign nationals into India. With the relaxation of FDI norms for investment in LLP in India, NRIs and Foreign Nationals can choose to register as LLPs.So for you encashing this opportunity is just a call away.
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