Setting up a Company in India
India has become an important destination for investment in India. Infact it has become one of the most favorable destination for setting up a company in India. A foreign company planning to invest into can do so by choosing a mode or structure or entity for registration.
A foreign company can start it business by setting up a company in India or setting up a branch office/project office/liaison office in India. There could also be investment through a Joint venture wherein a foreign company can form an association with an existing Indian enterprise.
Many Foreign Companies choose the mode of setting up a Company in India for investment because it has an added advantage over the other modes.
For instance, Branch office / Project Office or Liaison Office cannot undertake manufacturing in India.
Further, they are considered as extended arms of the foreign company and tax authorities monitor the transactions between the foreign company and it branch very closely and strictly.
For a Joint Venture you would always need an existing Indian partner which becomes difficult sometimes due to practical reasons and nature of product.
While setting up a Company in India a foreign company actually establishes a separate stand alone entity in India.
Procedure for setting up a company in India