• What is the valid period of existence of a Liaison Office? Can the period of existence of a Liaison Office be extended?

    Permission to set up a Liaison Office is initially granted for a period of 3 years and this may be extended from time to time by the Authorized Dealer Category – I Bank in whose jurisdiction the Liaison Office is set up.

  • What are the permitted activities by a Branch office set up in India?

    a) Export/import of goods
    b) Rendering professional or consultancy services
    c) Carrying out research work, in areas in which the parent company is engaged
    d) Promoting technical or financial collaborations between Indian companies and parent or overseas group company
    e) Representing the parent company in India and acting as buying/selling agent in India 
    f) Rendering services in Information Technology and development of software in India
    g) Rendering technical support to the products supplied by parent/group companies
    h) Foreign airline/shipping company

  • What are the documents involved in formation of Limited Liability Partnership in India?

    a) Proof of identity and residential address of the Designated partners;
    b) Proof of Registered office address and Copy of utility Bills not older than 2 months; 
    c) NOC from owner of the premises;
    d) Details of Partners and Designated Partners;
    e) Details LLP(s) and Company(s) in which Partners are interested; 
    f) Subscribers' sheet including consent of Partners;
    g) Copy of certificate of incorporation of the foreign LLP;
    h) Copy of Authority under which Foreign Limited Liability Partnership is establishing the place of business in India;
    i) Power of Attorney in favour of Authorised Representative;

    If LLP’s name is applied with the incorporation application:
    a) Approval of the owner of the trademark or the applicant of such trademark for registration of Trademark if the proposed name is based on a registered trademark or is subject matter of an application pending for registration under the Trade Marks Act.
    b) Copy of approval in case the proposed name contains any word(s) or expression(s) which requires approval from central government;

    Note: All the documents to be signed by the Foreign Directors and Foreign subscribers requires notarization and apostillation from the foreign country.
     
  • What are the documents involved in formation of wholly owned subsidiary in India?

    a) Proof of Registered office address;
    b) Copy of utility Bills not older than 2 months;
    c) NOC from owner of the premises;
    d) PAN Undertaking by the proposed Directors;
    e) Interest of first director(s) in other entities;
    f) Consent Letter from the Directors in Form DIR-2;
    g) Declaration from the First Directors and Subscribers in Form INC-9;
    h) Board Resolution and Certificate of Incorporation from the foreign company;

    If company’s name is applied with the incorporation application: 
    a) Copy of approval, in case the proposed name contains any word(s) or expression(s) which requires approval from central government; 
    b) Approval of the owner of the trademark or the applicant of such trademark for registration of Trademark, if the proposed name is based on a registered trademark, or is subject matter of an application pending for registration under the Trade Marks Act;

    Note: All the documents to be signed by the Foreign Directors and Foreign subscribers requires notarization and apostillation from the foreign country.
  • What are the Important clauses included in a Joint venture Agreement?

    Some of the important clauses in a Joint Venture Agreement are as below:
    a) Object and scope;
    b) Equity Participation by local and foreign investors;
    c) Lock in Clause;
    d) Financial Arrangements;
    e) Composition of Board and Management arrangements;
    f) Remedying a deadlock;
    g) Roles & Responsibilities of the Parties;
    h) Exit Clause;
    i) Representations, Warranties & Covenants of the Parties;
    j) Confidentiality;
    k) Dispute Resolution;
     

  • What are the most common structures employed to constitute a Joint Venture (JV)?

    The most common structures employed to constitute a Joint Venture (JV) are:

    a) Unincorporated Joint Venture (UIJV) which include Cooperation Agreement/Strategic Alliances/Consortium. UIJV is preferable as no separate entity is required to be formed in case of UIJV. Merely, an Unincorporated Joint Venture Agreement is required to be entered among the parties.

    b) Incorporated Joint Venture which include either Company or Limited Liability Partnership (LLP)
     

  • Is it mandatory to appoint a Resident Designated Partner in an LLP?

    Yes, pursuant to the provisions of the Limited Liability Partnership Act, 2008, it is required to have one Resident Designated Partner in an LLP.

  • Is it mandatory to appoint a Resident Director in a Company?

    Yes, there is a mandatory requirement to appoint at least One (01) Resident Director in a Company. Section 149(3) of the Companies Act. 2013 (“The Act”) states that every Company should have at least one Director who has stayed in India for a total period of not less than 182 days in the Financial Year.

  • In case of an overseas Subscriber and Director, are the documents required to be Notarised and Apostilled for incorporation of a company?

    As per Rule, 13 of the Companies (Incorporation) Rules, 2014, where the subscriber to the Memorandum of Association (“MOA”) or a Director to be appointed is a foreign national residing outside India, the MOA, Articles of Association (“AOA”), proof of identity as well as address proof shall be attested in the following manner which is based on the country where the Subscriber/Director reside or the registered office is situated in case of a body corporate being the subscriber:

    • Residing in a country which is part of the Commonwealth – by a Notary (Public) in that part of the Commonwealth;
    • Residing in a country which is party to the Hague Apostille Convention, 1961 – by a Notary (Public) and duly apostilled in accordance with the said Hague Convention; and
    • Residing in a country which is not party to the Hague Apostille Convention, 1961 – the documents shall be notarized before the Notary (Public) of such country and the certificate of the Notary (Public) shall be authenticated by a Diplomatic or Consular Officer empowered in this behalf under Section 3 of the Diplomatic and Consular Officers (Oaths and Fees) Act, 1948 (40 of 1948) e. attested by Public Notary and authenticated by Indian Embassy in the country of residence. Some of the counties which falls under the list of Hague Convention are: United Kingdom of Great Britain and Northern Ireland United States of America, Singapore, Switzerland, Malaysia, Australia, China, People's Republic of, Japan, Germany.
       
  • Is it allowed to use words “India” “Global” “International” in the name of an Indian entity?

    “India” can be used by foreign company which is incorporating its subsidiary company in India. The original name of the holding company as it is may be allowed with the addition of word “India” or name of any Indian state or city, if otherwise available.
    The words “Global” “International” can be used in the name of an Indian company.
     

  • What is apostille and how to get the documents apostilled and notarized from the foreign country?

    An "apostille" is a form of authentication/certification issued to documents for use in countries that participate in the Hague Convention of 1961. Apostille is to confirm the legal authenticity of any document. A list of countries that accept apostilles is provided by the US State Department.
    Apostilles are affixed by Competent Authorities designated by the government of a state which is party to the convention.
    A list of these authorities is maintained by the Hague Conference on Private International Law. Examples of designated authorities are embassies, ministries, courts or (local) governments.
    An Apostille Certificate is official government Certificate printed or stamped onto the reverse side of a single page document or attached to multiple paged documents with green notary ribbon making it become one inseparable document. It authenticates the seal and or signature of the public official or authority such as a notary or registrar issuing the document.
     

  • Which are the permissible ways in which an FVCI can make the investment?

    The FVCI is permitted to:

    a) Purchase the securities/ instruments (permitted for FVCI) either from the issuer of these securities/ instruments or from any person holding these securities/ instruments.

    b) Invest in securities on a recognized stock exchange subject to the provisions of the SEBI (FVCI) Regulations, 2000, as amended from time to time.

    c) Acquire, by purchase or otherwise, from, or transfer, by sale or otherwise, to, any person resident in or outside India, any security/ instrument it is allowed to invest in, at a price that is mutually acceptable to the buyer and the seller/ issuer.

    d) Receive the proceeds of the liquidation of VCFs or of Cat-I AIFs or of schemes/ funds set up by the VCFs or Cat-I AIFs.

  • How can an Indian company receive foreign investment?

    Investments can be made by non-residents in the equity shares/fully, compulsorily and mandatorily convertible debentures/fully, compulsorily and mandatorily convertible preference shares of an Indian company, through the Automatic Route or the Government Route. Under the Automatic Route, the non-resident investor or the Indian company does not require any approval from Government of India for the investment. Under the Government Route, prior approval of the Government of India is required. Proposals for foreign investment under Government route, are considered by respective Administrative Ministry/Department. Foreign investment in sectors/activities under government approval route will be subject to government approval where:

    a) An Indian company is being established with foreign investment and is not owned by a resident entity.

    b) An Indian company is being established with foreign investment and is not controlled by a resident entity.

    c) The control of an existing Indian company, currently owned or controlled by resident Indian citizens and Indian companies, which are owned or controlled by resident Indian citizens, will be/is being transferred/passed on to a non-resident entity as a consequence of transfer of shares and/or fresh issue of shares to nonresident entities through amalgamation, merger/demerger, acquisition etc.

    d) The ownership of an existing Indian company, currently owned or controlled by resident Indian citizens and Indian companies, which are owned or controlled by resident Indian citizens, will be/is being transferred/passed on to a non-resident entity as a consequence of transfer of shares and/or fresh issue of shares to nonresident entities through amalgamation, merger/demerger, acquisition etc.

    e) It is clarified that Foreign investment shall include all types of foreign investments, direct and indirect, regardless of whether the said investments have been made under Schedule 1 (FDI), 2 (FII), 2A (FPI), 3 (NRI), 6 (FVCI), 9 (LLPs), 10 (DRs) and 11(Investment Vehicles) of FEMA (Transfer or Issue of Security by Persons Resident Outside India) Regulations. FCCBs and DRs having underlying of instruments which can be issued under Schedule 5, being in the nature of debt, shall not be treated as foreign investment. However, any equity holding by a person resident outside India resulting from conversion of any debt instrument under any arrangement shall be reckoned as foreign investment.

    f) Investment by NRIs under Schedule 4 of FEMA (Transfer or Issue of Security by Persons Resident outside India) Regulations will be deemed to be domestic investment at par with the investment made by residents.

    g) A company, trust and partnership firm incorporated outside India and owned and controlled by non-resident Indians will be eligible for investments under Schedule 4 of FEMA (Transfer or issue of Security by Persons Resident Outside India) Regulations and such investment will also be deemed domestic investment at par with the investment made by residents.

  • What is the institutional framework governing FDI in India?

    FDI in India is regulated under Schedule 1 of Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 (Original notification is available at link; subsequent amendment notifications are available at link2.

    Besides FEMA, 1999, FDI is also subject to other regulations as per Reserve Bank of India (RBI) and DPIIT. DPIIT is the nodal agency entrusted to formulate FDI Policy. It issues press notes to make amendments in the existing policy and also issues consolidated FDI Policy on an annual basis.

  • Can one increase the Company's authorized capital to get more external funding?

    The authorized capital of a Company can be increased at any time as per the Companies Act, 2013 and in case the Article of Association does not allow this, the AoA can be amended by passing a “special resolution”. One may also consider getting External Commercial Borrowings.

    For more information, click here.