Israel India | Business Guide | 2017

100 > Services > Business in India Israel-India > Business Guide > 2017 F oreign investors have multiple options available to themwhen entering India and can choose any of the following business vehicles: • Incorporating a company in India through a joint venture (“JV”) or a wholly-owned subsidiary • Establishing a Limited liability partnership (“LLP”) • Opening a Liaison office • Opening a Branch office • Opening a Project office Generally, foreign companies prefer to commence operations in India by incorporating a company in India under the Companies Act 2013, through a joint venture or a wholly-owned subsidiary, since it is a separate legal entity. Its members have limited liability and the company is taxed as a domestic company under the Indian Income Tax Act 1961. Are there Separate Laws for Joint Ventures? There are no separate laws for joint ventures.Companies registered in India with even 100% overseas shareholding are considered as domestic companies.A JV in the form of an incorporated company is the most favored type of JV in India although other types of JVs including contractual JVs are possible. The company will be required to register itself with the Registrar of Companies of the relevant State in India where such company establishes its registered office and will need to submit returns under various statues including the Companies Act 2013. The company must have a minimum of two directors with at least one resident Indian director (i.e.a director that has stayed in India for at least 182 Guide to Setting up Joint Ventures in India Providing a Vehicle for Foreign Entities to Set Up Operations in India Adv. Michelle Solomon Le Page Foreign companies prefer to commence operations in India by incorporating a company in India under the Companies Act 2013, through a joint venture or a wholly-owned subsidiary, since it is a separate legal entity Adv. Michelle Solomon Le Page is Associate Partner at Solomon & Co., a full-service lawfirmand is especially reputed for its Corporate,Finance,Real Estate,Litigation and Intellectual Property practice group. www.slmnco.in days in the previous year). A person resident outside India cannot be the managing director, whole time director or manager of the Indian company. FDI and Joint Ventures Foreign Direct Investment (“FDI”) into the Indian company must be in accordance with the FDI Policy of the Government of India. Foreign investment in India is governed by the Foreign Exchange Management Act 1999 as amended from time to time.FDI is permitted up to 100% under the automatic route (i.e. without the need for government approval) in sectors other than restricted sectors which are indicated in the FDI Policy. In sectors where 100% FDI is not permitted, a joint venture is a convenient vehicle to enter into the Indian market. The FDI Policy indicates the percentage of FDI permitted against various sectors. Details of the FDI policy are available on the website of the Department of Industrial Policy & Promotion.At the time of investment into India,the company will be required to file Form FC-GPR containing information in connection with the investment,with the authorized dealer bank.