Entry Strategies

OPTIONS FOR SETTING ENTITY IN INDIA:

A foreign company planning to set up business operations in India has the following options:

As an Indian Company

A foreign company can commence operations in India by incorporating a company under the Companies Act, 1956 through

• Joint Ventures; or
• Wholly Owned Subsidiaries

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.

Wholly Owned Subsidiary Company

Foreign equity in wholly owned subsidiary Company can be up to 100% depending on the requirements of the investor, subject to equity caps in respect of the area of activities under the Foreign Direct Investment (FDI) policy.