What is my best option for setting up a branch of my company in India?
All international companies thinking of having their own set up in India have a number of India market entry options and need to ask themselves “what type of company do we need?”. There are different Indian market entry options for different types and different levels of investment.
To help companies understand the different options for investment and the benefits and disadvantages of each we have developed a table that summarizes the requirements and pros and cons of each. You can view the entire table below.
The Limited Liability Partnership (“LLP”) is the most recent option available to foreign companies and has the advantage of lower risks and costs but we are often asked by companies whether an LLP is right for them or whether they would be better off setting up a Representative Office (Branch Office, Liaison Office or Project Office), or whether a Private Limited is right for them. As you will see, the flexibility of a LLPs structure and operation makes it a useful option for most SMEs – especially in the service sector. It’s not the right option for all investors – and there are still questions about some aspects of taxation for companies with multiple foreign entities involved in the partnership. And for some it may just be too early to set-up a wholly owned subsidiary.
For companies that are still finding their market & need to “dip a toe in the water” before forming a company, we recommend our business incubator (this works like PEO services in the USA or personnel leasing in Germany or Sweden).
For many firms, finding a business partner – a Joint Venture, Merger or Acquisition – may be the right approach or working with a distribution partner. For many companies, the best approach may be to incorporate their own company in India because foreign subsidiary company is treated at par with the domestic companies as far as taxation is concerned. Also the Government of India has taken many steps in the recent past for ease of doing business in India including simplification of the company incorporation process.
For a review of all the basic market entry options for India please read our very popular article sales in India – what is my best India market-entry strategy?
M+V can help you research the market and work out where you should be – understanding where your customers are and how to set up your distribution network. We can also help you hire the right staff and get all the required company and product registrations. Our teams can also handle all your accounts & taxation, your import & export and even help you sell online in India.