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An Overview of Doing Business in India by Poorvi Chothani, Esq. © LawQuest 2009. All Rights Reserved.
An Overview of Doing Business in India
by Poorvi Chothani, Esq. LawQuest
www.lawquestinternational.com
October 27, 2009
An Overview of Doing Business in India by Poorvi Chothani, Esq. © LawQuest 2009. All Rights Reserved.
Introduction to India• A growing country with 50% of the population under the age of 25
• Highly skilled manpower
• Consistently increasing GDP
• Largest democracy and tenth largest economy in the world. India is the fourth largest economy in the world in terms of purchasing power parity.
• A federal system of Government
• Foreign investment permitted under the “automatic route” in almost all sectors
• FDI under the “automatic route” only subject to reporting requirements
• FDI prohibited in the following sectors:• Arms and ammunition, Atomic Energy, Coal and lignite, Rail Transport,
Mining of metals like iron, manganese, chrome, gypsum, sulfur, gold, diamonds, copper, zinc
An Overview of Doing Business in India by Poorvi Chothani, Esq. © LawQuest 2009. All Rights Reserved.
FDI Cap
• Cap on Certain Sectors• Luxury commodities for FDI is currently 51%. Govt. is
proposing to take it up to 100%
An Overview of Doing Business in India by Poorvi Chothani, Esq. © LawQuest 2009. All Rights Reserved.
Business Structures• Foreign Investment is not permitted in partnership firms• Foreign nationals cannot operate in India as sole proprietors of a
business
Available Options• Liaison Office/Representative Office• Project Office • Branch Office • Limited Liability Companies
– Joint Ventures – Wholly Owned Subsidiaries
An Overview of Doing Business in India by Poorvi Chothani, Esq. © LawQuest 2009. All Rights Reserved.
Incorporation of Limited Liability Company
• Private Limited Company
• Public Limited Company
• Registrar of Companies
• Foreign Nationals as Shareholders and/or Directors
An Overview of Doing Business in India by Poorvi Chothani, Esq. © LawQuest 2009. All Rights Reserved.
Perfume Machinery
Indian Manufacturers• Satik’s S.S. Perfume candle filter press machine• Blenzor (India) - India’s No.1 designer and manufacturer
Indian Distributors of Foreign Machinery• G.Aromas• Cosmic International• Harley’s Cosmetic & Chemical Work• Sadik Kazura Aromatics
Options To Enter the Indian Market• Agent• Wholly Owned Distributorship• Independent Distributor• Manufacture and Seller
An Overview of Doing Business in India by Poorvi Chothani, Esq. © LawQuest 2009. All Rights Reserved.
Luxury Watches
Single Brand Retailing - FDI – up to 51 %
Popular International Brands in India • Christian Dior• Seiko• TAG Heuer• Omega• Movado• Rolex • IWC
Options To Enter the Indian Market - JV
An Overview of Doing Business in India by Poorvi Chothani, Esq. © LawQuest 2009. All Rights Reserved.
The Travel Industry
International Travel Agencies in India• Kuoni (along with SOTC)• Cox and Kings• Thomas Cook • Andrew Harper Inc.
Online Travel Agencies• Travelguru.com• Yaatra.com• Raj Travels• Rangoli-India• Insignia
Options To Enter the Indian Market• Agent• Wholly Owned Distributorship• Franchise
An Overview of Doing Business in India by Poorvi Chothani, Esq. © LawQuest 2009. All Rights Reserved.
The Automobile Industry
Foreign Brands in India• Porsche• Audi• Honda• Hyundai• Rolls Royce• BMW• Mercedes Benz• Land Rover
Indian manufactures• Tata• Mahindra and Mahindra• Maruti
Entry Options in Indian Market• Manufacturer (Wholly Owned or JV)• Dealer• Agency
An Overview of Doing Business in India by Poorvi Chothani, Esq. © LawQuest 2009. All Rights Reserved.
Solar and Other Alternative Energy
100 % FDI Permitted
Local Companies
Majarishi Solar TechnologyEmmvee Solar Systems LtdReliance Industries Limited (Solar Energy Group)
Government Incentives• Central government incentives to States and Union territories to
adopt SPV systems • Encouraging energy efficiency in Special Economic Zones • Incentives to Banks and Micro Finance Companies that offer
finance at the micro level
An Overview of Doing Business in India by Poorvi Chothani, Esq. © LawQuest 2009. All Rights Reserved.
FDI In Real Estate
Investment in Real EstateIndividuals are not permitted to invest in real estate unless it is in connection with Real Estate Development or Other Investment (for e.g. Investment in an Indian company that then needs to buy an office)
Real Estate Development• Services Housing Plots – minimum 10 hectares • Construction development projects a minimum built up area of
50,000 sq. meters• Minimum Capitalization of US$ 10 million (Wholly Owned
Subsidiaries)• Minimum Capitalization of US$ 5 million with an Indian JV partner• FDI cannot be repatriated before three years
An Overview of Doing Business in India by Poorvi Chothani, Esq. © LawQuest 2009. All Rights Reserved.
Statutory Permits
• Reserve Bank of India (RBI) Reporting• Foreign Investment Promotion Board (FIPB) approvals wherever
needed• Obtaining the statutory permits - local, state and national• Registration under the Shops and Establishment Act• Zoning licenses and new electric supply licenses• Permissions to be obtained from state Industrial Development
Corporation. • Consent from state Pollution Control Board
An Overview of Doing Business in India by Poorvi Chothani, Esq. © LawQuest 2009. All Rights Reserved.
LawQuest’s Areas of Practice • Transaction and Business Law • Real Estate and Property Law• Personal Law, Wills and Trusts • Intellectual Property Law • Global Immigration Law • Dispute Resolution
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An Overview of Doing Business in India by Poorvi Chothani, Esq. © LawQuest 2009. All Rights Reserved.
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