On 27th Sept 2015 Mr Narendra Modi Visited Facebook headquarters key take aways we will discuss and then what Make in India Programme have for the USA Companies in INDIA.
India have a ample growth story from the year MR Narendra Modi took charge of Indian Government systems and hence creating a system for manufacturing in India giving many hopes and diversified the growth in many sectors which are as follows:-
Sectors
Investment opportunities in Make in India
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Sectors
Investment opportunities in Make in India
OPPORTUNITIES ACROSS THE VALUE CHAIN
PUBLIC PRIVATE PARTNERSHIP:
- The policy and regulatory frameworks (concession agreements) are well established; substantial scale-up in the last 5 years; opportunities for companies to venture as “Project Developers”.
CONTRACTORS/CONSULTANTS:
- Opportunities from implementing agencies who will sub contract construction.
O&M OPERATORS:
- Substantial requirements of equipment, systems and software.
EQUIPMENT SUPPLIERS:
- Consistent demand of equipment due to mega infrastructure development across sectors; huge business potential for overseas players to enter the market.
ROLLING STOCK SUPPLIERS:
- Increasing demand for various types of passenger & freight rolling stock; attractive opportunity exists for private players.
FINANCING:
- Attractive opportunities exist for Financial Institutions, Private Equity firms and private investors.
Foreign Direct Investment in India
Trends in India’s Foreign Direct Investment (FDI) are an endorsement of its status as a preferred investment destination amongst global investors. India's strengths span telecommunications, information technology, auto components, chemicals, apparels, pharmaceuticals, and jewellery.
Trends in India’s Foreign Direct Investment (FDI) are an endorsement of its status as a preferred investment destination amongst global investors. India's strengths span telecommunications, information technology, auto components, chemicals, apparels, pharmaceuticals, and jewellery.
India’s steady economic liberalization and its embrace of the global economy have been key factors in attracting FDI. The government recently opened up multi-brand retail and civil aviation markets to 51 and 49 per cent FDI respectively and with more reforms expected in insurance and pension sectors, among others, India will continue to offer compelling opportunities to the global investment community.
Investment opportunities available in different sectors in India :-
India provides great avenues for investments in various sectors. Please click on the sector of your choice to know more.
- Automobile
- Automobile Components
- Aviation
- Biotechnology
- Cement
- Chemicals
- Construction
- Defence Manfacturing
- Education
- Electrical Machinery
- Electronic Systems
- Food processing
- Gems & Jewellery
- Healthcare
- Heavy Industry
- IT & BPM
- Leather
- Media & Entertainment
- Mining
- Oil & Gas
- Pharmaceuticals
- Ports
- Railways
- Renewable Energy
- Retailing
- Roads & Highways
- Space
- Steel
- Telecommunications
- Textiles and Garments
- Thermal Power
- Tourism and Hospitality
- Wellness
How to setup Business in India various verticals of investing and setting up in India?
Opportunities ways in India as follows:-
Setting up a non-corporate entity
Liaison office: A liaison or a representative office can be opened in India subject to approval by Reserve Bank of India. Such an office can undertake liaison activities on its company’s behalf. A liaison office can also undertake:
- Representing parent/group companies in India
- Promoting import/export in India
- Promoting technical/financial collaborations on parent company/group’s behalf
- Coordinating communications between parent/group companies and Indian companies
Branch Office: Foreign companies can conduct their business in India through its branch office which can be opened after obtaining a specific approval from Reserve Bank of India. A branch office can undertake following activities:
- Import & export of goods
- Rendering professional or consultancy services
- Carrying out research work in area which its parent company is engaged
- Promoting technical/financial collaborations on behalf of parent company/ overseas group company
- Representing parent/group companies in India and acting as buying/selling agent in India
- Providing IT services and developing software in India
- Providing technical support for products supplied by parent company/group
Project office: If a foreign company is engaged by an Indian company to execute a project in India, it may set up a project office without obtaining approval from Reserve Bank of India subject to prescribed reporting compliances. As applicable in case of a branch office, a project office is treated as an extension of foreign company and is taxed at the rate applicable to foreign companies.
Setting up a corporate entity
Wholly owned subsidiary: Foreign companies can set up wholly owned subsidiary companies in India in form of private companies subject to FDI guidelines. A wholly owned or a subsidiary company has the maximum flexibility to conduct business in India when compared with a liaison or branch office and has following salient features:
How to setup in India requirements in India ?
Liaison office: Setting up of a liaison office requires prior approval from Reserve Bank of India (RBI). Approval is usually granted for a period of three years and can be renewed thereafter.
Branch office: A prior approval from RBI is required. RBI closely examines the proposed activities to be carried out in India.
Subsequently, a certificate of establishing place of business in India is required to be obtained from Registrar of Companies.
Project office: In specified cases, a project office is allowed to be set up under automatic route otherwise a prior approval is required from RBI. As in case of branch office, a certificate of establishing place of business in India is required to be obtained from Registrar of Companies.
Incorporation of a company
For registration and incorporation, an application has to be filed with Registrar of Companies. Once a company has been registered and incorporated in India, it is subject to laws and regulations as applicable to other domestic companies in India.
For registration and incorporation, an application has to be filed with Registrar of Companies. Once a company has been registered and incorporated in India, it is subject to laws and regulations as applicable to other domestic companies in India.
There two types of companies which can be incorporated:
Private company: A private company is a company which has minimum of two members and a minimum paid up capital of Rs. 0 or a higher paid up capital as may be prescribed.
By its articles, a private company has to:
By its articles, a private company has to:
- Restrict rights to transfer its shares, if any
- Limit its shareholders to a number of fifty
- Prohibit any invitation to public to subscribe any of its shares or debentures of the company
- Prohibit any invitation to acceptance of deposits from any person other than its members, directors or their relatives
Public company: A public company is defined as a company which is not a private company. A subsidiary of a public company is also treated as a public company. A public company is required to have a minimum paid up capital of Rs.0 with a minimum seven members and three directors. Maximum number of directors is 12 but can be increased subject to government approval.
Incorporation procedure:
Following steps are required to incorporate a company:
- Obtaining DIN (Director Identification Number)
- Applying for name availability
- Drafting Memorandum of Understanding (MOU) and Articles of Association (AOA)
- Court stamping of MOU and AOA
- Signing of MOU and AOA by first subscribers
- Filing with Registrar of Companies (ROC)
- Vetting of MOU and AOA by ROC
- Obtaining certificate of incorporation
Immediate Business compliances:
Following registrations would be required to be done, depending on nature of business:
- PAN (Permanent Account Number): All income tax payers are required to obtain an income tax registration number i.e. PAN
- TAN (Tax Deduction Account Number): While running a business, certain payments will require the payee to withhold tax. A new business is required to obtain Tan from income tax department.
- Service tax: A person/company providing specified services needs to obtain service tax registration within 30 days of providing the services.
- VAT (Value Added Tax): VAT is levied on sale of goods. Any business proposing to carry out a works contract or trade in goods needs to register for VAT.
- Excise registration: Excise is an indirect tax levy on manufacture of goods.
- FRRO (Foreigners Regional registration Office): Foreigners coming to India on employment need to register with FRRO within 14 days of their arrival.
- IEC (Import Export Code): Prior to carrying out any export or import activities, it is mandatory to obtain an IEC from Directorate General of Foreign Trade.
Invest in India options availbles as follows:-
- Foreigners can directly invest in India either on their own or as a joint venture, with a few exceptions with regard to investment limits and sectors.
- No government approval is required for FDI in virtually all sectors except a small negative list formulated by government. Sector specific guidelines are formulated by government giving sectoral investment caps if any.
- If an investment does not qualify for automatic approval, FIPB considers the proposal.
- Use of foreign brands names/trademarks is permitted for sales in India.
- Indian capital markets are open to FII’s and Indian companies are allowed to raise funds from international capital markets
- Foreign technology collaborations are allowed with agreements on
- Technical knowhow fees
- Payment for designs and drawings
- Payment for engineering services
- Other royalty payments
- NRI’s can invest in shares and or convertible debentures of Indian companies on a non-repatriable basis and these investments are not considered as FDI.
How to make use of Profits earned in India and routes of Repatriations in India?
- Repatriation of investment capital and profits earned:
There are three basic points to note with respect to repatriation:- All foreign investments are freely repatriable, subject to sectoral policies. Dividends declared on foreign investments can be remitted freely through an authorised dealer.
- Non-residents can sell shares on the stock exchange without prior approval of the Reserve Bank of India (RBI) and repatriate the sale proceeds through a bank, if they hold the shares on repatriation basis and if they have necessary NOC/tax clearance certificate issued by the Income Tax authorities.
- For sale of shares through private arrangements, regional offices of the RBI grant permission for recognized units of foreign equity in Indian company in terms of guidelines indicated in Regulation 10.B of Notification No. FEMA.20/2000 RB dated May 2000. The sale price of shares on recognized units is to be determined in accordance with the guidelines prescribed under Regulation 10.B (2) of the above Notification (www.rbi.org.in).
- Locational Restrictions: Industrial undertakings are free to select the location of their projects. Industrial License is required if the proposed location is within 25 km of the Standard Urban Area limits of 23 cities having population of 1 million as per 1991 census. (www.censusindia.net)
- Environmental Clearances: Entrepreneurs are required to obtain statutory clearances relating to pollution control and environment as necessary for setting up an industrial project for 31 categories of industries in terms of Notification S.O. 60 (E) dated 27.1.94 as amended from time to time, issued by the Ministry of Environment & Forests under The Environment (Protection) Act, 1986. Details can be obtained at the website of Ministry of Environment and Forests (http://envfor.nic.in).
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