How to establish an
Indian business as a foreign entity
To make a strategic investment in India, NRIs have to take advantage of Foreign Direct Investment. An international organization that needs to run a business in India should incorporate its company according to the Companies Act 2013. A person or an entity outside India has the right to invest in this country. But, it has to abide by the FDI policies set by the Indian Government.
The FDI has set the percentage limits for investments based on the industry or sector of the business. Furthermore, the policy has revealed the need for having approval by government authorities like RBI. FDI is not allowable for some sectors, including
- Chit funds
- Lottery business
- Nidhi company
- Construction and real estate business
- Cigar manufacturers
- Gambling and casinos
Moreover, there should be no collaboration with foreign technology by any means like brand name, trademark, and franchise. Indian organizations issue equity shares, convertible debentures, and convertible preference shares. NRI should also know about the sale proceed remittance. Banks permit the remittance of a security to the sellers of different shares.