• Operations for a US Company in India

We are on online marketplace incorporated in the US that sells to US customers. We need an operations center in India. This is a center where our Indian vendors will send their products for 4-5 weeks. Once they send, the products will be featured on our US website. Whatever is sold will be shipped from the operations center. Whatever is not sold, will be returned to the vendors. To make this happen, what sort of business entity do we need to set up in India. We will not sell to Indian customers.
Asked 7 years ago in Business Law

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4 Answers

1) A foreign company can commence operations in India by incorporating a company under the Companies Act, 2013 through:

Joint Ventures; or

Wholly Owned Subsidiaries

Foreign equity in such Indian companies 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.

2) For registration and incorporation, set of applications have to be filed with Registrar of Companies (ROC). Once a company has been duly registered and incorporated as an Indian company, it is subject to Indian laws and regulations as applicable to other domestic Indian companies.

3) Foreign companies engaged in manufacturing and trading activities abroad are allowed to set up Branch Offices in India for the following purposes:

Export/Import of goods

4) A branch office is not allowed to carry out manufacturing activities on its own but is permitted to subcontract these to an Indian manufacturer. Branch Offices established with the approval of RBI, may remit outside India profit of the branch, net of applicable Indian taxes and subject to RBI guidelines Permission for setting up branch offices is granted by the Reserve Bank of India (RBI

Ajay Sethi
Advocate, Mumbai
96803 Answers
7810 Consultations

1. You need to set up a company in India incorporated under Indian Companies Act.

2.The said company must have minimum one Indian Director.

3.Selling to Indians or not is not compulsory.

4. You can open your branch office in india even if you do not sell here.

Devajyoti Barman
Advocate, Kolkata
23198 Answers
510 Consultations

1. You you operate from India i.e. procure and sell from/in India then you shall have to incorporate your entity in India also.

2. after incorporating your company in India duly complying with all the formalities prescribed in India you can start your operation from/in India.

3. It shall be prudent on your part to engage a local lawyer having wide experience in this field to arrange for your incorporation in India and also for obtaining sales tax, I.Tax , VAT and other registrations required in India for staring business.

Krishna Kishore Ganguly
Advocate, Kolkata
27453 Answers
726 Consultations

A business agreement by the terms and conditions reduced to writing and the agreement being a registered document shall be a better option.

Even trading agreement may be entered with many vendors in respect of their products and on the terms that you would frame.

T Kalaiselvan
Advocate, Vellore
87004 Answers
2335 Consultations

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