what is a foreign company?

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LATHA RAMESH (Querist)
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09 April 2008 Hi Experts
I just know that a foreign company is incorporated outside india and has a place of business in India. we have 100% subsidary companies like Ford motors etc., will it come into the cagegory of foreign company? If a foreign company sets up business in place like SEZ, will it get the same tax holidays as enjoyed by other companies?

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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09 April 2008 Companies incorporated in India, even if they are 100% subsidiaries of foreign companies, will not come into the cagegory of foreign company.

R.V.RAO

R.V.RAO (Expert)
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09 April 2008 INTERESTING QUESTIONS IN DEED. FOR YOUR AS WELL AS BENEFIT OF OUR CA CLUB MEMBERS,I REPRODUCE BELOW FROM THE IND.EMBASSY WEBSITE AS TO HOW FOREIGN COS. ARE CONSTITUTED IN INDIA AND HOW THEY INVEST IN OUR COUNTRY.

SOURCE:
http://www.indianembassy.sk/uk_03_02.html

Foreign companies can make investments or operate their business in a number of ways as given below :-

Liaison/ representative office
Project office
Branch office
Wholly owned subsidiary
Joint venture company

Financial /Technical /Techno-financial approval is given by
Under Automatic route through RBI
Government/FIPB/RBI automatic approval is governed by Press Note No. 2 of 2000 subject to sectoral caps .

Any company set up with FDI has to be incorporated under the Indian Companies Act with the Registrar of Companies and all Indian operations would be conducted through this company.

a foreign company incorporated under the Companies Act is treated at par with any domestic Indian company within the scope of approval and subject to all Indian laws.
3. How does a foreign company invest in India?
Either through:
Automatic Approval - by the country's Central Bank, the Reserve Bank of India (RBI), Mumbai, or
Through the Foreign Investment Promotion Board (FIPB)
Automatic Approval through Reserve Bank of India is available for all items/activities except a few as given in the Press Note No.2(2000 series) dated 11.2.2000.
The sector specific guidelines in this regard are given in the Manual on Industrial Policy & Procedures in India. No prior approval required.
The company is only required to report to RBI within 30 days of receipt of foreign equity/allotment of shares.
FIPB approval is required for all other proposals not eligible for Automatic Approval.

WWW.SUNMEDIAONLINE.COM BELOW ANSWERS YOUR 2ND QUESTION IN AFFIRMATIVE WHETHER FOREIGN COMPANY 'S SEZ IN INDIA ENJOYS SAME BENEFITS AS INDIAN CO'S SEZ.

Government clears Nokia's SEZ proposal
The Finance Ministry has cleared Finnish telecom major Nokia’s plans for setting up a Special Economic Zone (SEZ) at Sriperumbudur in Tamil Nadu for manufacturing telecom equipment and mobile handsets.
Highly-placed government officials told Business Line that the necessary approvals and benefits for Nokia's SEZ has been given after the company agreed to acquire additional land which was the minimum required by law for it to be declared an SEZ.
FOR MORE ELABOTARATE DETAILS ON SEZ AND FOREIGN COS. PL. VISIT WWW.FINMIN.NIC.IN
AND WWW.DIPP.NIC.IN
R.V.RAO

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