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No any foreign multinational company or organization prefers doing a business on the soil of those countries where uncertainty prevails, causing in this way a negative repercussion on its business. India has a privilege of being accepted worldwide as a a most lucrative destination for business, not only for domestic industries but foreign companies as well.  

Before setting up a full fledged industry or factory on the soil of a foreign country(destination country), each organization first of all sets up a liaison office in the destination country to explore better opportunities existing there. It also inquires whether a business in the destination country will flourish and help it pocket a huge profit. Just after considering several pros and cons and looking at the prevalent competitions, available resources, infrastructure, labour, raw materials, market structure, taste of customers and trend, the foreign companies plan to embark upon setting up their business in destination country.

Just after ensuring a congenial business environment the foreign sector companies shift their attention on legal protection and go through legal synopsis. And after getting convinced even of the legal synopsis the foreign companies establish step in to set up their business in destination country like India. The companies set up a branch and project-office (also known as subsidiary company or joint venture) in the destination country. Such branch office carries coordinates all the business related activities, while the project office accomplishes crucial projects within a limited time framework. Being not the legal entities the branch and project office are levied meager surcharges and cess on behalf of destination country. Such taxes happen to be a little higher for the foreign companies than the existing surcharges meant for domestic industries.

India – A Good Destination For Foreign Comapanies

No any giant commercial company plans for setting up its factories over the land of foreign country, unless it finds its destination offering a favorable environment and legal protection to let its business flourish bringing in a huge profit. As far as India is concerned, it has established its identity on the map of world as one of the most preferred destinations offering a low-cost skilled and talented labor force, professionals, high economy growth and a legal protection and support of Indian government.

India has emerged as one of the most favored destination country attracting large number of foreign banks, financial institutes, commercial companies and big organizations. Several companies have expanded their business inviting even the Indian public as well as private sectors to participate in a joint venture and share the profit thereof. Keeping in view a huge profit accruing through the joint ventures, the Indian companies offer all the helps to the foreign companies providing them lands, infrastructure, low cost labour and support of entire business community in India. Such a congenial atmosphere offered by India has made it world’s favorite destination country for all the foreign companies.

By establishing subsidiary company consisting of liaison office, branch office and the project office, the foreign companies do their business in collaboration with Indian companies successfully having financial assistance, technical assistance, trademark/brand name License, etc. The foreign companies do their businesses in India by manufacturing, marketing and exporting their manufactured goods without encountering any legal hurdle. India, emerged as a good destination country for foreign companies makes arrange even the non-available infrastructures to the foreign companies by importing them from other foreign countries, thus removing the burden of legal impediment from the way of foreign companies.

Though India, being a sought-after destination India, has allowed several companies to set up their business on its soil, it keeps a strict vigilance over the business, its impact on Indian culture and here’s public. In order to keep a watch over unscrupulous activities in the name of business in India, the Indian government has arranged a few legal watchdogs as well like Foreign Investment Promotion Board (FIPB), Reserve Bank of India (RBI) and Ministry of Commerce and Industry. Such departments(also known as nodal agencies) though keep a strict watch over all the business activities of foreign companies, they provide them, during a financial need, the monetary assistance as well, apart from guiding in different business related fields.

Legally a foreign direct investment(FDI) is not permitted without approval of Indian government. Though FDI is permissible in some sectors like insurance, aviation, banking and telecoms, it is prohibited in a few specific sectors such as retail trading, atomic energy and lottery.

However in order to let reputed foreign companies do their business with a great ease on Indian soil, a few existing unlisted Indian companies can also be transferred to them after Indian government’s approval.

As far as trademark is concerned, it can be permitted to be used in India with the Indian government’s charging a fees or against royalty. Each foreign company will have to furnish its business related periodic-reports(quarterly or annual) to the Indian government and apex body of other related departments. 
 
Unlike the Indian companies-who require to register themselves for starting their business at different locations, by applying to the related departments and obtain thereafter a licenses from the government of India- the foreign companies are immune to such prerequisite and can carry on their business from any part of India, with in 15 to 20 days of submitting a letter requesting for incorporation in India.

A multi tier system has been in existence in India for long levying direct and indirect taxes on domestic companies. Such taxes are income tax, sales tax, excise tax, service tax (applicable for specified services), customs duty, octroi (on entry of certain goods from particular borders), stamp duty and property taxes. But the foreign companies, but the foreign companies determined to set up their factories on the Indian soil are treated leniently by the Indian government and charged only 40% plus surcharge under the double taxation avoidance agreements (DTAA). It has also made India a compatible destination for the foreign commercial companies attracting them to utilize legal protection and business assistance.

As the Indian government provides a protective legal cover to the domestic companies in India by patenting their products and allotting them a few special logos or trademarks under a Trade Fair Practice, it provides the same legal protection to the foreign companies as well under the copyrights and intellectual properties(IP) act. 

Foreign companies planning to choose India as a destination India in order to set up their business on its soil can hire highly skilled and efficient labors at a much lower rate, which internationally is not possible for them to afford. Indian government provides efficient professionals as well to the foreign companies directing them follow legal norms, while fixing their salary. Indian government  doesn’t allow its efficient professionals and efficient workers to be exploited by any one and so has made it a mandatory under the legally for the foreign companies offer perks, dearness allowance, insurance and gratuity to the Indian workers. Timely disbursement of salary, working hours and leaves to granted come under legal process. Any violation of legal protective norm can punish the foreign company.