Growing interest in doing business in India has seen a rise in
the number of foreigners traveling to India. Indian laws do not
place restrictions on the number of foreign nationals that can work
or do business in India, but regulate their entry, stay and
movement in India. One should understand that the structure
of the entity that wishes to employ a foreign national and the
structure of the business entity are important when applying for
business or employment visas. This article describes a few
methods by which a foreign national can commence business or work
in India along with an overview of appropriate visas.
The Foreign Exchange Management Act (FEMA) and relevant
government regulations control Foreign Direct Investments (FDI)
subject to a few restrictions. FDI up to 100% is freely
allowed in almost all the sectors in India except where the
existing and notified sectoral policy does not permit FDI beyond a
The most common methods used by foreign nationals to set up a
business in India include establishing a representative office,
project office, branch office, incorporation of a wholly owned
subsidiary or establishing joint ventures.
A liaison office is generally used to explore and understand the
business environment and opportunities in India for a foreign
parent entity. It cannot undertake any commercial activities.
Foreign companies planning to execute specific projects in India
can set up temporary project or a site office in India. Foreign
entities engaged in manufacturing and trading activities abroad are
allowed to set up branch offices for most purposes, including
export and import of goods, rendering consulting services,
conducting research among, many others.
A wholly owned subsidiary or a joint venture can be incorporated
as a company under the Companies Act, 1956. A company can be
private or public. A private company can commence business the
moment it is registered with the Registrar of Companies (ROC).
However, a public company requires a certificate of commencement of
business from the ROC.
Overview of Indian Business and Employment Visas
The Foreigner's Act, 1946, The Registration of Foreigners
Act, 1939 and The Citizenship Act, 1955, together with allied rules
and periodic amendments regulate the foreigner's entry,
movement and stay in India. Most foreign nationals entering
India require a valid passport along with an appropriate visa.
Business Visa: An individual seeking to travel
to India on business should obtain a Business Visa. The
validity of a business visa can range from 6 months to 10
years. Individuals who seek to establish a business in India
may be eligible for a business visa, which is usually issued with a
longer validity period (a long term visa). A business visa
application should include supporting documents from the sponsoring
Employment Visa: Generally, foreign nationals
with high levels of professional skills and qualifications are
granted visas to take up employment in India. The duration of
the employment visa would depend on the period of employment
contract and the validity of the applicant's
There is no prior petition or labor application. There is
no restriction on the duration an individual can stay in India on a
Business or Employment visa as long as the stay is in keeping with
the visa that was issued initially. The visa needs to be
extended from time to time.
Foreign nationals of certain countries may be subject to
additional checks or restrictions pertaining to a visit or stay in
India. Spouse and children of a foreign national applying for
an employment visa or a long term business visa are usually issued
entry visas that are co-terminus with the principal applicant's
visa. It should be noted that most foreign nationals are
required to register with the Foreigners Regional Registration
Office (FRRO) within a stipulated period after arrival into India
or if they intend to reside in India for more than 180 days.
Visas, once granted cannot generally be changed.
As the number of foreign investments into India increase the
demand for the Indian visas is on the rise. Going forward it
might be necessary to impose some restrictions on the number of
foreign nationals working in India to ensure that the local work
force is not disadvantaged. However, it is unlikely that a
developing country like India that is still dependant on Foreign
Direct Investment for its growth and requires skills that are not
available in India to sustain that growth will impose numeric
restrictions on the visas in the near future.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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