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 ceiling. 

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 organization(s).

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 passport. 

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.