Legal Question in Business Law in India

Starting Up a Business in India as a Foreigner


I would like to get some information on starting up a textile company in India as a foreigner.

Any advise will be highly appreciated.

Thank you.

Asked on 7/05/04, 4:14 pm

5 Answers from Attorneys

Mohit Suri Mlegal: The International law firm in India

Re: Starting Up a Business in India as a Foreigner

For Starting a Textile business in India you will Have to do the following:

1) Permissions: Seek permisson from FIPB (recommended but not necessary for textile sector.) and permission from the RBI

2) Form of Company: Select the form of the company which will carry on the business.

3) Registration:Register the company with Income Tax department(PAN , TAN etc.) and other departments like excise, sales tax etc.

4)Immigration: Get a work permit from Home Affairs office in Delhi and register at FRRO.

These are only a few things that must be kept in mind. Selecting the Geographical Location will impact the formalities and the benefits given by the government.

I further advise you to wait till the 8th of July when the Indian Budget is presented. A clearer view of the FDI policy of the new government, labour policy etc. need to be kept in mind before I ask you to jump in.

If you need any further help feel free to contact our firm. We will help you achieve your goals.

Mohit Suri

[email protected]

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Answered on 7/06/04, 4:01 am

Srinivas Kotni Corporate Lexport

Re: Starting Up a Business in India as a Foreigner

The advice in regard to opening of a textile company in India will largely depend upon the kind of business being contemplated (eg. whether manufacturing company,trading company, buying house etc.) Further it will also depend upon the kind of structure which is being planned (eg. liaison office, branch office, private limited company, public limited company, etc.). The quantum of proposed investment will also have a bearing on the issue.

As regards Government approval (By the Foreign Investment Promotion Board) textile industry is categorised under automatic route. Thus no permission of FIPB is required. The company can be straight away incorporated after making the required documentation and following the set procedures and complying with the relevant laws.

India has a very encouraging foreign direct investment policy and foreigners are encouraged to invest in various sectors (textile being one of them). The Company can be incorporated either as a subsidiary of your existing foreign company or as a independent company with shares being held by foreigners.

Hope the above gives a broad picture on the query.

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Answered on 7/06/04, 9:12 am
Vishwa Arya Arya & Co.

Re: Starting Up a Business in India as a Foreigner

For Starting a Textile business in India one needs to do as under-

a. Decide the constitution e.g. Proprietor, Partnership, Company with Limited Liability, Joint Venture with an Indian Firm.

b. In Case of a Proprietor: Open a bank account after permission from Reserve Bank of India. Any bank may assist for opening such account. Once account is opened firm comes into existence and the business related formalities would follow like registration with Reserve Bank as an Importer / Exporter / Manufacturer or Buying House

c. For Partnership: Register your firm with registrar of firms along with the partnership deed.

d. For Companies: Register with Registrar of Companies at place where you want the registered office of the company. This involves handling by a professional may be a Chartered Accountant or an Attorney

e. If Proprietor: one needs a work permit for Ministry of Home Affairs through Foreign Residents Registration Office in New Delhi

f. If one wants to be an exporter one needs to register with Apparel Export Promotion Council under Ministry of Textiles

g. Laws and rules of the state of India in which you want to start the business will also have to be kept in mind.

h. Central Government of India announces every year the new policy for Foreign Investment / Business in India. The said policy is about to be announced in July 2004.

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Answered on 7/06/04, 1:38 pm
Rohini Kumar Tenneti R.K.1080 LEGAL SERVICES

Re: Starting Up a Business in India as a Foreigner


u can straightaway away start ur business after obtaining a clearance from the external affairs department and other local governments for various other licences.whereas if you intend to make a tie up business with any indian u don't require such obligations.more u can send mail as rk1080 at rediffmail dot com.

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Answered on 7/06/04, 2:49 am

Re: Starting Up a Business in India as a Foreigner

Dear Sir,

Thanks for sending this query to us.

We would like to introduce as a full Service Law Firm having offices in Allahabad, Ahmedabad, Banglore, Delhi, Hyderabad, Mumbai and Pune having dedicated department for providing services to those firms who either want to set up business in India or those Indian Companies who want to set up offices overseas.

With this brief introduction point wise reply to your query is as under:


A foreign company planning to set up business operations in India has the following options :


Joint Ventures; or

Wholly Owned Subsidiaries


Foreign Companies can set up their operations in India through

Liaison Office/Representative Office

Project Office

Branch Office

In addition to General outlook of setting up business by a foreigner, we would like to provide you broad information's about Textile sector as follows:

The Textile is one of the thrust area of Govt.of India policy towards attracting Foreign direct Investment. The Govt. is already in process of setting up specialized Apparel parks for Exports and the targeted revenue out of Export is USD 50 Billion.

Textile exports is fourth largest revenue earner in Indian economy and is a well-developed Industry in India. The support industry ranging from Textile machinery to small equipments is also well developed. There are several foreign companies operating in Textile as well as support industry. Further there are possibilities of acquiring running companies and entering into joint ventures

From December 2004, under WTO agreement quota restrictions from exporting textile items from India would go, thereafter boom time is expected in India in this sector. The Govt. policies are very liberalized and friendly.

Our Services:

please write us e-mail at [email protected]

to get details of our services.

This is to inform you that one of our Lawyer has over 8 years of experience only in Textile and Garment industry and he has worked with some of the top houses and has been instrumental in setting up Units across Asian sub continental in this area.

Currently he is going to Singapore from 7th July and will be available at our office from 12th July 2004 onwards. His personal E-mail id is [email protected]

Hope this clarify your preliminary enquiries.

We would be pleased to answer any of your query, provide you details and do all statutory, legal and regulatory works including approvals from Govt., take over of existing units and entering in to joint ventures with Indian players upon receipt of further details from you.

Thanks & Regards

For M.V.KINI & CO.


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Answered on 7/06/04, 3:10 am

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