India Practically   Ravi Kini
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India Practically Ravi Kini

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India Practically   Ravi Kini India Practically Ravi Kini Presentation Transcript

  • INVESTING
    IN
    INDIA
    Head Office
    Bilquees Mansion, 261/263, D.N Road,
    Fort , Mumbai – 400 001, Maharashtra
    India
    Branch Office
    Kini House
    6/39, Jungpura B
    New Delhi -110 014
    He
    Ravi Kini
    Managing Attorney
    M V Kini & Co. Advocates & Solicitors
    March 23, 2010
    New Delhi
  • Investing in India – Table of Contents
    Table of Contents
    Foreign Direct Investment- Policy and Procedures
    Entry options for foreign Investors
    Foreign Transfer Technology
    Mergers and Acquisitions
    Intellectual Property
    Registration and Visa requirements
    Courts and Litigations
    Alternate Dispute Resolution
  • Investing In India - Foreign Investment
    • FDI permitted in almost all sectors
    • Foreign Investors have option to invest either
    directly or through joint venture
    • Few investment caps (being progressively lifted)
    • Investment Opportunities in sectors as diverse
    as tourism and infrastructure, petrochemicals,
    mining technology and engineering, real estate,
    biotechnology.
    Policy and
    Procedures
  • Investing In India - Foreign Investment
    FDI is not permitted in:
    • Atomic energy
    • Lotteries, Gambling and Betting
    • Retail Trading (other than Single Brand Retail)
    Policy and
    Procedures
  • Investing In India - Foreign Investment
    Two FDI routes:
    Automatic Route
    Under this route foreign investors are only required to notify the Regional office concerned of the Reserve Bank of India within 30 days of receipt of the inward remittances
    Policy and
    Procedures
  • Investing In India - Foreign Investment
    FIPB Route (Approval Route)
    • Applies to all projects that do not qualify for
    automatic approval
    • Prior FIPB approval is required
    • FIPB decision is normally issued within 30 days
    • Foreign investment is decided on a case-to-case
    basis on merit and based on the prescribed
    sectoral policy
    Policy and
    Procedures
  • Investing In India - Foreign Investment
    Automatic Route
    • Agro Based Industry -100%
    • Automotive Industry-100%
    • Business Services – 100%
    • Civil Aviation sector
    Airports
    Greenfield projects- 100%
    Existing projects- 74%
    Policy and
    Procedures -
    Sectoral Limits regarding FDI
  • Investing In India - Foreign Investment
    (b) Air Transport Services
    Scheduled Air Transport service- 49%
    Non- Scheduled Air Transport service- 74%
    (iii) Helicopter/ Sea-plane services- 100%
    (iv) Ground Handling Services- 74%
    (v) Maintenance and Repair organizations, Flying and training Institutes & Technical Training Institutes- 100%
    • Communications Sector- 100% (film production)
    • Construction- 100%
    • Energy generation except Atomic Energy- 100%
    Policy and
    Procedures
    Policy and
    Procedures
  • Investing In India - Foreign Investment
    Policy and
    Procedures
    • Food and Beverage- 100%
    • Health and Medical Services- 100%
    • Hotels and Tourism Sector- 100%
    • Logistics- 100%
    • Manufacturing Lubricants- 100%
    • Petrochemical Sector- 100%
    • Research and development Services- 100%
    • Steel/iron sector- 100%
    • Shipping Sector-100%
  • Investing In India - Foreign Investment
    Policy and
    Procedures
    Approval route
    • Broadcasting Sector
    (i) Terrestrial Broadcasting FM- 20%
    Cable Network- 49%
    Direct to Home- 20%
    Setting up hardware facilities- 49%
    • Cigars and Cigarettes Manufacture- 100%
    • Courier Services- 100%
    • Defense- 26%
  • Investing In India - Foreign Investment
    Joint Venture Company
    Foreign Investors can set up operations in India through strategic alliances with Indian partners. A joint venture is preferred route for foreign investors intending to invest in any sector that does not permit 100% FDI
    Wholly Owned Subsidiary
    Foreign Investors can set up a wholly-owned subsidiary in India in the form of a private limited company in sectors where 100% FDI is permitted
    Entry Options for Foreign Investors
  • Investing In India - Foreign Investment
    Entry Options for Foreign Investors
    Branch Office
    A Branch Office is an extended arm of the foreign company. Prior Reserve Bank of India approval is necessary to set it up. It can undertake:
    • export/import, consultancy, research and
    development of software
    • coordinate with local buyers and sellers or
    provide technical support for products sold
    in India and conduct operations related to
    airline/shipping business
    • It is not allowed to undertake manufacturing
    activities (except research work in which the
    parent company is engaged)
  • Investing In India - Foreign Investment
    Entry Routes in India
    Liaison Office
    Role limited to collecting market information. As name suggests not allowed to undertake business activity other than liaison activities. Cannot earn income in India
    Project Office
    For overseas companies planning to execute specific projects in India. Reserve Bank of India conditions apply. Just a report to Reserve Bank of India on particulars of the project/contract is required
  • Investing In India - Foreign Investment
    Foreign Technology Transfer
    Foreign technology encouraged (both through FDI/foreign technology collaboration agreements). No approvals required in respect of foreign technology agreements that involve:
    • a lump sum payment of up to USD 2 million
    • royalty payable up to 5% of net domestic sales
    and 8% of exports
    • Indian Companies may issue equity shares
    toward lump sum fee and royalty
    Foreign Technology Transfer
  • Investing In India – Business Regulation
    In India Mergers and Acquisitions of the entities are governed by the provisions of the Companies Act, 1956. The power to approve amalgamations, mergers and de-mergers rests with the State High Courts of India for all companies
    Mergers and Acquisitions can take place in the following ways:
    The first option is Demerger under Section 391-394 of the Companies Act. This is a classic route, which requires Court Orders to complete the process
    The second option is by way of a slump-sale by way of an asset purchase.
    Slump sale is defined under Section 2(42C) of the
    Income Tax Act 1961 as the transfer of one or more
    business undertakings as a result of the sale for a
    lump-sum consideration without values being
    assigned to individual assets and liabilities in such
    sales
    MERGERS AND ACQUISITIONS
  • Investing In India – Business Regulation
    SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (“SEBI Takeover Regulation”)
    • An individual may acquire a substantial quantity
    of shares or voting rights of a target company by
    way of an agreement either formal or informal
    • An acquirer can acquire upto 5% or 10% or 14% of
    the shares of a listed company subject to making a
    disclosure at every stage that is at 5% or 10% or
    14% to the company and stock exchange applicable
    within 2 days of acquisition or receipt of
    intimation of allotment of shares
    • Where the acquisition of stake goes beyond 15%
    then the acquirer can make further acquisition
    only after he makes a public announcement of the
    same
    MERGERS AND ACQUISITIONS - SEBI
  • Investing In India – Business Regulation
    The Intellectual Property in India is well recognized at all levels statutory, administrative and judicial. India is a member of World Intellectual Property Organization (WIPO) which is a specialized agency of the United Nations and it is body dedicated to develop an international Intellectual property system.
    Intellectual Property in India deals with patent, copyright, trademark, geographical indications, designs etc.
    India is a signatory to the following important conventions:
    TRIPS agreement
    Paris Convention
    Budapest Convention
    India obliges and recognizes national treatment to all other member nations and thus supports international trade and commerce
    INTELLECTUAL PROPERTY
  • Investing In India – Registration and Visa Requirements
    Registration and Visa Requirements
    If the period of engagement of a foreign national is up to 6 months, such national is required to hold a valid visa such as inter alia, employment and business. If the period exceeds 6 months, the foreign national should hold a valid employment visa. Business visas may be issued for up to five years, with a multiple-entry provision
    Foreign nationals are required to register themselves with the concerned “Foreigners' Registration Officer” within two weeks of their first arrival in India, if they hold a visa for a period of more than 180 days. This registration is required irrespective of whether or not they intend to stay in India for less or more than 180 days
    REGISTRATION AND VISA
  • Investing In India – Registration and Visa Requirements
    REGISTRATION AND VISA
    Visas may be extended or renewed within India. Expatriate staff would require an employment visa before they are hired in India. The employment visa is issued to skilled and qualified professionals or persons who are engaged or appointed by inter alia, companies and organizations as technicians, technical experts, senior executives etc. Expatriate staff further requires submitting the proof of contract or employment or engagement with the Indian company for the issue of an employment visa by the Indian Embassy at their current place of residence.
  • Investing In India – Dispute Resolutions
    Supreme Court
    The Supreme Court exercises original appellate and advisory jurisdiction. Its exclusive original jurisdiction extends to all disputes between the Government of India and one or more States or between two or more States. Under its advisory jurisdiction, the President of India is entitled to consult the Supreme Court on any question of fact or law of public importance.
    High Courts
    There are 21 High Courts in India at present. High Courts have powers of superintendence over all courts within their jurisdiction. Certain High Courts have original in addition to appellate jurisdiction.
    COURTS AND LITIGATIONS
  • Investing In India – Dispute Resolutions
    The Arbitration and Conciliation Act, 1996 (“Arbitration Act”)
    The Arbitration Act is based on the UNCITRAL Model Law of International Commercial Arbitration. It encompasses both domestic and international commercial arbitration and gives freedom to the arbitrating parties in case of trans-border contracts to choose the venue as well as the rules governing their arbitration. It further accords due recognition to mediation and conciliation
    The Arbitration Act contains elaborate provisions on the composition and jurisdiction of arbitral tribunals and the conduct of arbitral proceedings. Under its provisions, an arbitration agreement must evince an agreement to refer the dispute to arbitration. Further, the Arbitration Act incorporates the principle of finality of the arbitral award as in UNCITRAL and ICC and accords arbitral awards final and binding status qua parties
    ALTERNATE DISPUTE RESOLUTION
  • Investing In India – Dispute Resolutions
    Under the Arbitration Act, interference of the courts in matters connected with inter alia, the conduct of arbitration, decision of the arbitrator and the awards has been minimized. Courts are empowered however, to order interim measures of protection including inter alia, securing the amount in dispute, detention, preservation or inspection of property and the appointment of receivers
    ALTERNATE DISPUTE RESOLUTION
  • Thank you