India Practically Ravi Kini


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India Practically Ravi Kini

  1. 1. INVESTING <br />IN <br />INDIA<br />Head Office <br />Bilquees Mansion, 261/263, D.N Road,<br />Fort , Mumbai – 400 001, Maharashtra<br />India<br />Branch Office<br />Kini House<br />6/39, Jungpura B<br />New Delhi -110 014 <br />He<br />Ravi Kini<br />Managing Attorney<br />M V Kini & Co. Advocates & Solicitors<br />March 23, 2010<br />New Delhi<br />
  2. 2. Investing in India – Table of Contents<br />Table of Contents <br />Foreign Direct Investment- Policy and Procedures <br />Entry options for foreign Investors <br />Foreign Transfer Technology<br />Mergers and Acquisitions<br />Intellectual Property <br />Registration and Visa requirements<br />Courts and Litigations<br />Alternate Dispute Resolution<br />
  3. 3. Investing In India - Foreign Investment <br /><ul><li> FDI permitted in almost all sectors
  4. 4. Foreign Investors have option to invest either </li></ul> directly or through joint venture<br /><ul><li> Few investment caps (being progressively lifted)
  5. 5. Investment Opportunities in sectors as diverse </li></ul> as tourism and infrastructure, petrochemicals,<br /> mining technology and engineering, real estate, <br /> biotechnology.<br />Policy and<br />Procedures<br />
  6. 6. Investing In India - Foreign Investment<br />FDI is not permitted in: <br /><ul><li> Atomic energy
  7. 7. Lotteries, Gambling and Betting
  8. 8. Retail Trading (other than Single Brand Retail)</li></ul>Policy and<br />Procedures<br />
  9. 9. Investing In India - Foreign Investment<br />Two FDI routes:<br />Automatic Route <br />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 <br />Policy and<br />Procedures<br />
  10. 10. Investing In India - Foreign Investment<br />FIPB Route (Approval Route)<br /><ul><li> Applies to all projects that do not qualify for</li></ul> automatic approval<br /><ul><li> Prior FIPB approval is required
  11. 11. FIPB decision is normally issued within 30 days
  12. 12. Foreign investment is decided on a case-to-case</li></ul> basis on merit and based on the prescribed<br />sectoral policy<br />Policy and<br />Procedures<br />
  13. 13. Investing In India - Foreign Investment<br />Automatic Route<br /><ul><li> Agro Based Industry -100%
  14. 14. Automotive Industry-100%
  15. 15. Business Services – 100%
  16. 16. Civil Aviation sector </li></ul>Airports<br />Greenfield projects- 100% <br />Existing projects- 74% <br />Policy and<br />Procedures - <br />Sectoral Limits regarding FDI<br />
  17. 17. Investing In India - Foreign Investment<br />(b) Air Transport Services<br />Scheduled Air Transport service- 49% <br />Non- Scheduled Air Transport service- 74% <br />(iii) Helicopter/ Sea-plane services- 100% <br />(iv) Ground Handling Services- 74% <br /> (v) Maintenance and Repair organizations, Flying and training Institutes & Technical Training Institutes- 100% <br /><ul><li>Communications Sector- 100% (film production)
  18. 18. Construction- 100%
  19. 19. Energy generation except Atomic Energy- 100%</li></ul>Policy and<br />Procedures<br />Policy and<br />Procedures<br />
  20. 20. Investing In India - Foreign Investment<br />Policy and<br />Procedures<br /><ul><li> Food and Beverage- 100%
  21. 21. Health and Medical Services- 100%
  22. 22. Hotels and Tourism Sector- 100%
  23. 23. Logistics- 100%
  24. 24. Manufacturing Lubricants- 100%
  25. 25. Petrochemical Sector- 100%
  26. 26. Research and development Services- 100%
  27. 27. Steel/iron sector- 100%
  28. 28. Shipping Sector-100% </li></li></ul><li>Investing In India - Foreign Investment<br />Policy and<br />Procedures<br />Approval route <br /><ul><li>Broadcasting Sector </li></ul>(i) Terrestrial Broadcasting FM- 20% <br /> Cable Network- 49% <br /> Direct to Home- 20% <br /> Setting up hardware facilities- 49% <br /><ul><li>Cigars and Cigarettes Manufacture- 100%
  29. 29. Courier Services- 100%
  30. 30. Defense- 26% </li></li></ul><li>Investing In India - Foreign Investment<br />Joint Venture Company<br />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<br />Wholly Owned Subsidiary<br />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<br />Entry Options for Foreign Investors<br />
  31. 31. Investing In India - Foreign Investment<br />Entry Options for Foreign Investors<br />Branch Office<br />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:<br /><ul><li> export/import, consultancy, research and</li></ul> development of software<br /><ul><li> coordinate with local buyers and sellers or </li></ul> provide technical support for products sold <br /> in India and conduct operations related to<br /> airline/shipping business<br /><ul><li> It is not allowed to undertake manufacturing</li></ul> activities (except research work in which the<br /> parent company is engaged)<br />
  32. 32. Investing In India - Foreign Investment<br />Entry Routes in India<br />Liaison Office<br />Role limited to collecting market information. As name suggests not allowed to undertake business activity other than liaison activities. Cannot earn income in India<br />Project Office<br />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<br />
  33. 33. Investing In India - Foreign Investment<br />Foreign Technology Transfer<br />Foreign technology encouraged (both through FDI/foreign technology collaboration agreements). No approvals required in respect of foreign technology agreements that involve:<br /><ul><li> a lump sum payment of up to USD 2 million
  34. 34. royalty payable up to 5% of net domestic sales </li></ul> and 8% of exports<br /><ul><li> Indian Companies may issue equity shares </li></ul> toward lump sum fee and royalty <br />Foreign Technology Transfer<br />
  35. 35. Investing In India – Business Regulation<br />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<br />Mergers and Acquisitions can take place in the following ways:<br />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<br />The second option is by way of a slump-sale by way of an asset purchase.<br />Slump sale is defined under Section 2(42C) of the <br />Income Tax Act 1961 as the transfer of one or more <br />business undertakings as a result of the sale for a <br />lump-sum consideration without values being <br />assigned to individual assets and liabilities in such <br />sales<br />MERGERS AND ACQUISITIONS<br />
  36. 36. Investing In India – Business Regulation<br />SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (“SEBI Takeover Regulation”)<br /><ul><li> An individual may acquire a substantial quantity </li></ul> of shares or voting rights of a target company by <br /> way of an agreement either formal or informal<br /><ul><li> An acquirer can acquire upto 5% or 10% or 14% of </li></ul> the shares of a listed company subject to making a <br /> disclosure at every stage that is at 5% or 10% or <br /> 14% to the company and stock exchange applicable <br /> within 2 days of acquisition or receipt of <br /> intimation of allotment of shares<br /><ul><li> Where the acquisition of stake goes beyond 15% </li></ul> then the acquirer can make further acquisition <br /> only after he makes a public announcement of the <br /> same<br />MERGERS AND ACQUISITIONS - SEBI<br />
  37. 37. Investing In India – Business Regulation<br />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. <br />Intellectual Property in India deals with patent, copyright, trademark, geographical indications, designs etc. <br />India is a signatory to the following important conventions: <br />TRIPS agreement <br />Paris Convention<br />Budapest Convention <br />India obliges and recognizes national treatment to all other member nations and thus supports international trade and commerce<br />INTELLECTUAL PROPERTY<br />
  38. 38. Investing In India – Registration and Visa Requirements<br />Registration and Visa Requirements<br />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<br />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<br />REGISTRATION AND VISA<br />
  39. 39. Investing In India – Registration and Visa Requirements<br />REGISTRATION AND VISA<br />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.<br />
  40. 40. Investing In India – Dispute Resolutions<br />Supreme Court<br />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.<br />High Courts<br />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. <br />COURTS AND LITIGATIONS<br />
  41. 41. Investing In India – Dispute Resolutions<br />The Arbitration and Conciliation Act, 1996 (“Arbitration Act”)<br />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<br />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<br />ALTERNATE DISPUTE RESOLUTION<br />
  42. 42. Investing In India – Dispute Resolutions<br />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<br />ALTERNATE DISPUTE RESOLUTION<br />
  43. 43. Thank you<br />
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