India Practically Ravi Kini

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

FDI is not permitted in:
Atomic energy
Lotteries, Gambling and Betting
Retail Trading (other than Single Brand Retail)
Policy and
Procedures

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

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

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

(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

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%

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%

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

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)

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

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

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

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

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

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

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India Practically Ravi Kini

by BLBA BLBA on Mar 24, 2010

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India Practically Ravi Kini — Presentation Transcript