Foreign Companies can set up their operations in India by forming a strategic alliance with one or more Indian partner. There are no separate laws for setting up joint ventures in India. The companies incorporated in India, even with up to 100% foreign equity, are given the same treatment as the domestic companies.
A typical joint venture is where:
Two parties incorporate a company in India and subscribe to the shares of the joint venture company in agreed proportion, in cash, and start a new business.
A new company is formed and business of one party is transferred to the new company and as consideration for such transfer, shares are issued by the company and subscribed by that party. The other party subscribes for the shares in cash.
Promoter shareholder of an existing Indian company and a third party, who/which may be individual/company, collaborate to jointly carry on the business of that company and its shares are taken by the said third party through payment in cash.
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