Alternative Business Structure of Doing Business in India By Foreign Company

Abstract

Most of the Multinational companies, seeking entry into the Asian markets, intended to expand their business in whole world. They can choose different business structure based on their business requirement and hosting country’s rules and regulations. Apart from establishing a subsidiary, there are other alternatives available and various scholars propose different theories consisting of different criteria such as liability, taxation, control, investment needs, and legal obligations. The author mainly focuses on the legal compliances, Foreign direct investment (FDI) policies and taxation applicable on different structures available in India. Further, paper helps in understanding advantages and disadvantages of establishing branch office, Subsidiary or Limited liability partnership. It is undisputed fact that India’s overall rank in ease of doing business improved significantly but still India’s rank in certain criteria which are related to legal frameworks is unsatisfactory and below average hence there is need of change in rules and regulations. This paper contains a brief comparative analysis of the regulations applicable on business in India and the top performing countries. Further, the paper analyses the recent reforms introduced by the government and highlights the areas where improvements are still required. There should be relaxation in legal compliances imposed on foreign businesses.