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& Partners

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eneral LPC &

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ights Reserved

IND

EXStep

１R

eviewofBusinessPlan

1.W

hatbusinessdoyou

wantto

doin

India

2.C

hoiceofm

odeofbusiness(C

ompany,B

ranchO

ffice,LiaisonO

fficeetc.)

Step２

Review

ofFDIPolicy

1.W

hetherFDIpolicy

restricts/regulatesforeigninvestm

entinyourbusinesssector,ornot

2.G

overnmentR

outeand

Autom

aticR

oute

Step３

Com

panyIncorporation

1.W

hataJapanese

company

shouldpay

attentionto

incom

panyincorporation

2.Processofcom

panyincorporation

3.Share

Capital&

Authorized

ShareC

apital

4.Shareholdersand

ShareholdersMeeting

5.B

oardofD

irectorsandD

irectors,

6.A

uditorandC

ompany

Secretary

7.E-governance

1

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ights Reserved

１R

eview of Business Plan

Flowchart for m

odes of Entry into India

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eneral LPC &

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ights Reserved

１R


１.W

hattypeofB

usinessdo

youw

anttodo

inIndia?

¾A

tfirst,

thebusiness

planshould

befixed,

becauseit

dependson

typeof

business;•

Whetherthe

businesscanbe

carriedoutin

India?

•W

hichisthe

bestmode

ofbusiness(i.e.Com

pany,BO

,LO,orPO

)?•

How

many

percentagesof

sharesin

acom

panyyou

wantto

invest?(like

Jointventure,Equity

ownership

?)

3

BO

–B

ranch Office

LO –

Liaison office

PO

–P

roject Office

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ights Reserved

１R


２.C

hoiceofm

odeofB

usiness¾

Thefollow

ing4

typesofm

odeofbusiness

youcan

choosem

ainly;�

Com

pany–

Com

panycan

bePublic

orPrivate

limited

(Same

askabushiki

Gaisha

inJapan)

�Branch

Office

(BO)

�Liaison

Office

(LO)

�LO

means

aplace

ofbusiness

toact

asa

channelof

comm

unicationbetw

eenthe

Principalplaceof

businessor

Head

Office

byw

hatevernam

ecalled

andentities

inIndia

butw

hichdoes

notundertake

anycom

mercial

/trading/industrial

activity,directly

orindirectly,

andm

aintainsitself

outof

inward

remittances

receivedfrom

abroadthrough

normalbanking

channel;�

ProjectOffice(PO

)�

POm

eansa

placeofbusiness

torepresentthe

interestsofthe

foreigncom

panyexecuting

aprojectin

Indiabutexcludesa

LiaisonO

ffice

4

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ights Reserved

１R


２.C

hoiceofm

odeofB

usinessA

pprovalsRequired

RBI-R

eserveBank

ofIndia

1.A

pprovalfrom

RB

I(through

AD

Bank)

isrequired

forN

on-residentfor

openingB

O,LO

,orPO.

Governm

entApproval

1.D

ependingon

theFD

IPolicy,G

overnment

approvalm

ayalso

berequired

firstbyN

on-R

esident.

5

AD –

Authorized Dealer

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ights Reserved

１R


２.C

hoiceofm

odeofB

usiness¾

Permitted

activitiesfor

BOin

Indiaof

aperson

residentoutside

India;•

Export/Importofgoods;

•R

enderingprofessionalorconsultancy

services;•

Carrying

outresearchw

ork,inw

hichthe

parentcompany

isengaged;•

Promoting

technicalor

financialcollaborations

between

Indiancom

paniesand

parentor

overseasgroupcom

pany;•

Representing

theparentcom

panyin

Indiaand

actingasbuying/selling

agentinIndia;

•R

enderingservicesin

Information

Technologyand

developmentofsoftw

arein

India;•

Rendering

technicalsupporttothe

productssuppliedby

parent/groupcom

panies;•

Foreignairline/shipping

company.

Pleasenotethatthefollow

ingactivitiesare

notallowed;

•R

etailtradingactivitiesofany

nature.•

Manufacturing

orprocessingactivities,directly

orindirectly.

6

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ights Reserved

１R


２.C

hoiceofm

odeofB

usiness¾

Permitted

activitiesforLO

inIndia

ofaperson

residentoutsideIndia;

•actas

achannelofcom

munication

between

theprincipalplace

ofbusiness

orheadoffice

andentitiesin

India.•

cannotundertakeanycom

mercialactivity

directlyorindirectly

•collecting

information

aboutpossiblem

arketopportunities•

providinginform

ationaboutthe

company

anditsproductsto

Indiancustom

ers•

promoteexport/im

portfrom/to

India•

facilitatetechnical/financialcollaboration

between

parentcompany

andcom

paniesinIndia.

¾Perm

ittedactivitiesfor

POin

Indiaofa

personresidentoutside

India;•

executespecificprojectsinIndia

cansetup

temporary

project/siteoffices.

•C

arryoutrelating

andincidentalforthe

project.•

ProjectOfficesm

ayrem

itoutsideIndia

thesurplusofthe

projectonitscom

pletion

7

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eneral LPC &

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ights Reserved

１R


２.C

hoiceofm

odeofB

usiness¾

Differencesbetw

eencom

pany,BO,PO

,andLO

8

Com

panyBO

POLO

Business

No R

estriction(D

ependingon

FDI Policy)

Pleasesee the

previous slideC

onstruction,Infrastructure etc.

Pleasesee the

previous slide

Funding•

Capital

infusionby

aholdingcom

pany•

FreeR

eserves

•R

emittance

byH

Q•

FreeR

eserves

•R

emittance

byH

Q•

FreeR

eserves

•R

emittance

byH

Q

Income Tax

30.90%-34.61%

41.20% -43.26%

41.20% -43.26%

N/A

Mercury

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eneral LPC &

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ights Reserved

２R

eview of FD

I Policy１.

Whether

FDI

policyrestricts/regulates

foreigninvestm

entin

yourbusinesssector,ornot

¾FD

IPolicy•

IndianG

overnment

issuespress

notefrom

time

totim

e,and

allof

which

areconsolidated

andupdated

everyyear.

Thelatest

oneis

Consolidated

FDI

Policy,2016

(datedJune

7,2016);•

FDI

Policyshall

bereview

edin

advanceso

thatyou

canunderstand

whether

yourbusinesssectorin

Indiaisopen

toforeign

investorsornot.

9

FDI –

Foreign Direct Investm

ent

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ights Reserved

２R

eview of FD

I Policy１.

Whether

FDI

policyrestricts/regulates

foreigninvestm

entin

yourbusinesssector,ornot

¾C

aseStudy

9O

neofthe

conditionsIn

respectof

proposalsinvolving

foreigninvestm

entbeyond

51%,sourcing

of30%

ofthe

valueof

goodspurchased,

will

bedone

fromIndia,

preferablyfrom

MSM

Es,village

andcottage

industries,artisansandcraftsm

en,inallsectors.

•M

UJI(R

yohinK

eikaku)setupJV

company

with

anIndian

Retailerto

openits

shopsin

India.•

MU

JIholds51%

oftheshares

inJV

company,This

maybe

thereason

why

MU

JIdidn’tset

upits

wholly-ow

nedsubsidiary

andseem

sto

bethat

itw

antsto

avoidthe

saidcondition.

10

Sector / Activity

%of Equity/

FDI C

apEntry R

oute

Single Brand product retail trading

100%•

Autom

atic up to 49%•

Governm

ent route beyond49%

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eneral LPC &

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ights Reserved

２R

eview of FD

I Policy２.

Governm

entRoute

&A

utomaticR

oute¾

EntryR

oute•

Thereare

two

kindsofentryroute,one

isgovernmentroute

andanotherisautom

aticrote

11

Governm

entRoute

Priorapprovalof

theG

overnmentof

Indiais

required.Proposals

forforeign

investment

underG

overnment

route,areconsidered

byFIPB

.

Autom

aticRoute

Thenon-resident

investordoes

notrequire

anyapprovalfrom

Governm

entofIndiaforthe

investment

FIPB –Foreign Investm

ent Promotion Board

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eneral LPC &

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ights Reserved

３C

ompany Incorporation

１.W

hata

Japanesecom

panyshould

payattention

toin

company

incorporation¾

Wholly-ow

nedsubsidiary

VS

JVcom

pany

12

Merit

Dem

erit

Wholly-ow

nedsubsidiary

•M

anagement

controlonly

byholding

company

•Easierto

exit•

Protectionof

technology,know

-how

,andIPR

•H

ugecosts

andtim

eto

startup

andexpand

thebusiness

•R

estrictionofbusiness

underFD

Ipolicy

JV com

pany•

Easierto

startup

andexpand

thebusiness

•Less

Risk

andFast

expansionof

business

•D

ifficultto

finda

goodJV

partner•

Managem

entcontrol

alongw

itha

JVcom

pany

Mercury

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& Partners

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eneral LPC &

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ights Reserved

３C


２.ProcessofC

ompany

Incorporation¾

Main

3steps

1.D

SCand

DIN

•Proposed

subscribersto

theM

OA

andA

OA

andproposed

firstdirectorsshallobtain

DSC

(Digital

SignatureC

ertificate)and/orDIN

(DirectorIdentification

Num

ber),which

shallbedescribed

inthe

relatedform

sforcom

panyincorporation

2.C

ompany

Nam

eA

pproval•

Before

applicationforcom

panyincorporation,com

panynam

eapprovalshallbe

required.

2.C

ompany

Incorporation•

Application

forcom

panyincorporation

shallbe

made

within

60days

fromthe

aforesaidnam

eapproval.

�R

ecentUpdate

•To

make

company

incorporationeasier,the

Govt.India

amended

theprocedures.Forexam

ple,PAN

andTA

Nofthe

proposedC

ompany

willnow

mandatorily

beapplied

inthe

incorporationForm

,andobtained

atthe

same

time

ofgetting

Certificate

ofIncorporation.

(Inthe

past,PA

Nand

TAN

applicationcould

bem

adeonly

afterincorporationofcom

pany.)

13

Mercury

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& Partners

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eneral LPC &

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ights Reserved

３C


３.Share

Capital&

Authorized

ShareCapital

¾ShareC

apital•

Recently,

therequirem

entsof

them

inimum

capitalrequirem

entfor

theprivate

Com

panyas

well

aspublic

Com

panyhave

beenom

itted.

¾A

uthorizedShareC

apital•

Theauthorized

sharecapitalofa

company

isthe

maxim

umam

ountofsharecapitalthatthe

company

isauthorised

byitsM

OA

toissue

toshareholders.

•The

amountofthe

authorizedshare

capitalshouldbe

decidedcarefully

sincethe

statutoryfee

tobe

paidin

company

incorporationdepends

onthe

amountof

theauthorized

sharecapital(m

oream

ountofthe

authorizedshare

capital,more

statutoryfee.)

14

Before amendm

entA

fter amendm

ent

Private Com

panyN

ot less than INR

100,000/-N

/A

Public Com

panyN

otless than INR

500,000/-N

/A

Mercury

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& Partners

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eneral LPC &

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ights Reserved

３C


４.Shareholdersand

ShareholdersMeeting

¾The

Num

berofShareholders

15

Private Com

pany2 (Tw

o) ore more but up to 200 (Tw

oH

undred) persons

Public Com

pany7 (Seven) or m

orepersons

Mercury

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eneral LPC &

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ights Reserved

３C


４.Shareholdersand

ShareholdersMeeting

¾ShareholdersM

eeting

16

Notice for

Meeting

•N

otlessthanclear21

(Twenty-onedays)’notice

eitherinw

ritingorthrough

electronicm

ode.•

How

ever,ageneralm

eetingcan

becalled

aftergivinga

shorternoticeifconsentis

givenin

writing

orby

electronicm

odeby

notlessthanninety-five

percent.ofthem

embers

entitledto

voteatsuch

meeting.

Quorum

(Minim

um

person)

Unlessthe

AO

Aprovidesfora

largernumber

•PrivateC

ompany:2

(Two)m

embers

•Public

Com

pany:(a)5(five)m

embers

incase

ofthecom

panyhaving

notmore

than1,000

mem

bers,(b)15

(fifteen)mem

bersin

caseofthe

company

havingm

orethan

1,000butup

to5,000

mem

bers,and(c)30

(thirty)mem

bersin

caseofthe

company

havingm

orethan

5,000m

embers.

Voting

Aresolution

shallbedecided

ona

showofhands(one

votingrightperm

ember).

9Therefore,it

isvery

important

tospecified

inthe

AO

Aw

ithrespect

toa

poll(one

votingright

pershare).

Resolution

•O

rdinaryR

esolution:Majority

oftheshareholderspresent

•SpecialR

esolution:Notlessthan

75%ofthe

shareholderspresent

Place•

AG

M:A

ttheregistered

officeofthe

company

oratsome

otherplacew

ithinthe

city,town

orvillagein

which

theregistered

officeofthe

company

issituated•

EGM

:InIndia

AG

M –

Annual G

eneral Meeting

EGM

–Extra-ordinary G

eneral Meeting

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eneral LPC &

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ights Reserved

３C


５.Board

ofDirectors&

Director

¾Board

ofDirectors

17

Num

ber•

PrivateCom

pany:notlessthan2

(two)butup

to15

(fifteen)directors•

PublicCom

pany:notlessthan3

(three)butupto

15(fifteen)directors

Providedthat

acom

panym

ayappoint

more

thanfifteen

directorsafter

passinga

specialresolution.

Notice

•N

otlessthan7days’notice

inw

ritingby

electronicm

ode.•

Providedthata

Meeting

oftheB

oardofD

irectorsm

aybe

calledatshorternotice

totransact

urgentbusinesssubjectto

thecondition

thatatleastoneindependentdirector,ifany,shallbe

presentatthem

eeting.

Quorum

(M

inimum

Person)

Onethird

ofitstotalstrengthortw

odirectors,w

hicheverishigher

Resolution

Majority

ofthedirectorspresent

PlaceA

nywhere

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eneral LPC &

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ights Reserved

３C


５.Board

ofDirectors&

Director

¾D

irectortobe

appointedin

acertain

classofcompanies

Thefollow

ingclassofcom

paniesshallappointthe

following

typesofdirector.

18

TypeN

umber

Requirem

ents

Wom

an D

irectorA

t least1 (one)

1)Every

listedcom

pany;2)

everyotherpublic

company

having–

•paid–up

sharecapitalofone

hundredcrore

rupeesormore;or

•turnoverofthree

hundredcrore

rupeesormore

IndependentD

irectorN

ot less than one-

third

Everylisted

company

At least

2 (two)

•The

PublicC

ompanieshaving

paidup

sharecapitaloften

crorerupeesorm

ore;or•

ThePublic

Com

panieshavingturnoverofone

hundredcrore

rupeesormore;or

•The

PublicC

ompanies

which

have,in

aggregate,outstanding

loans,debentures

anddeposits,exceeding

fiftycrore

rupees:

Resident

Director

At least

1 (one)Every

Com

panyshallhave

atleastonedirector

who

hasstayed

inIndia

fora

totalperiod

ofnot

lessthan

onehundred

andeighty-tw

odays

inthe

previouscalendar

year.

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eneral LPC &

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ights Reserved

３C


６.A

uditor&

Com

panySecretary

¾A

uditor•

TheBoardofD

irectorsin30

daysofIncorporationshallappointtheFirstA

uditorofthecompany.

•Every

company

shall,atthefirstannualgeneralm

eeting,appointanindividualora

firmas

anauditorw

hoshall

holdoffice

fromthe

conclusionof

thatm

eetingtill

theconclusion

ofits

sixthannual

generalm

eetingand

thereaftertilltheconclusion

ofeverysixth

meeting.

•A

uditorshallbeaqualified

charteredaccountantsorchartered

accountantsfirm.

¾C

ompany

Secretary•

Everylisted

company

andevery

otherpublic

company

havinga

paid-upshare

capitaloften

crorerupees

orm

oreshallhave

whole-tim

ew

hole-time

company

secretary.•

Acom

panyotherthan

acom

panycovered

abovew

hichhas

apaid

upshare

capitaloffivecrore

rupeesorm

oreshallhave

aw

hole-time

company

secretary.Foreg.any

Privateor

Publiccom

panyw

hichhave

paidup

capitalabove5

Cr).

19

Mercury

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& Partners

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eneral LPC &

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ights Reserved

３C


7.E-Governance

E-bizm

issionw

illtransforme-governance

beyondonline

transactionsto

deliveringservices

toinvestors

andbusinessespecially

foreign.

¾Single-w

indowclearancefor

BusinessandInvestorsin

processingrequests.

¾O

neintegratedapplication

formform

ultiplelicenses

¾Singleconsolidated

paymentforvariouslicenses

¾R

eductionin

number

ofprocedures,costandtim

eto

obtainapproval.

¾24

X7

facilityforInform

ationand

Services.

¾O

fferscoverageofEntirebusinesslife-cycle.

¾Itisaim

edto

towardseaseofbusinessin

India.

Mercury

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& Partners

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eneral LPC &

Partners All R

ights Reserved

当法人概要

弁護士法人マーキュリー・ジェネラル

Mercury G

eneral LPC &

Partners

東京事務所：東京都千代田区富士見

1-6-1 フジビュータワー飯田橋

903TEL

：03-5215-8875FA

X：03-5215-8876

WEBサイト：http://w

ww

.mercury-law

.com/

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