Setting up an Indian subsidiary or similar for a UK company?

[Stupeo]

We have a need to setup an Indian subsidiary that would ideally be owned by our UK entity.

Has anyone done this before?

I am not even sure where to start.

Thanks,
Matt

[StevieBee]

Stupeo said:

We have a need to setup an Indian subsidiary that would ideally be owned by our UK entity.

Has anyone done this before?

I am not even sure where to start.

Thanks,
Matt

First off, you need to connect with your local Department of International Trade rep. They will be invaluable in helping you connect with the right people in India and the local trade teams in the regional British Consulates. They may also be able to access some funding support to ease the process financially.

Start here

If you're based in the East England, I'll introduce you to my rep who's excellent.

Some of the services they provide they charge for but is money very well spent - and much cheaper than sourcing the same through direct commercial routes.

Keep an eye out for any Trade Missions for your sector being arranged. DfIT organises these as well as third party organisers such as British Expertise. http://www.britishexpertise.org Trade Missions are normally very well run and is good to head out there with like-minded Brits.

Unless the rules have changed recently, no foreign company can own a majority stake in an Indian company. So you'd need a local partner with a 51% stake in the local business. There are workarounds to this but do be careful.

India is a fast developing country but the development is not the same in all parts. One region can be very different to another in many aspects; wealth, view of the British, levels of corruption. You need a really good 'local' to navigate all this. Again, DIT can help.

If you're making stuff here to sell there, import duties are very high. Indian made stuff is much cheaper, even if it's a foreign 'brand'. I was last there three years ago and picked up a couple of pairs of Levis jeans for £20 a pop - including in-store tailoring to fit!

Learn the culture and customs. This can be very different to the UK. If you set a time to meet someone at 10am, don't expect them to be there at 10am and understand that this is not a problem to them, even if it is for you. Emails can often go unanswered for many days, sometimes weeks. Faxes are still common tools of communications. Invoices and official documents have to have a company stamp on them....

They all have family or mates living here. So don't hide behind distance and piss them off - you'll have Sanjay and his mates on your door in no time!

But, fundamentally, I've always found India an easy(ish) place to trade. There is great empathy to the British and there is a strange but understandable 'familiarity' with things there.

So, get stuck into the DfIT website and go from there.

HTH

Good luck.

[Stupeo]

Thanks Stevie - this is very useful.

I'll report back hopefully in a few weeks with an update.

Matt

[skwdenyer]

One other thing to watch is repatriation of profits / charges / interest / etc. The rules can get complex.

Many companies choose to set up an Indian branch of their overseas business. Is there a particular reason you need to incorporate there?

[anonymous-user]

I set up a few companies overseas for a big UK contractor, including one in India, the advice on the trade dept etc depends what you want to do, manufacture to export, sell in country, etc we were doing in country construction, Embassy basically doesn't want to know unless you are exporting goods from the UK.
I can recommend PWC their office in Bangalore did everything for us, regarding set up and then kept us in line with local laws when we operated.

[StevieBee]

Berw said:

Embassy basically doesn't want to know unless you are exporting goods from the UK.

Perhaps in the past. We export expertise and services and the support we've had from DiT and formally, UK Trade and Investment has been truly excellent.

Added to which they are shifting more towards service exports rather than hard goods.

Now the caveat to that is that if a company has the means to appoint the likes of PWC for international support, then to be honest, you're probably beyond the scope of DiT's services anyway and have little need for their services. But for smaller companies, I've found their support very good.

Added to which is the funding support they offer to new market entrants.