Setting up a Joint Venture Company in India

A Foreign Company can choose to opt for the Joint Venture route in India if it becomes necessary due to compulsion of taking on an Indian partner.  It could also be necessary to opt for the Joint Venture route wherein technology and financial contribution comes in from an Indian company or the foreign investor decides to utilize the already established distribution or marketing network of the Indian partner.

If all the partners of a Joint Venture are foreign companies without any Indian participation (in financial or technical terms), the venture will be cleared through the automatic approval route

In the case of a Joint Venture, the foreign investment part of the joint venture is approved either through the automatic approval route (if the business areas fall under the automatic approval route) or through prior approval from the Foreign Investment Promotion Board (FIPB).

A Foreign Company must compulsorily take the Joint Venture route in all those sectors where 100% FDI is not permitted. For e.g. Insurance, Banking, Aviation etc. See Sectoral Cap for more information.

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