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“ We advise and support companies in a global environment “

“ We advise and support companies in a global environment “. DOING BUSINESS IN INDIA. CULTURAL DIVERSITY DEMOGRAPHIC PROFILE POLITICAL PROFILE

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“ We advise and support companies in a global environment “

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  1. “ We advise and support companies in a global environment “

  2. DOING BUSINESS IN INDIA CULTURAL DIVERSITY DEMOGRAPHIC PROFILE POLITICAL PROFILE INDIA´S ECONOMIC REVOLUTION FOREIGN DIRECT INVESTMENT ENTRY OPTIONS IN INDIA TAX SYSTEM IN INDIA INDIA´S LONG AUTOMOBILE TRADITION INDIA´S GROWING VEHICLE MARKET

  3. CULTURAL DIVERSITY Religion Hinduism, Islam, and Christianity are thefourmainreligionsfollowed in India, otherreligionsfollowed are Buddism, Jainism and Judaism. Language Hindi istheofficialLanguage of India, apartfrom Hindi there are 21 officiallanguages, such as, Bengali, Telengu, Marati, Gujarati, Malyalam etc. Festivals Depawali,Holy,Gurun, Nanak,Jatanti, Christmas, Id ul.

  4. DEMOGRAPHIC PROFILE • Population 1.2 billion (urban: 30%, rural: 70%). • Population growth rate 1,312% per annum. • Birth rate 20.6 (births/1,000 population). • Death rate 7.43 (deaths/1,000 population). • Life expectancy 67,14 years. • Sex ratio 940 females per 1,000 males. • India has a young population with approximately 65% in the age group of 15 to 64 years. The median age in the country is around 26,2 years, which is lower than many countries in the world.

  5. POLITICAL PROFILE India is a secular state and the largest democracy in the world with a parliamentary form of government. The Government of India officially known as Union Government of India was established by the constitution of India in 1950. The Government of India is divided into three distinct but interrelated branches the Legislative, Executive and Judiciary.

  6. INDIA´S ECONOMIC REVOLUTION India initially based its economy around a combination of capitalist and socialist economic models. On the one hand, the government promoted industrialization, while on the other it maintained strict control over industries. A former USSR model of five year plans was also implemented. Each plan focused on the development of key sectors. Until 1990, India had made few significant achievements with the exception of the Green Revolution, which made it self-sufficient in food grain production. By 1990, India was burdened with mounting debt, poor economic development, and average long-term indicators. All this was to change with the liberalization ushered in during 1991. In the Year 1991 under the prime Minister V NarasimhaRao the government implemented economic reforms to liberalize the economy, since then India has become an open door economy to the world.

  7. FOREIGN DIRECT INVESTMENT • Foreign Direct Investment (FDI) regime has been progressively revised during the course of 1990s and it continues in the 2000s, with most restrictions in the foreign investment removed and the procedures being simplified, and now foreigners can make direct investments with limited exceptions.Today there are very few industries where investment is prohibited, moreover the investment ceilings which are available in certain cases are being taken out / phased out.With the objective of promoting foreign direct investments through a simple, transparent, and less regulatory policy framework, the Government of India has implemented the following measures: • No government approval is required for FDI in all the sectors and activities which are in the Automatic Route, except for a negative list formulated by the Government of India. • Foreign Investment Promotion Board considers proposals that are not qualify for the Automatic Route.

  8. ENTRY OPTIONS INDIA • Liaison office • Branch office • Project office • Local Indiansubsidiary (whollyowned) • LimitedLiabilityPartnership

  9. ENTRY OPTIONS INDIA A foreign company can commence operations in India by incorporating a company under the Companies Act, 1956 through a: • Liaison office • Foreigncompanies are allowedto open a liaison office in India, toundertake liaison activitiesontheirbehalfbutsubjectedto a Specialpermissionfromthe Reserve Bank of India. Theseoffices act as a channel of communication between the principal place of business or head office and entities in India. Liaison office is granted permission for the following purposes: • 1.  Representing the parent company/group companies in India.2. Promoting export/import from/to India.3. Promoting Technical/ financial collaborations between parent group companies • and companies in India.4. Acting as a communication channel between the parent company. Liaison office is not allowed to do any business activity in India and cannot • earn money in India, expenses to such office have to be met entirely through • inward foreign remittance of foreign exchange from offices outside India.

  10. ENTRY OPTIONS INDIA • A foreign company can open a branch office in India to do business there, this requires specific approval from the RBI (Reserve Bank of India).A Branch office is permitted by the RBI to represent the Parent / group companies and undertake the following activities: • 1.Export / import of goods. • 2. Rendering professional or consultancy services. • 3. Carrying out research work in which the parent company is engaged. • 4. Promoting technical or financial collaboration between Indian companies and the parent or overseas group companies. • 5. Representing the parent company in India and acting as a buying / selling agent in the country. • 6. Providing IT services and developing software in India. • 7. Rendering Technical support for the products supplied by parent/ group companies. • Branch office is not allowed to carry out retail trading and manufacturing except manufacturing within SEZ ( Special Economic Zones). Branch office

  11. ENTRY OPTIONS INDIA Project office • A foreign corporation that has secured a contract from an Indian company to execute a project in India without obtaining prior permission of the RBI provided: • The project is funded directly by invade remittance from abroad. • The project is funded by a bilateral or multilateral financial agency. • The project has been cleared by an appropriate authority. • A company or entity in India awarding the contract has been granted a term loan by a public financial institution or a bank for a project. • However if criteria are not met, the foreign entity has to approach the RBI or central office for approval.

  12. ENTRY OPTIONS INDIA Local Indiansubsidiary Foreign Corporation can set up wholly owned subsidiary companies in India in the form of private companies, subject to prescribed guidelines. Further foreign corporations can set up a Joint Venture company with an Indian or Foreign partner. Foreign Direct Investment in such companies, set up in India is permitted through Automatic Route and do not require prior approval from the Government of India or the RBI, When the activities do not come through the Automatic Route, a prior approval of the RBI and the Government of India is required. As compared to branch/liaison and project office, a subsidiary company provides maximum flexibility to conduct business in India. A company can be funded through a mix of equity, debt, both foreign and local/internal accruals

  13. ENTRY OPTIONS INDIA LimitedLiabilityPartnership LLP aims to provide the benefits of a limited liability company, and at the same time, to allow its members to achieve the flexibility of organizing their internal management on the basis of mutual agreement. LLP is a legal entity, the liability of its partners is limited to their agreed contribution to the LLP. 100% Foreign Direct Investment is permitted in LLP with prior approval of foreign investment promotion Board in sectors were 100% FDI is allowed under the Automatic Route. However, institutional investors / foreign venture capital investors are not permitted to invest in LLP. Capital contribution made by partners in a LLP should only be in the form of cash, furthermore, LLPs are not permitted to avail external commercial borrowings.

  14. TAX SYSTEM IN INDIA India has a well developed tax structure and both the Central and the State Government levy Taxes. The Indian Tax Year extends from 1st April of a year to 31st March of the subsequent year. All companies registered in India also applied the same dates, all the Indian companies are required to file their income tax retunes by 30th of September of every year, even in the event of loss or no gains. Every corporate tax liabilities need to be estimated and discharged in four installments, 15th June, 15th Sep, 15th December & 15th March. Corporate Tax- Direct Tax Domestic companies : 30% + Educational taxes 3% + surcharges 5% depending on limits of income. Foreign Companies : 40 % + Educational taxes 3%+ surcharges 2% depending on limits of income.

  15. INDIAN´S LONG AUTOMOBILE TRADITION 1901 First Indian to own a car in India: Mr. Jamsetii Tata, founder of Tata Group. 2009 Launch of Tata Nano, the world’s cheapest car, a breakthrough in automobile history.

  16. INDIAN´S GROWING VEHICLE MARKET • World’s 2nd largest two-wheeler market. • 6thlargest Passenger Cars producer. • 4th largest in Heavy Trucks. • 2nd largest tractor manufacturer. • Annual production of vehicles of all types • around 20 million. • The monthly sales of passenger cars in India • exceed 120,000 units.

  17. DOING BUSINESS IN SPAIN OVERVIEW WhychoosingSpain ? LEGAL MATTERS: Creating a company Creating a branch CommercialAgreements Other legal matters GLOBAL RANKING ON THE EASE OF DOING BUSINESS

  18. OVERVIEW “We advise and support companies in a global environment”

  19. WHY CHOOSING SPAIN? “We advise and support companies in a global environment” • INTERNATIONAL BUSINES HUB • Strategicgeographiclocation,exceptional for key markets in • Southern Europe and Latin America. • More than 10.300 foreign companies are already established in • Spain,75 of which are Forbes Top 100 multinationals. • Access to 1,3 billionconsumers. • Apart from its domestic market, Spain offers a privileged situation • a gateway to the European market, Latin America and North Africa.

  20. WHY CHOOSING SPAIN? • ULTRAMODERN TRANSPORTATION INFRASTRUCTURE • Airports • Spain has two of ten Europe's largest airports, Madrid and Barcelona. 250 airlinesoperate in our country at 47 airports. • Spain ranks 3rd in Europe in passenger traffic. • Ports • 46 Atlantic and Mediterranean ports, making Spain 4th in maritime transport of goods. • Roads • Spain boasts the number one network of freeways and divided highways in Europe. • ‡ Rail Network • 19 Spanish provinces and 27 cities are connected directly to the Spanish highspeed rail network. • In 2020 Spain will have the largest high-speed rail network in Europe (10,000 km). “We advise and support companies in a global environment”

  21. WHY CHOOSING SPAIN? • ATRACTIVE ECONOMY • 12th largest economy in the world and 5th in the EU and ranks 7th in direct FDI (Foreign Direct Investment) received. • 7th-ranked exporter of business services. • Spain offers investment opportunities in sectors and activities with significant added value with high technological value and a significant level of R&D&I: the environment and water treatment, biotechnology and health sciences, aeronautics and aerospace, and renewable • energies • Favorable Tax Treatment for channeling investments: • ETVE (Special System for Entities Holding Foreign Securities) for channeling investments towards Central and South America. • 80 Double Taxation Agreement which allows an excellent Tax • planning strategy. “We advise and support companies in a global environment”

  22. WHY CHOOSING SPAIN? • ATRACTIVE LIFESTYLE • Barcelona and Madrid are among Europe's top 10 business cities for expatriates, according to the European City Monitor 2011 report prepared by Cushman & Wakefield. • Best health care system: modern and excellent quality. • Rich history and cultural heritage. • Unique and internationally famous cuisine. • 8,000 km (4,970 miles) of coastline and lovely beaches, with an excellent climate. • Three Spanish business schools (IE, IESE and ESADE) appear among the top 20 in the ranking by the Financial Times: Global MBA ranking 2011. • 52,7 M of international tourists arrivals in 2010. “We advise and support companies in a global environment”

  23. GLOBAL RANKING Where economies stand in the global ranking on the ease of doing business: “We advise and support companies in a global environment” Globally, Spain stands at 136 in the ranking of 185 economies

  24. CREATING A COMPANY Summary of procedures for starting a business in Spain, the time and cost.

  25. CREATING A COMPANY STOCK COMPANIES • The most usual Spanish commercial structures are the Stock Company or Sociedad Anónima(SA) and the Limited Liability Company or Sociedad de ResponsabilidadLimitada (SL). • The main characteristics of Stock Companies are the following: • Share capital: The minimum capital required to incorporate a Stock Company is Euros 60.000,00 and at least 25% of it must be paid up at the start. The capital is divided into negotiable shares, which can be either bearer or nominative. • Transfer of Shares: Shares are freely transferable, but should the founders wish to establish certain limitations for the transmission of the shares, they must then be of a nominative type and such restrictions must be expressly established in the company’s By-Laws. • Contributions in kind: If contributions in kind need to be made at the incorporation or in subsequent capital increases, a stock company will need a special report drawn up by an independent expert appointed by the Commercial Registry. • Management of the Company: The Company can be managed by a Board of Directors, a Sole Director, two Joint Directors or by two or more joint and several Directors.

  26. CREATING A COMPANY LIMITED LIABILITY COMPANIES • Limited Liability companies are intended for business which wish to benefit from limited liability and simpler and more flexible legal formalities and documentation requirements. The main characteristics of this type of companies are the following: • Capital: The minimum capital of a Limited Liability Company is Euros 3,000.00, which must be fully paid in at the date of incorporation and it is divided into “participations”, which cannot be represented by negotiable shares. • Transfer of Participations: The main difference with the Stock Companies is that the transfer of these participations is more restricted, and the existing members have a pre-emptive acquisition right. • Contributions in kind: If contributions in kind need to be made at the incorporation or in subsequent capital increases, the report of an independent expert appointed by the Commercial Registry will not be necessary. • Management of the Company: Like in the Stock Company, the Company can be managed by a Board of Directors, a Sole Director, two Joint Directors or by two or more joint and several Directors. START UP COMPANIES A big boost for innovative and high tech with fast -growing companies. Not special Spanish legislation applicable.

  27. CREATING A BRANCH Branch of a foreign corporation • A branch is an establishment that forms part of the business. It does not have its own separate legal personality or share capital. Businesses which establish a branch will be liable with their own assets for the branch’s obligations and responsibilities. Branches can engage in business activities on behalf of the business to which they belong and normally enjoy management independence. • To set up a branch in Spain, a public deed must be signed and registered at the Commercial Registry. It is also necessary to deposit the share capital in a bank account, and apply for a tax number. The branch must have a legal representative with authority to manage its affairs. It does not have any formal managing or administrative bodies as such, and it largely operates as if it were a company in its commercial dealings with third parties. • The main requirements for granting the deed are: a certificate that proves the existence of the parent company, issued by the institution in charge with company registration of the respective country; a copy of the Memorandum of Association of the foreign company with a sworn translation into Spanish; and certified of the Minutes with the decisions of the parent company about the creation of the branch and the appointment of Directors.

  28. COMMERCIAL AGREEMENTS • AGENCY AGREEMENTS • Definition: By means of an agency agreement, a natural o legal person called an agent binds himself before another person in a continuous or stable manner and in exchange for a remuneration to promote commercial acts or transaction for the other´s account, ans an idependent intermediary, without assuming, unless otherwise agreed, the risk of such transactions. • It differs from the mercantile commission agreement in the fact that the agency agreement gives rise to a long lasting relationship between the parties, while the mercantile entails a mandate whereby a person agrees to perform a trade act or trasaction for another´s account. • It is not a mediation contract either since the mediator acts in a sporadic and impartial way, trying to bring the parties together in the conclusion of an agreement but without representing any of the parties. • It differs from a distribution agreement because this one contracts with third parties for his own account and assumes in all cases the risk inherent to the resale of the products acquired. • It is not an employment contract since the agent is independent.

  29. COMMERCIAL AGREEMENTS AGENCY AGREEMENTS (I) • Basic aspects of commercialAgencyAgreements • Scope of application. From a material point of view, theLaw 12/1992 appliesonlytomercantileagencyagreements. However, certainagreementswhichwould, in principle, begovernedbythesaidLaw, escape in wholeor in partfromthescope of application of thesame.There are in Spainspecificregulationsrelatingtodeterminedcategories of agentwhich are applied, withprioritycharacterwithrespecttothe general system set forth in theLaw 12/1992, as: • Insuranceagents • Creditentitiesagents • AdvertisingAgents • Ship´sagents • From a temporal point of view, theLaw 12/1992 ispresentlyappliedtoallthe • mercantileagencyagreements, whetherthesamehavebeenenteredinto prior • tooraftertheentryintoforce of theLaw 12/1992.

  30. COMMERCIAL AGREEMENTS AGENCY AGREEMENTS (II) ComparisionSpanishLaw 12/1992 and EuropeanDirective 86/653/EEC Both of themaimtoprotectthesupposedlyweakerpartytothemercantileagencyagrement: theagent(thevalidity of thepostulateuponwhichboththe ED and theSpanishLaw are based are questionablesincethere are a greatnumber of exampleswheretheagentisnot in a position of inferioritywithtrespecttothe principal), and itisforthisreasonthatthe LAW 12/1992 sets forhtthatitsprovisionshaveanimperativecharacterunlessexpresslyotherwhiseprovidedbytheissue. TheEuropeanDirective, contrarytotheSpanishLaw, doesnotestablishthe general imperativeness of itsprovisionsbutonlysome of themexpresslystatetheirimperativecharacter. Impact of CompetitionLawonAgencyAgreementsaftertheentryintoforce of the EC Treaty of categories of Vertical AgreementsRegulationandconcertedpractice (1st January 200)and in particular itsArticle 81(1). If Law12/1992 expresslycontenplates and permitsanycovenantwhichwouldrestrictcompetition., butdoesnotimposethesame, thenSpanishcompetitionlawdoesnotseemapplicalbebut Art. 81(1( of the EC Treatyiftheagreementiscapable of affectingtradebetweenMemberStates.

  31. COMMERCIAL AGREEMENTS • DISTRIBUTION AGREEMENTS (I) • Thedistributorhipagreementistheagreementwherebyanentrepreneur (called distributor),agrees, on a a regular ancontinuousmanner, toacquire in hisownname and underhisownrisk, theproducts of anotherentrepreneur (calledsupplier), forthepurposes of resellingthem in a giventerritoryand itsmainfeatures are: • Itisanatypicalagreement, sinceit has no sepcificlegislation. • Itisanadhesionagreement, totheextentthatveryfrequentlycontracformsorpatternspreparedbythesupplier are used. • Itis a contractinvolvingdurationsinceitentails a performance over a period of time, eitherfixedorunlimited. • Itis a consensual agreementwhichisconsummatedbytheconsent of theparties. • Itisanagreement “intuituspersonae”, sinceitisbasedon mutual trust betweentheparties. • Itisanagreementwherethereisaneconomicdependence of one of theparties (distributor).

  32. COMMERCIAL AGREEMENTS DISTRIBUTION AGREEMENTS (II) The legal systemapplicabletodistributorshipagreementsismade up of threecategories of regulations: • The general regulationsoncontracts, contained in the Civil Code and in theCommercialCode. 2. Spanish and Europeancommunity rules oncompetition (application of Article 81(3) of the EC Treatytocategories of vertical agreements and concertedpractices, whichistobeappliedwhenassessingthecompatibility of distributionagreementswithSpanishcompetition rules). 3. Finally, itshouldbetakenintoaccountthatSpainis a partytotheViennaconvention of 1980 onthe International Sale of Goods, and thereforetheprovisionscontained in saidconventionmay, as the case maybe, applytodistributorshipagreementssubjecttotheSpanishLaws.

  33. COMMERCIAL AGREEMENTS JOINT VENTURES • Joint Ventures are quite common in commercial practice in Spain. Although they are not specifically foreseen in commercial Spanish laws, they are in practice executed according to Spanish general rules applicable to contracts. • Sometimes the Joint Ventures are created by means of a Temporary Business Association (Unión Temporal de Empresas: UTE) which allows several companies to operate together in one common project for a limited period of time. The UTE has not legal entity. This form of association is usual in engineering and construction projects.

  34. OTHER LEGAL MATTERS Foreign companies and/or individuals in Spain • Tax Identification Number (N.I.F.) and Foreign Identity Number (N.I.E.) • The applicable Spanish legislation currently requires that any individual or legal entity with economic or professional interests in Spain, or involved in a relevant way for tax purposes, must hold a Tax Identification Number (NIF) in the case of legal entities or a Foreign Identity Number (NIE) for individuals. For example they must be obtained in order to set up a company or a branch, and therefore foreign shareholders and directors of Spanish companies must have NIF or NIE. • NIF is issued free of charge and NIE at a small cost. • Regarding the procedure for obtaining the NIF, a specific form must be filed with the competent Spanish tax authorities, along with certain documentation, and a number is automatically assigned. • NIE can be obtained in Spain, at the Police Station, or abroad, at Spanish diplomatic missions or consular offices. • Foreign individuals and companies can be appointed as Directors of Spanish companies.

  35. Manythanks!!!!!!

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