2008 Update to Guide to Establishing a Subsidiary in India


Although the current dollar-rupee exchange rate is causing more consideration of other locations, many businesses in the U.S. continue to move a portion of their development, support and other operations offshore to India, primarily for cost-saving reasons. Venture capital investors may require such outsourcing in order to reduce a company’s burn rate. While a U.S. company may initially contract for services with a third party in India, many companies establish their operations in India through incorporation of a subsidiary, a private limited company under the India Companies Act of 1956, as amended (the “Companies Act”). This memorandum summarizes certain of the legal and administrative issues that a U.S. company (the “U.S. company”) should consider in establishing an Indian subsidiary.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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