Destination India - A Legal Synopsis

ign="center">intimation of receipt of foreign investment, letters
DESTINATION INDIAof acceptance, intimation of issue of securities,
A LEGAL SYNOPSISannual tax, accounts and returns, etc.
By:In addition, specific industries need to file periodic
Alishan Naqveereports with the administrative ministry and
LexCounsel, Law Offices, New Delhidepartments, such as quarterly and annual returns
E-mail: CONTENTSby software technology parks or special economic
1. Introductionzones with the concerned officials.
2. Entry Strategy3.4 Incorporation, Registrations and Licenses
2.1 Legal EntityIncorporation of a company in India is an
2.2 Options for Collaborationadministrative process which takes approximately
3. Regulatory Permissions and Compliances15 to 20 working days from filing of incorporation
3.1 Financial Collaborationrelated documents. A company incorporated
3.2 Technology Collaboration & Trademarkanywhere in India is entitled to carry on business
Licenseactivities throughout India.
3.3 Post Collaboration CompliancesIn addition, an Indian company would require
3.4 Registrations and Licensesobtaining various sector and location specific
4. Taxes and Tax Benefitslicenses and registrations, including registrations
4.1 Tax Structureand licenses under the direct and indirect taxes,
4.2 International Taxationimport-export regulations, labour laws and trade
4.3 Transfer Pricing Regulationsand municipal regulations. These licenses and
4.4 Tax Benefitsregistrations can ordinarily be obtained within four
5. Return on Investmentweeks of filing the requisite documents. The prior
5.1 Repatriation of Profitsinvestment approvals from the FIPB for
5.2 Repatriation of Fees and Royaltiesinvestment in unregulated sectors may take upto
6. IP Protectionsix weeks.
7. Human Resources and Labour IssuesSECTION FOUR
7.1 Costs4. TAXES AND TAX BENEFITS
7.2 Key Issues4.1 Tax Structure
8. Dispute ResolutionIndia has a multi tier tax system comprised of
9. Due Diligencedirect and indirect taxes. The main taxes are
SECTION ONEincome tax, sales tax/value added tax, excise
1. INTRODUCTION(levied on manufacturing/value addition), service
India, the world’s largest democracy, istax (levied on provision of specified services),
today one of the most favoured destinations ofcustoms duty, octroi (on entry of goods in certain
foreign investors and businesses for variousareas), stamp duty (on execution of specified
reasons including a rapidly growing economy,documents) and property taxes.
educated and skilled workforce, huge market size,The income tax applicable to Indian companies is
increasing purchasing power, low costs and political30% plus surcharge and cess. No minimum
stability albeit through coalition Governments.corporate income tax is payable by Indian
1.1 Geographic Locationcompanies in absence of profits. Generally all
India is bounded by the Bay of Bengal on thebusiness expenses are deductible from taxable
east, China, Nepal and Bhutan to the north-east,income. Indian companies are also required to
Pakistan and Arabian Sea on the north to westwithhold income tax from various payments and
and Indian Ocean on the south. India has adeposit it with the government.
coastline of 7,517 kilometers (4,671 miles).4.2 International Taxation
Bangladesh and Myanmar border India in the east.India has entered into double taxation avoidance
1.2 Currencyagreements (“DTAA”) with
The currency of India is Rupee (symbol "Rs."),approximately 77 countries around the world,
often referred to as Indian Rupee in internationalincluding all major countries that may have trade
transactions. As on March 1, 2009:interests with India. Generally, the provisions of
US Dollar - $ 1 was equal to Rs. 48.77DTAA prevail over the domestic tax provisions
Great Britain Pound - £ 1 was equal to Rs.and offer bilateral relief to residents in both
70.63jurisdictions in respect of foreign taxes paid.
Euro - € 1 was equal to Rs. 68.18Foreign investors can consider routing their
Japan Yen - ¥ 100 was equal to Rs. 55.06investments into India through any of the tax
1.3 India Wins Freedomheavens having beneficial DTAA with India.
India won independence on August 15, 1947 fromMost of the DTAA’s provide that, if a
the British rule under the iconic leadership offoreign company has a permanent establishment
Mahatma Gandhi and many other leaders after a(“PE”) in India, its income
long drawn freedom struggle.accruing in India would be taxable in India at the
Addressing the Indian Constituent Assemblyrate applicable to foreign companies (i.e. 40% plus
towards midnight on August 14, 1947, the firstsurcharge and cess).
Prime Minister of India, Pandit Jawahar Lal Nehru inThe Supreme Court of India has in the judgment
his speech known as "Tryst With Destiny" saiddelivered in July 2007 in the case of DIT (Mumbai)
"Long years ago we made a tryst with destiny,Vs. Morgan Stanley & Co. analyzed the possibility
and now the time comes when we shall redeemof an Indian entity being deemed a PE of its
our pledge, not wholly or in full measure, but veryforeign counterpart owing to the presence of
substantially. At the stroke of the midnight hour,employees of the foreign counterpart at the
when the world sleeps, India will awake to life andoffices of the Indian entity, and the nature of
freedom."their business operations. Accordingly, deputation
1.4 Union of Statesof employees of a foreign parent company to
With independence, India became a Union ofthe offices of the Indian subsidiary would qualify
States, as duly envisaged in its Constitution. Indiathe Indian entity as a PE of foreign parent entity
currently comprises of 29 states and 6 unionin India, unless the role of the foreign employees
territories. New Delhi is the capital, and Mumbai isis limited to stewardship activities. The Indian
commonly acknowledged as the financial capital.subsidiary would also be a PE of the foreign
Other major cities include Kolkata (West Bengal),parent entity if the business activities of the
Chennai (Tamil Nadu), Bangalore (Karnataka),Indian entity are same as the main business
Hyderabad (Andhra Pradesh), Lucknow (Uttaractivities of the foreign entity, or if the Indian arm
Pradesh) and Chandigarh (Punjab).exercises the authority to execute, enter into or
1.5 Three Pillars of Democracyconclude or implement the contracts on behalf of
India has a written constitution that clearlythe foreign arm.
envisages three institutional organs of the IndianIn view of the above determinations, the Indian
Government: (1) Legislature for enacting the laws;and the foreign arms of multinational entities are
(2) Executive for implementation of the laws, andbeing careful in avoiding the deputation structure,
(3) Judiciary to interpret laws in administration ofand prefer to transfer the subject employees on
justice. The constitutional structure provides Indiathe rolls of the Indian company.
a well balanced social, political, democratic andThough the judgment is rendered with reference
financial stability.to specific clauses of the Indo-US DTAA, since
The Legislature constitutes the Parliament, thatmost of the DTAAs that India has with other
enacts laws applicable to the whole of Indiacountries also contain provisions similar to the
(subject to exceptions that may be statedIndo-US DTAA (being based on the same model
therein), and State Legislature that enacts lawslaw), the applicability of the judgment may be
applicable to that particular state. The Primepresumed on transactions arising between Indian
Minister, being the leader of the majority partyand other foreign entities.
coalition in the Parliament, heads the council of4.3 Transfer Pricing Regulations
ministers. Similarly, the Chief Minister of each stateIndia has implemented transfer pricing regulations.
is the head of the council of ministers of thatGenerally speaking, these rules govern the
State.minimum profit margin to be maintained by the
The Executive is headed by the President of IndiaIndian companies in international transactions with
at the Centre level, and by the Governor at theassociated enterprises. Arguably, the transfer
State level. The President and the Governor act inpricing regulations legitimize provision of services
view of the advice of the council of ministers.by Indian companies to foreign parent and other
The judiciary is headed by the Chief Justice ofentities on a cost plus basis, as per the industry
the Supreme Court of India. Each High Court isnorm and avoid PE implications for the foreign
headed by a Chief Justice. Below the High Court,entity in India.
there are lower courts at the district and4.4 Tax Benefits
sub-district levels.In India, substantial direct and indirect tax benefits
1.6 Lawsexemptions for the initial few years are provided
India follows the common law system, and isto units engaged in specific business activities,
governed by a combination of central and statesuch as export oriented software and hardware
legislation, enacted by the Parliament and theunits; specified infrastructure projects; units in
State Legislature respectively. The Constitution ofbackward areas, special economic and free trade
India also prescribes the matters on which thezones.
Parliament and the State Legislature canThe export oriented software and services units
respectively or concurrently legislate.are offered exemption of customs duty on
1.7 Languagesimports, exemption of excise duty and sales tax
"Hindi" is the mother tongue. In addition, 22on domestic purchase of capital goods in addition
regional languages are currently recognized by theto exemption of octroi. Due to availability of tax
Constitution of India. Due to numerous regionalbenefits/exemptions and availability of educated
languages and countless dialects, it is common forworkforce, India has established itself as the global
Indians to be proficient in speaking more than onehub for software development and business
language and a few dialects.process outsourcing.
Though English is not the first official languageThe DTAA, transfer pricing regulations and tax
anywhere in India, the country reportedly has thebenefits provide an opportunity to the foreign
second largest English speaking population in anyinvestors to arrive at an efficient tax structuring
country in the world, after only the United Statesof investments and business in India. Foreign
of America .investors can, considering the tax rates in both
English is also the language to be used in thejurisdictions, ability of the Indian companies to
Supreme Court and the High Courts of all statesprovide services at a cost plus basis and tax
of India, and is the authoritative text of allexemption available for specific activities, decide
legislation passed by the Parliament and Statethe quantum of their investments in India.
Legislature.SECTION FIVE
1.8 Globalization5. RETURN ON INVESTMENTS
The so called "globalization" of the Indian economyForeign investors can repatriate funds out of India
commenced in 1992. The terms "free trade" andthrough a number of options including dividends,
"globalization" were notably the key words of thefees for technical and administrative services,
speech delivered by the then Finance Minister androyalties, interest, capital appreciation, etc., after
the current Prime Minister of India, Dr. Manmohanpayment of applicable taxes. Reportedly, the rate
Singh before the Assembly on December 17,of return on investments in India scores well
1992.above 15%.
Since 1992, the Government of India has gradually5.1 Repatriation of Profits
promoted foreign collaboration and relaxedIndian companies can remit their profits to a
regulations to promote foreign investment andforeign collaborator by way of dividend subject to
technology transfer in various sectors of thedividend distribution tax @ 20% plus surcharge
Indian economy. While globalizing the Indianand cess. There is no limit on the rate of dividend
economy, the Government has been careful tothat can be distributed or repatriated out of India.
protect the domestic production and business tillHowever, there are certain conditions with regard
such time they are able to compete with theto computation of profits and transfer of upto
financial might and international best practices of10% of profits of the company to its reserves
the multinational competitors. The results havebefore declaring dividend.
been clearly pronounced on the global stage, withBranch offices of foreign companies can also
India now undisputedly being counted as a globalremit business profits to their principals subject to
power with significant domestic production andwithholding tax @ 40% plus surcharge and cess
exports.(unless lower tax rate is prescribed by the
The increasing support for India to become aDTAA).
permanent member of the United Nations5.2 Repatriation of Fees and Royalties
Security Council, the Indo-U.S. Civilian NuclearThe royalty for transfer and use of technology,
Agreement, approval of the Safeguardstrademark and brand name, can be remitted to
Agreement by the International Atomic Energyforeign collaborators subject to withholding tax
Agency ("IAEA") and the waiver by the 45@10% plus surcharge and cess (unless lower tax
member Nuclear Supplier Group ("NSG") in 2008rate is prescribed by the DTAA and the royalty is
allowing India to access civilian nuclear technologyexecuted on or after June 1, 2005). If the foreign
and fuel from other countries are clear evidencescollaborator belongs to a country having DTAA
of India's recognition as global power andwith India, it can avail credit of withholding taxes
dependable ally. The waiver by the NSG makespaid in India. Research and Development Cess
India the only known country in the world that@5% is also payable by the Indian importer of
possesses non-civilian nuclear capabilities but is stilltechnology on payments towards imported
permitted to carry out nuclear commerce withtechnology.
the rest of the world without being a member of5.3 Capital Gains
the Non Proliferation Treaty.In the absence of lesser rate of tax by the
1.9 Rapid Economic GrowthDTAA, the capital gains can be repatriated out of
The Globalization has undisputedly opened doorsIndia subject to withholding tax between 10% to
for rapid economic growth of India. Despite20%, depending on their nature, plus surcharge
certain problems, including population, poverty,and cess.
corruption, and regional and religious strife thatSECTION SIX
erupt sometimes, India has demonstrated6. IP PROTECTION
remarkable economic growth in the past decade.India recognizes the value of intellectual property
For the year ended March 31, 2009, the Grossrights and has well established procedures for
Domestic Product ("GDP") is expected to beprotection of patents, trademarks, designs and
around 7%, despite global meltdown.copyrights. India is a member of the Agreement
With all its diversities, India remains an attractiveon Trade Related Aspects of Intellectual Property
destination for foreign investments, withRights ("TRIPS"), the Doha Declaration, Berne
possibilities of remarkable returns on investments.Convention on Copyrights, Geneva Convention for
With the population second only to China, India isthe Protection of Rights of Producers of
second largest marketplace in the world in termsPhonograms, the Universal Copyright Convention.
of number of consumers and offers enormousIndia is also a member to the World Intellectual
scope for success to diligent investors in almost allProperty Organization, Geneva. In view of its
sectors of the Indian economy.commitments under TRIPs, the Doha Declaration
SECTION TWOand other conventions, India has taken significant
2. ENTRY STRATEGYsteps to align its intellectual property laws to the
2.1 Legal Entityglobal standards.
A foreign entity may establish a businessThe true and first inventor of a product or
presence in India through:process can register it as a patent in India.
• opening a liaison office, branch office orTrademarks, for services and goods, and designs
project office;(industrial designs, excluding functional designs) can
• appointing a distributor or franchisee;also be registered in India by its owner. As far as
• commencing its own operations in India;copyrights are concerned, registration is not
• forming a joint venture with an Indiancompulsory. Copyrights in original literary, dramatic,
entity; ormusical and artistic works, cinematography films
• acquiring an existing business in India.and sound recordings can also be registered. The
2.1.1 A liaison office can be established to primarilyregistration of copyright is however not
explore and understand the business opportunitiescompulsory to initiate a legal action against
and climate in India for the foreign parent entity.infringement.
A liaison office is not permitted to earn anyViolation of IP rights is a punishable offence in
income in India by conducting any business orIndia. The owners of patents, trademarks, designs
commercial activities in India.and copyrights can institute appropriate legal
A branch office can carry on the businessactions against the infringer and restrain the
activities while a project office can be establishedinfringer from using the IP pending conclusion of
to execute a specific project. However, since athe legal action.
branch office or a project office would not beSECTION SEVEN
considered a legal entity separate from its parent7. HUMAN RESOURCES AND LABOUR ISSUES
company, the business income generated by7.1 Costs
them would be taxable at the rate of taxIndia arguably has the world’s largest
applicable to the foreign companies (40% pluseducated workforce available at salaries that are
surcharge and cess) which is higher than the ratestill substantially below the benchmarks of
of tax applicable to companies incorporated indeveloped economies. A statute prescribing
India (30% plus surcharge and cess).minimum wages to be paid to different classes of
A liaison or branch office can be established inemployees is in force in India. However, the
India pursuant to the requisite approval of theminimum wages prescribed under this statute are
Reserve Bank of India ("RBI"). No prior RBInot only far below the minimum wages payable
approval is however necessary for bankingto similarly qualified and skilled workers in
company that has obtained necessary approvaldeveloped economies across the world, they are
under the Banking Regulation Act, 1949, or foralso much below the salaries ordinarily paid in India
branches/units established in special economicto educated workers by reputed employers.
zones, or for project office in compliance with theIn addition to salary, certain other employee
specific conditions.benefits and contributions, such as provident fund
In view of restrictions on the activities and taxand employee state insurance are also payable by
implications for liaison, branch and project offices,the employer (together with the employees). The
establishment of a wholly owned subsidiary, oravailability of economical educated workforce
strategic alliances through joint ventures, technicalfacilitates the foreign investors to source
collaborations or distributorship arrangements withinternational quality services and products at
existing Indian companies by and large remain thecomparatively lower costs.
preferred options for foreign entities to establish aAt the same time the businesses in India are
long term presence in India.capable of paying salaries competitive to the
2.1.2 The option of appointing a distributor orglobal standard for specific and special
franchisee is often utilized by the foreign entitiesassignments. As a result India has an ever
to trade in India their products of establishedincreasing number of foreign employees in Indian
global reputation and goodwill. The products arecompanies.
exported to and/or manufactured in India by the7.2 Key Issues
franchisee under strict quality control. In case theDue to rapid industrial development and growth of
arrangement with the Indian partner is onemployment opportunities in big cities, the
exclusive basis, the Indian partner may be entitledemployers in these cities often face problems of
to best (lowest) international prices for theattrition. Foreign investors may therefore review
imported products. In addition to payment of costthe industry salary standards before employing
of products imported, the Indian distributors alsoworkforce, check the employment history of
often pay a percentage royalty to the foreignprospective employees for consistency and
entity depending on the turnover of retail sales insincerity and include adequate protection in the
India towards trademark license.employment documentation to avoid breach of
The advantages of a distributorship/franchisingconfidentiality and attrition.
arrangements to the brand name owner includeIndian labour statutes are employee friendly and
acquaintance of the franchisee with localdiscourage hire and fire practices. While the
environment; local sales and marketing expertiseemployment of manager and administration level
of the franchisee; ready availability of sales andemployees is governed by and can be terminated
marketing channels; reduced investment; sharingas per their employment contracts, employees at
of expenses; negligible government approvals; nolower levels, called “workman”,
requirement to recruit local workforce andcan be terminated only in accordance with the
consequently lower financial risk. Further, theprocedure laid down under law (unless the
regulatory restrictions on retail trading by foreigntermination as per the employment contract is
companies are a major factor for boom ofmore beneficial to the employees).
master franchising arrangements in India.Export oriented units situated at most of the
India does not have any specific legislationprominent locations in India are permitted to
governing franchising arrangements, andemploy workers in shifts, beyond the regular
consequently there is no statutory obligation onoffice hours.
the franchisors to offer disclosures to the Indian7.3 Engagement of Expatriates
franchisee.For reasons of taxation, as discussed in Section
2.1.3 Barring a few sectors, as discussed in4.2 above, deputation of employees of foreign
Section 3.1 below, foreign investors are permittedparent companies to their Indian subsidiaries is
to establish their wholly owned subsidiaries in Indiaavoided. However, citizens of any country that
to conduct business in India. These companiesIndia has friendly relationship with, may obtain
being incorporated in India, are considered residentemployment visa to work in India. Persons
in India and are thus subject to taxation at thetravelling to India on long term and employment
rate applicable to Indian residents (referred to invisas need to register themselves with the
Section 2.1.1 above) even if all their shareholdersjurisdictional Foreigners Regional Registration Office
and directors are based out of India. Subject towithin specified time (ordinarily 14 days) of arrival
sectoral investment restriction and investmentin India. Such employees would also be subject to
caps, the foreign investors also have the optiontax in India on their income earned in India, and
of acquiring any existing company in India andmay avail credit of the tax paid in India depending
establishing it as a wholly owned subsidiary.on the terms of the DTAA between their home
2.1.4 Foreign investors are also permitted tocountry and India.
establish joint ventures or collaborations with theirSECTION EIGHT
Indian partners. While the advantages of a wholly8. DISPUTE RESOLUTION
owned business are effective supervision andThe judicial structure in India consists of courts
absolute control, the advantages of joint venturesand tribunals in defined hierarchy. The apex court
are support of a local partner to understand thein India is the Supreme Court, at New Delhi. Below
business environment and rules of the game. Thethe Supreme Court, every state has its own High
options for collaboration with Indian partners areCourt and subordinate courts. The courts exercise
discussed in the following Section.jurisdiction based on their territorial, pecuniary and
2.2 Options for Collaborationstatutory limits. In addition, specific disputes, such
Foreign entities may enter into following kinds ofas consumer and tax disputes are adjudicated by
collaborations with existing Indian companies:a.specially constituted tribunals.
Financial Collaboration: Joint Ventures, byLitigation in India is usually long drawn. Further,
investment in the shares or fully convertiblejudgments of only a few foreign courts can be
instruments including debentures or preferencedirectly executed in India. Consequently, arbitration
shares (“securities”) of theand conciliation are preferred for resolution of
Indian company together with Indian partner;b.disputes in commercial transactions. A foreign
Technical Collaboration: By licensing technology orinvestor and its Indian partner can agree to
patents to the Indian partner; andc. Trademarkresolve the disputes arising between them
Brand Name License: To the Indian partner withthrough arbitration conducted in or outside India.
without technical collaboration.India is signatory to the Geneva Convention of
SECTION THREE1927 and the New York Convention of 1958. The
3. REGULATORY PERMISSIONS ANDIndian Arbitration and Conciliation Act, 1996 is
COMPLIANCESbased on Model Law on International Commercial
The Foreign Investment Promotion BoardArbitration adopted by the United Nations
(“FIPB”) and the Reserve BankCommission on International Trade Law
of India (“RBI”) are the nodal(UNCITRAL) in 1985 and governs domestic
government authorities to permit and supervisearbitration, international commercial arbitration and
foreign investments in India. In addition, Ministry ofenforcement of foreign arbitral awards as well as
Commerce and Industry and various otherlaw relating to conciliation.
ministries and departments of the governmentIndian courts however, of late, have been
prescribe sector specific regulatory compliancesencouraging the litigating parties to resolve the civil
and approvals.disputes through mediation. Few High Courts have
3.1 Financial Collaborationeven set up mediation cells where the courts
Foreign investment upto 100% of the securitiesrefer the parties to attempt amicable resolution.
of Indian companies is freely permitted in most ofThe contracting parties shall however be careful in
the sectors, except a few sectors where FDIopting for the venue of arbitration or exclusive
beyond prescribed percentages is not permittedcourt jurisdiction. "Forum inconvenience" is a
without prior government approval, such ascommon ground, in addition to "public policy" and
insurance, aviation, banking, telecom, real estate,"contravention of laws of India", that influence
etc., and a few manufacturing sectors requiringassumption of jurisdiction by the territorial courts
industrial license such as alcoholic drinks, tobaccoin India in litigation matters, as well as in matters
products, defense equipment, hazardous chemicalsrelated to enforcement of or challenge to arbitral
etc. (“regulated sectors”).awards. The Supreme Court of India has in the
Foreign investment is however prohibited incase of Venture Global Engineering Vs. Satyam
certain sectors including retail trading (exceptComputer Services Ltd. and Anr. held that not
single brand product retailing), atomic energy,only enforcement, but a foreign award itself can
lottery, gambling, trading in transferablebe challenged in India on merits.
development rights, etc.SECTION NINE
A financial collaboration in these regulated sectors9. DUE DILIGENCE
consequently requires presence of an IndianWe provide below a non-exhaustive list of viability
equity partner to hold the remaining equity.verifications that may be conducted and caution
Further, the equity may either be held with orthat may be exercised by the foreign investors
without prior government approvals from FIPB,while establishing business in India through wholly
RBI and other applicable ministries, as prescribedowned subsidiaries or collaborations:
by the regulations applicable at the time of1. Verify the financial position of and possession of
investment. The method of calculation of totalassets by the prospective partner;
foreign investment in an Indian company and2. Verify that the sector permits the proposed
associated issues have recently been clarified byinvestment and obtain requisite approvals;
the Ministry of Commerce and Industry,3. Ensure that the business understanding is well
Government of India in a series of press notes.documented and is tax efficient;
The securities of an existing unlisted Indian4. Consider PE implications in India while finalizing
company in unregulated sectors can bethe collaboration structuring;
transferred from its holders to the foreign5. Discuss in detail and decide the control and
investor without prior government approval.management issues of the Indian venture,
To meet additional financial needs, a foreignincluding shareholding structure, constitution of its
collaborator can also provide loans to the Indianboard of directors and committees;
company as per the detailed government6. Ensure inclusion of provisions concerning control
guidelines issued in this regard prescribing interestand management of the company in its articles of
rate, average maturity period, end use and priorassociation and timeline for issue of securities
approval in certain cases.after receipt of investment and procedure for
3.2 Technology Collaboration & Trademarkdissolution of the venture;
License7. Timelines in India may, sometime, due to
Under these arrangements, foreign entities canunavoidable circumstances extend beyond the
provide technical know how and/or license theirtime originally expected. The business plans should
trademarks to Indian companies against paymenttake this factor into account;
of fee and royalty.8. Take steps towards IP registration and
For use of foreign technology, Indian companiesprotection;
can remit lump sum fee of upto US$ 2 million and9. Verify employment history of the employees;
royalty upto 5% of domestic sales and 8% ofand
exports to the technology licensor without any10. Adopt alternative dispute resolution
prior government approval. Similarly, for use ofmechanisms.
trademarks and brand name of the foreignDisclaimer: This Synopsis is not intended to be and
collaborator without technology transfer, paymentshould not be construed as legal advice. While
of royalty upto 2% of exports and 1% ofadequate care and caution has been exercised by
domestic sales is allowed without priorthe author in preparing and providing this Synopsis,
government approval. In case of trademark/brandthe business requirements of different foreign
name license together with technology transfer,investors may differ and require in depth
the payment for technology transfer subsumesconsideration and resolution of crucial legal issues.
the payment of royalty for use of trademark andBefore taking any concrete business decisions,
brand name of the foreign collaborator.readers are advised to obtain specific legal advice
3.3 Post Collaboration Compliancesfrom competent counsel in their own judgment.
In regulated as well as free sectors, an IndianThe author and the firm disclaim all liability to any
company is required to effect certain one time asperson or entity concerning consequences of
well as periodic filings with prescribed governmentanything done or omitted to be done wholly or
regulatory and tax authorities. These filings includepartly in reliance upon this Synopsis.