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Entry strategy for a French machine tools company

Engagement: SKP was engaged by a French company in the business of lifting tools and access platforms for construction and material handling to evaluate a suitable entry model for establishing a sales presence in India. Initially, the company had tried the acquisition route, which failed; and it now wanted a complete understanding of the possible models of operating in India.

Preliminary Mandate: Evaluating the possible models of operation for the proposed Indian entity

Solution/Value Delivered
SKP provided a background of the regulatory, tax and business regime in India. Some elements of our report were as follows:

  • Overview: To enable an understanding of the overall foreign direct investment (FDI), taxation and exchange control regimes as applicable to the proposed entry of the client in India.
  • Entity Selection: Explaining the various choices as were available for the type of legal entity that could be set up – their scope and limitation on activities, time frame required, risk profile and responsibilities of the India head and the parent company with respect to the Indian entity.
  • Model of Operation: Assessing the various models like commission sales, sale-purchase and pure- marketing along with their implications on revenue (across various activities), profitability, supply chain, tax, and transfer pricing implications to enable the client to decide on the optimal model for India.

The client had a complete understanding of the possible alternatives for their proposed India operations.