Things to Consider before Opening Foreign Subsidiary Company in India

1

If a foreign company intends to start Business in India, it may establish a company under the Companies Act, 2013 as – 

  • a joint venture,
  • or a wholly-owned subsidiary,
  • or as a Liaison Office/ Representative Office,
  • or a Project Office,
  • or a Branch office of a foreign company authorized to conduct operations under Foreign Exchange Management.

A wholly-owned subsidiary can be defined as an entity with share capital held by foreign corporations. It is possible for a wholly-owned subsidiary to have private limited company registration in India or a share-limited company, guarantee-limited company, or limited liability company.

KEY FEATURES:

Many of the main characteristics of the wholly-owned subsidiary are defined as:

  • The wholly-owned corporation is controlled by Indian law i.e., Law of Companies 2013.
  • All business forms such as manufacturing, marketing, service sectors are allowed.
  • Where the 100 % FDI (Foreign Direct Investment) is permitted, no RBI (Reserve Bank of India) prior approval is required.
  • It is classified as a domestic company under the Tax Law and liable, as applicable to any other Indian company, for any exemptions.
  • Funding in the form of share capital and loans may be issued.

INFORMATION/DOCUMENTS REQUIRED FROM FOREIGN COMPANY

  1. Apostille / Resolution copy of Foreign Society ‘Named Authorized Representative, No. Share Subscription;’
  2. Apostille / Notarized ID Proof of authorized representative if such person is a non-resident of India; Proof of authorized representative;
  3. Apostille / Notarized copy of the Foreign Business Charter;
  4. one resident director’s name;
  5. Name of candidate (when WOS is incorporated).

PREPARATION OF DOCUMENTS FOR INCORPORATION OF COMPANY

  • The following documents must be prepared after approval of the name or the incorporation of the applicant company:
  • Company’s Memorandum of Association (Physical copy of MoA; e- MoA (INC-33) is not available);
  • Article AoA (Physical AoA Copy; e- AoA (INC-34) can not be filed), Article of the Association of Company;
  • INC-9 declaration (duly apostille or notarially proclaimed in the country of origin) by a subscriber(s) and director(s);
  • First Director Statement, together with a copy of Identity Proof and residential address. (Apostille or notaries adequately made in the country of origin);
  • A claim of non-PAN made by international subscribers. (Dull or notarized properly apostille in the country of origin);
  • The property’s owner’s NOC;
  • Proof of an office address, including rent receipts (Conveyance/lease / rental agreement, etc.);
  • Copying the registered office address and planned company Directors’ Utility Bills (not older than two months);
  • A digital signature is appropriate to join a Business with only one subscriber;

FILL THE INFORMATION IN FORM SPICE+ AND AGILE-PRO ON MCA:

  • Total THREE (3) directors, if they do not have DINs, are permitted to submit to the DIN assignment during incorporation of a company. If directors have no DINs, the proofs of identity and residential address of the applicant shall be necessary to attach (properly apostilled or notarized in the country of origin).
  • Digital affixed / notarized MoA copy in the form;
  • Assign the physical copy of AoA in the form;
  • Copy of ID and address The Foreign National Director shall be properly apostilled and notarized by the Evidence Director;
  • The company can, by registering on MCA, apply for registration for a goods and services tax ID (GST), Employees State Insurance Corporation Registry (ESIC) and Employees Providing Fund (EPFO) in a single AGILE format along with the company.

CERTIFICATE OF INCORPORATION

Once it has been established that all records are correct for Indian Subsidiary Registration, the ROC will scrutinize the documents as mentioned above, and the company incorporation certificate is the definitive proof of the company’s registration.

The Business is officially credited with an Income Tax Department Permanent Account Number (PAN) and Tax Account Number (TAN).

POST INCORPORATION COMPLIANCES:

Phase I: Open the Subscription Money Bank Account;

Stage II: International Subscriber receipt of subscription money;

Stage III: submission of e-form 20A – Business Start Declaration;

Stage IV: Selection of the Bank’s FIRC Certificate according to FDI Guidelines;

Step V: Issue the subscribers’ share certificate;

Phase VI: RBI FCGPR file in compliance with FDI Guidelines.

When these documents are available and the correct protocol is followed, no undue delays can occur and the Business can be incorporated as soon as possible. At LegalWiz.in, we can help you quickly register a subsidiary in India.

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