India being the fastest growing economy in the world provides many opportunities to foreign companies to grow and develop their business. The foreign investments in India are governed by the rules and policies of FDI, FEMA, RBI and Companies Act 2013.
Wholly owned subsidiary is a company in which a foreign entity makes 100% FDI in India through automatic route. This is considered as the easiest and the preferred route by the foreign entities for establishment of their business in India.
A wholly owned subsidiary company can be formed as a Private Limited or Public Limited Company. A wholly owned company has more flexibility to conduct business in India as compared to liaison office or branch office. In these companies funding can be done via equity, debt and internal accruals. Indian transfer pricing regulations apply on such companies. They are governed by the Companies Act, 2013. They are treated as Domestic Company and are eligible for all exemptions, deductions benefits as applicable to any other Indian company.
a] India’s booming economy and abundance of capital make it a favored investment destination for NRIs, foreign nationals and foreign companies.
b] Any company which is incorporated or registered as a company outside India can operate within the country, as a part of their foreign company, is called a subsidiary company.
c] This Subsidiary Company can be registered as a Public Limited or Private Limited Company.
d] A Private Limited Company is a business that is closely owned and enjoys the rights as provided by the Companies Act, 2013.
e] A Private Limited Company is a business that is closely owned and enjoys the rights as provided by the Companies Act, 2013.
a] No prior approval of RBI is required for incorporation, if the Subsidiary Company is related to the sectors like automobiles, agriculture, electronic equipment, etc.
b] Subsidiary Companies can avail of several tax-benefits like incentives, exemptions prescribed by the government of India depending upon the sector they operate.
c] Foreign Subsidiary Companies generate a lot of job opportunities thereby increasing the economic growth and national income of the country.
The procedure for name approval and name reservation is same as any Indian Company subject to some additional points
Before making an application for the incorporation of the company, we need to apply for the reservation of the name.
Before making an application for the incorporation of the company, we need to apply for the reservation of the name.
a) A foreign company can apply for its own name for reservation for its subsidiary.
b) In case if foreign company applying its own name to reservation for its subsidiary in India then first of all foreign company shall passed a resolution to use the name by its subsidiary in India.
c) Subsidiary shall use such name but with the extension of word “India” in such name for example a Company named ABC Ltd is a foreign company and intend to incorporate a subsidiary in India and it giving its own name to the subsidiary then the same can be used in India by the company but with “ABC India Ltd
d) If a foreign company having any registered trademark outside India the same can be used by it for the trademark of its subsidiary in India.
a) Resolution of the foreign company
b) Charter (MOA) of the foreign Company
c) NOC from the foreign Company to use its own name
d) If foreign company is giving its trademark then copy of the trademark registration certificate (All the above documents must be apposite and notarized, for apposite notrised
We need to file Spice+ e-form for incorporation of foreign company along with the following documents:
a) MOA of the company shall be duly notarized and apostle.
b) AOA of the company shall be duly notarized and apostle.
c) DIR-2 i.e consent of the first director shall be duly apostle and notarized.
d) ID proof of the directors shall be duly apostle and notarized;
e) NOC from the owner of the property in case if the property is taken on lease for use of registered office of the company;
f) ID proof of the directors shall be duly apostle and notarized;
a) Form-20A to be filed :
Once the company incorporated then after incorporation form-20A shall be file with the ROC for declaration of commencement of business.
b)Subscription Money :
Receipt of subscription money from the foreign subscriber/ foreign company
c) FCGPR :
Company shall file FCGPR within 30days from the allotment of shares, to the RBI, to comply FEMA guidelines.
d) Share Certificates :
The Company shall issue the share certificates to the subscribers.
Ask us anything, we would definitely answer!
Yes, Foreign company can incorporate with 100% ownership & it called as Indian Subsidiary company of Foreign Parent Company. Indian company Law allows you to retain 100% ownership by subscribing shares of Indian company subject to FDI guidelines.
Yes, as per the provisions of the Indian Companies Act, 2013, every company to be incorporated in India must have at least one Indian resident individual as a director.
It is not necessary that a Indian Resident director should also be a shareholder in an Indian Company.
An Apostille is a specialized certificate, issued by the Secretary of State. The Apostille is affixed with your original document to verify it is legitimacy and authenticity so that is accepted in one of the other countries who are members of the Hague Apostille Convention.
Since 2005, India is a member of the Hague Convention of October 5, 1961 that abolished the requirement of legalization of foreign public documents. Moreover, an apostille certificate can be used to authenticate public documents like passport copy, driver’s license copy, business documents, judgments, extract of a register or a notarial attestation.(know More)
Following are the documents required from a foreigner to start a company in India:
a) In case of Proof of identity:
In case of foreign nationals, passport is a mandatory requirement for proof of identity.
b) In case of Proof of residence:
Address proofs like bank statement, mobile bill, electricity bill, telephone bill and should be in the name of applicant only.
In case of foreign applicant, address proof should not be older than 2 months from the date of filing of the e-Form.
The attached supporting documents should be attested/ apostille by the Consulate of the Indian Embassy, Foreign public notary.
Yes, a non-resident can become a director in Indian Company if he possess the required documents and one resident director is already on the board.