Foreign Companies Registration in India

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Foreign Companies Registration in India

India is one of the fastest growing nations in the world. India is the country with a lot of opportunities for not only Indians but also a foreign citizen. Make in India is an initiative taken by Prime Minister Shri Narendra Modi. Due to globalization and privatization, the efforts of have turned into reality. Make in India is the step for investors to invest their money in India.

Foreign Company

Foreign Company is any company or Corporate Body formed outside India. There certain rules and guidelines have to be followed as laid down by The Companies Act, 2013, RBI guidelines etc. Foreign Company can Start the business in India.

Company has a place of Business in India whether by itself or through an agent. It can be physically or in electronic mode. Any business activity in India in any other manner

Following are the forms in which a foreign company can enter the market of India or set up business operations in India

In case of an Indian company

• Wholly Owned Subsidiary
• Joint Venture

In case of a Foreign Company

• Branch Office of the foreign company
• Representative Office or a Project Office or
• Setting up a Liaison Office
• Being an Indian company Way Foreign Company Registration in India

What is a Wholly owned subsidiary Company?

Wholly owned subsidiary Company is form of company in which a foreign company invests 100% FDI in Indian company through automatic route.

For ABC of UK owns 100% shares in CD Ltd of India then CD Ltd becomes subsidiary company of ABC

It can also be called as an entity whose whole share capital is in the hand of a foreign corporate body. Companies can be Private limited Company by guarantee or shares or an Unlimited Liability Company.

Documents required

Office's Address proof and in case of accommodation is rented then latest electricity bill.

Indian citizen

• PAN card is mandatory
• Address proof (DL, Aadhar, Passport, Voter id)
• Photograph

Foreign national

• Passport is mandatory
• Address Proof (Passport)
• Photograph
• ID Proof (Government license or Document containing Name in full, Photo and Date of birth)
• Documents submitted must be certified by the Indian Consular or consulate.

Need and Procedure of registration

• Minimum 2 shareholders or directors.
• All directors have to obtain DIN (Director's Identification No.) and DSC( Digital signature certificate).
• Name of the company has to be filed In Form INC-1 application.
• Draft your MOA and AOA and then a subscription to MOA has to be done by shareholder and appropriate persons.
• ROC approves ie. Application for Incorporation of Company)
• Form DIR-12 -Particulars regarding appointment of directors, the key managerial personnel and any changes in them
• ROC online fees and stamp duty has to be paid as per the authorized capital of the company.
• ROC verifies all the documents and also Form INC-22 and DIR-12 are approved and INC-7 is verified.
• After the satisfaction of registrar certificate of incorporation can be issued.
• Obtain PAN card and open company's bank account.
• After the subscription of share, capital documents have to be submitted for FDI compliance.

What is a Joint Venture?

Joint Venture is an arrangement where two or more parties cooperate to achieve a commercial object or run a business. There are various forms like Company, Limited Liability Partnership, Partnership firm etc. This can be on long term basis like running for perpetuity or for a limited time based on the object. It is a very flexible concept.

NRI or foreign partner involved in a joint venture it requires government approval ie. either from RBI or FIPB.

The entity has to select a local partner with whom you want to enter into joint venture then a Memorandum of Understanding or a Letter of Intent is to be signed which will state the basis for the joint venture agreement. All the terms should be discussed thoroughly and negotiated and must be consistent with regional as well as international law. It should address the important matters like Dispute resolution agreements, law Applicable, holding shares, Transfer of shares, Board of Directors Non-Compete, Confidentiality etc.

Foreign Company Registration as a Foreign Company in India

• Setting up a Liaison Office or Representative Office in India has the criteria prescribed by RBI.
• There should be profit making record in the immediate preceding 3 financial years in the home country and their net value should not be less than USD 50,000
• Letter can be submitted by a subsidiary of other company which does not satisfy the above condition can submit a letter of comfort from their parent company.
• RBI approval is required under FEMA 1999 as well as approval from the IRDA Insurance Regulatory and Development Authority).
• Company should be engaged in activities like manufacturing or trading.
• Company should have a profit in the immediately preceding five financial years and should have a net worth of not less than USD 100,000 in its home country.
• The subsidiary company of other if does not fulfil the above condition then they can submit a Letter of Comfort from their parent company if parent company fulfils the above condition

Following are the activities

• Import & Export of goods.
• Carrying out research work in area in which its parent company is engaged
• Providing professional or consultancy services.
• Foreign Airline/ Shipping Company.
• The representing parent company in India and acting as buying/selling agent in India.
• Promoting technical/financial collaborations on behalf of the parent
• Providing IT services and developing software in India.
• Providing technical support for products supplied by the parent

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