Foreign Company Registration Procedure
It makes sense that other nations would wish to invest in India, given that it is a developing nation and one of the fastest-developing countries on the planet. Due to its cheap manufacturing costs, which ultimately raise the demand curve for a good or service, India is essentially a hub for business.
Foreign companies are entering India and conducting business here year after year. The question of how a foreign company operates in India now emerges. Let me provide you with a straightforward question-and-answer explanation of the primary issue surrounding this.
What is Foreign Company?
A foreign corporation is defined as any firm or body corporation that was established outside of India and that:
(a) operates a company in India, whether directly or indirectly through an agency, physically or electronically; and
(b) engages in any other type of commercial activity in India.
What Options Exist for a Foreign Corporation to Operate in India?
A foreign corporation that wants to enter and conduct business in India may do so in one of the following ways:
Wholly Owned Subsidiary
A foreign firm must invest 100% FDI in an Indian company through the conventional method in order to make it a wholly owned subsidiary business of a foreign company for the purposes of foreign company registration in India.
Joint Company
The choice of a local partner with whom to form a strategic alliance is crucial for the international company. The framework for the agreement of a joint venture shall be set forth in a Memorandum of Understanding or a Memorandum of Agreement to be executed. All of the conditions must be thoroughly discussed and must adhere to both regional and international legal standards.
Associated Company
Own as many shares of this foreign company’s Indian counterpart as you want.
As Foreign Business
A foreign corporation may launch a business in one of the ways listed below by registering under the Companies Act of 2013.
Division or Branch Office
A foreign business opens a branch office in India. A significant foreign corporation that can demonstrate its profitability is required. Contact Office
For any liaison-related activities in India, a liaison office may be formed. All liaison office costs must be covered by overseas remittances from the parent company.
Project Office
An office may be set up to carry out projects that an Indian firm has entrusted to a foreign company. It could be necessary to get Reserve Bank of India permission.
In India, establishing a private limited company is the trendy and fastest option. The FDI policy allows for up to 100% of foreign direct investment (FDI) in either public or private limited companies. The most popular way of incorporating a foreign company is to register a wholly-owned subsidiary in India.
Wholly-owned subsidiary registration process
Identify minimum two directors, out of which one director shall be a resident in India as per the resident person defined in Income Tax Act,1961.
First of all, company’s name must be reserved through Part-A of the SPICe+ form (company registration application).
All directors must have a valid DSC (Digital Signature Certificate) or should apply for the same if not having a valid DSC
All directors need to apply for DIN (Director Identification Number) after obtaining the DSC.
The Memorandum of Association (MOA) and Article of Association (AOA) must be drafted once the DIN is applied for.
Finally, the registration application shall be filled (Part-B of the SPICe+ form) on MCA portal (www.mca.gov.in) along with the below required documents:
– PAN card, Aadhar card or other address proof and identity proof of Indian directors.
-Passport and address proof, such as driving license, utility bills or any government license certified by the Indian consular or consulate of Foreign directors.
Once the above required documents are submitted, the applicant must pay the applicable fees and submit the registration application.
Once the registrar (ROC) verifies the correctness of the form, he/she will issue the Certificate of Incorporation and the PAN number.
The company should apply for opening a current account.
