Foreign Subsidiary
Basic
Annual return filing, income tax return filing, secretarial services, LEDGERS accounting software and compliance management for foreign subsidiary company with a turnover of less than Rs.10 lakhs per annum.
Standard
Annual return filing, income tax return filing, secretarial services, LEDGERS accounting software and compliance management for foreign subsidiary company with a turnover of less than Rs.50 lakhs per annum.
Premium
Annual return filing, income tax return filing, secretarial services, LEDGERS accounting software and compliance management for foreign subsidiary company with a turnover of less than Rs.100 lakhs per annum.
Foreign Subsidiary
With a population of over 1.2 billion, India is the largest democratic region and one of the most promising emerging markets in the world. Therefore, there is a great deal of interest among foreign businesses to take advantage of emerging opportunities in India and to be among the first athletes in a rapidly growing market. In this article, we look at the ways in which a foreign company / foreign citizen can start a business in India and / or invest in Indian businesses, as well as the related regulatory framework.
Investing in Indian business in the form of Equity
A foreigner (other than a Pakistani or Bangladeshi citizen) or a corporate entity outside of India (other than a corporate entity in Pakistan or Bangladesh) may invest in India by acquiring shares in an Indian company, subject to FDI Policy -India. Investing in existing equity shares can be broadly divided into two categories: investing under the automatic route and investing under the Government-approved line. The automatic route does not require the requirement of any pre-regulatory investment in Indian business equity shares and post-deposit / notification within the Reserve Bank of India within 30 days of receipt of investment in India and the submission of prescribed documents and details. For the distribution of shares within 30 days of the allocation of shares to foreign investors. Investments in jobs / industries where the automatic route is not available can be made with Government approval under the FDI-approved approach. The Foreign Investment Promotion Board (FIPB) grants such permits.
Direct Foreign Investment Approved in India
Up to 100% Direct Foreign Investment is allowed under the automatic route for most jobs / sectors in India. However, foreign investment in any form precludes a company or corporate entity or entity having an affiliate function with any entity, whether jointly or not affiliated with or proposed to participate in the following business: i) The chit fund business; or, ii) Nidhi Company; or, iii) Agricultural or agricultural activities (excluding floriculture, farming, seed development, animal husbandry, pisciculture, vegetable farming, mushrooms, etc., under controlled conditions, agro & allies sector related services and tea plantations) ; or, iv) Commercial real estate, or farm construction (Excluding township development, residential / commercial construction, roads or bridges); or, v) Trading on Transferable Development Rights (TDRs).
Reporting to Government under the Default Route
A two-phase reporting process was introduced for the purpose of reporting Foreign Direct Investment in India. Firstly, upon receipt of an investment from a foreign investor, the Company must report to the RBI Regional Office under its local Registration Office, a report containing the investment information must be submitted. Next in the case of foreign exchange investor, within 30 days the report in the prescribed form must be submitted to the Regional Office of the RBI. Further, a Certificate from the Company Secretary for Investment Receipt and a Certificate from the Statutory Auditors or Chartered Accountant as required must be submitted.
First Process Funding for Foreign Company in India
In order to incorporate a Private Limited Company in India, the following is required of the client: i) supporting documents, a minimum of two directors (one Indian Director who is also a Citizen of India) and an acceptable name of the company. Once, above, the Digital Signature Certificate and Director ID number (DIN) is obtained by AK taxes on behalf of the client in the Ministry of Corporate Affairs. Upon receipt of the DIN and Digital Signature, a company name request is made to the Department of Business Affairs. After receiving the name authorization, write a Memorandum of Association and complete it within 60 days to complete the submission process.
Requires at least two shareholders in a limited private company. Therefore, the foreign holding company must comply with the Board’s decision to include the Company in India and the registration of shares in the proposed Private Limited Company. The foreign company may hold 99.99% of the shares in the Indian Company while 0.01% of the shares issued by the Private Limited Company may be held by an Indian, subject to the Foreign Company. After merging the company and obtaining the Installation Certificate, open bank accounts and obtain the required licenses. At the same time, perform the file upload via RBI to show FDI in India by default.
Separate documents are required to accommodate a foreign subsidiary company in India
The following are some of the unique requirements for installing a Limited Private Company and External Directors. Requires an identity document and proof of address of the Director, passport or other Government-issued license or registration containing photograph, full name and date of birth is acceptable. Submit any proof of the following address such as Passport, Driver’s License, Bank Account Statement or Services Bill containing the name and address. Then, apparently copy the above documents you need and confirm the documents as a true copy by the Indian Ambassador to the country of the holding company or should be posted. If the texts are not in English, then a certified translation is required. Post the above texts to India. Also, a company that participates in a foreign country to include a subsidiary of India must pass a Board Decision.