We have discussed the provisions and definition of a foreign company in India as per the Companies Act, 2013. Now let’s look at the process of how to incorporate a foreign company in India and what are the necessary requirements and criteria to be taken into consideration. To understand the process better, we must first look at the ways through which a foreign company can enter the Indian market –
- As an Indian company (an entity incorporated inside India), having foreign shareholders in either of these ways-
- A wholly-owned subsidiary (the foreign company must invest 100% FDI in the Indian company it wishes to own).
- A joint venture (agreement with a local partner).
- A subsidiary company (the foreign company owns shares up to the limit of 49.99%).
- As a foreign company, a business entity can register under the Companies Act, 2013 in the following ways-
- A liaison or representative office.
- A private office.
- A branch office.
Steps For Registration Of A Foreign Company
Broadly, the process involves the following 4 major steps-
- Getting the name approved
- Obtaining DIN
- Applying to Ministry of Corporate Affairs
- Obtaining the Certificate of Incorporation
- Determine a name and ensure its availability by applying for the Reserve Unique Name (RUN) form.
- Once the name gets approved, obtain DSC and DIN.
- Draft the Memorandum of Association and Articles of Association (MOA and AOA).
- File the applications for PAN and TAN.
- File form SPICE INC-32, which is an e- form used for company registration.
- The next step involves PF and ESI registration along with company registration.
After the aforementioned applications have been duly filed and approved, the ROC issues a Certificate of Incorporation to the company.
Documents Essential For The Procedure
In incorporating a foreign company whose director/subscribers are foreign nationals, the following documents are essential:
- Address proof
- Passport (notarized in their country and counter attested by the Indian Embassy)
- Copies of utility bills
- No pan declaration
- Form INC -9
For a foreign holding company, the following documents are necessary-
- Incorporation certificate of the foreign holding company
- INC-9 declaration
- Board resolution for investment
- KYC documents of the authorized signatory
An important point to keep in mind is that important documents must be notarized and attested by the Indian embassy.
Documents To Be Submitted To The ROC
- List of directors and secretaries (foreign residency company) along with all KYC documents and proofs.
- Form FC-1 has to be filed within 30 days of establishing a place of business and fee payment has to be made to the ROC.
- Attested copy of approval from RBI (under FEMA and other regulations).
- In case of any change or amendment in the information provided, form FC -2 has to be filed and payment of the relevant fee has to be made within 30 days of the change.
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