Though a foreign corporation can start a business in India in various formats like, a project office, a representative office or by opening a branch office, in all such type the Indian entity so created remains a foreign entity which is subject to higher rates of taxes and stringent regulations.
Subsidiary of Foreign Company/Indian Company
In case the foreign corporation has plans to operate in India on a full-fledged scale just like an Indian company then a subsidiary company of such an international company is the answer. The subsidiary of Foreign Company may be incorporated in the form of private or a public company. As an Indian Subsidiary Company, it shall be subject to the same set of rules which applies to any other Indian company.
The incorporation of a subsidiary company in India is subject to sectoral ceiling/limit of foreign direct investment (FDI). FDI in India can be through following routes:
- Automatic Route
- Approval Route
Under Automatic Route, the company incorporation with Foreign Direct Investment can be done without obtaining any prior approval from the Central Government. Under Restricted route, the sector is not open to 100% FDI, hence, prior permission of the concerned ministry of the Central Government is required.
It is mandatory to appoint atleast one Indian resident as the director of the company for a subsidiary of a Foreign Company. A person is said to be a Indian resident when he/she stays in India for at least 182 days during the previous financial year.
The documentation plays a very critical role in the quick registration of the subsidiary company in India. Wherein the foreign nationals involved in registration are present in India along with the original documents and holding a business Visa, the documents can be attested in India. In all other cases, the documents are required to be notarizated in the country of origin at the office of Indian Embassy and apostille, in case the country of origin falls under Hague convention or consolarize, in case the county of origin falls neither under Hague Convention nor under Commonwealth Country.
Secretarial team of Expert Advisorz help you incorporate your Subsidiary Company in hassle free manner. We at Expert Advisorz provide following services with regard to incorporation of Public Limited Companies:-
- Digital Signature of Director:- As the application for the Registration is filed online with Digital Signatures of the director, hence the process starts with the issue of the digital signature for all the directors/promoters. We at Expert Advisorz have a separate compliance department which looks after issuance of DSC.
- Director Identification Number:- It is a unique identification number allotted to the director of a company by MCA. No person can hold an office of the director unless he is issued a DIN. DIN is required for incorporation and for all future communication between director and the company as well as Ministry of corporate affairs. Secretarial team of Expert Advisorz help you in allotment of your DIN.
- Name Approval of Company:- Name of each company must be unique and should not be same or in resemblance with any already registered company, LLP or a Trademark. Before incorporating a company, an application is made to the ROC for approval of name. Our Management and Secretarial team will help you while deciding the name of the company and then final approval of the same.
- MOA & AOA of Company:- These are charter documents for the Company. The MOA contains the Name, object, state in which company is registered, the maximum amount of capital which it can raise (Authorised Capital) & a declaration that the company is a limited company. Whereas all rules & regulation of the company is incorporated in Articles of Association (AOA). The promoters need to adopt and sign MOA & AOA, which is then filed with the MCA. Legal team of Expert Advisorz help you in drafting your MOA & AOA to make it suitable for your business and in truly reflecting arrangement between company and other stakeholders.
- Company Incorporation:- All the steps as described above finally culminates into the registration of the company with the issuance of the certificate of Incorporation. The certificate of incorporation is the conclusive proof of the registration of the company. Pool of professional in Expert Advisorz will help you get your company’s certificate of Incorporation so that you can start your business smoothly.
- Applying for PAN:- Permanent Account Number (PAN) is must for starting a business in India. It’s a unique 10-digit alpha-numeric no. allotted by Income Tax Department. We at Expert Advisorz help you in applying and getting PAN.
- Shops & Establishment Registration:- Every shop or commercial establishment is required to get itself registered with the labour department of the state government. The application for registration must be filed within 30 days of starting a business in India. We at Expert Advisorz help your business get this registration.
- Open a bank Account:- To transact the business, the Directors must open a current account in the name of the Company. However due to complex regulatory requirement it often become a tedious task to open a bank account. We at Expert Advisorz assist our clients in opening their bank account.
- MSME Registration:- MSME is priority sector for Government of India, Government of India offers various scheme and benefits to MSME’s. Further banks also offers priority loan at low rate of interest to these units. To avail these benefits, one should be registered as MSME unit. We at Expert Advisorz help our client to get registered as MSME Unit and advises them on benefits they can avail out of this scheme.
- Professional Tax Registration:- Professional Tax is a tax which is levied by some state on the income earned by professionals and salaried employees. Expert Advisorz help you obtain professional tax registration.
- GST Registration:- GST is a tax on goods and services, every person who supplies any goods or service has to get registered under GST. We at Expert Advisors help you obtain GST Registration.
- Trademark Registration:- In today’s competitive and dynamic business environment every business spends millions of rupees and number of years in creating a brand Still, some of them fails to get it registered with IPR authority and thus loses the brand. We at Expert Advisorz help our client right from applying trademark registration to final approval of the same.
- Transmission of funds to India:- Once the bank account of the Indian subsidiary is opened, the funds are transmitted to India via normal banking channels through AD Category-I Bank and subsequently the said bank issues FIRC (Foreign Inward Remittance Certificate). We at Expert Advisorz assist our client for obtaining the FIRC from bank.
- Intimation to Reserve Bank of India:- The receipt of funds in the bank account of the Company needs to be reported to Reserve Bank of India (RBI). Expert Advisorz helps you to report the receipt of funds to RBI.
- Allotment of shares and reporting to RBI:- After receiving the funds in the bank account of the Company, the shares are allotted to the subscribers to the Memorandum of Association (MOA) and the allotment of shares to non-residents is reported to RBI. We at Expert Advisorz help our client to report the allotment of shares to RBI.
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