Legal Entity (Foreign Subsidiary) Registration in India
Are you planning to grow your business beyond boundaries? Planning to start your legal entity in India? Our experts can help you with this process for hassle-free incorporation, no matter what your requirements may be. Few major things that you will need to even to start are:
→ Choosing the Right Form of Legal Entity to Start With
→ Registered Office Address in India
→ Authorised Representative for various Tax Registrations & Licenses in India
→ Professional Guidance through out the process
At TAXAJ we can proudly say that we have helped 100's of Legal Entities launched in India and have been guiding them to success throughout from all over the globe. Let's get into more details so that you can be the next one :)
Get your legal entity/company registered in India in the fastest possible manner.
It usually takes 7 to 10 working days.
- Pre Incorporation Advisory and Consultation for Choosing right form of Legal Entity.
- Incorporation of Legal Entity in India.
- Post Incorporation Support
- Assistance in Bank Account Opening
- Resident Director Services
- Registered Office Address
- Support in Operations and Compliances
- Businesses or Individuals aiming to work globally or with reputed clients in India
DSC Application
Name approval form filing
Preparation of Incorporation Documents
Getting those docs signed by the respective stakeholders
Filing of e-Forms with ROC
Receipt of Incorporation Certificate with PAN, TAN, GST, EPF, ESI & Bank Account.
Name, Contact Number and Email Id of all the Stakeholders.
Apostiled ID & Address Proof of Foreign/NRI Stakeholder.
Latest Month Personal Bank Statement of the Stakeholders.
Few Proposed Business Names along with Objects.
Latest Electricity Bill/Landline Bill of Registered Office.
Rent Agreement from Landlord. (If Rented/Leased)
Brief description of main business activities of the proposed Company.
Shareholding Ratio, Authorised & Paid Up Share Capital of the Company.
Requisites for Legal Entity Registration in India:
Resident Indian Director
Registered Address in India
Having a Registered Address for your legal entity in India at a Reputed Place is a fundamental requirement for its legal formation. To expedite your incorporation process smoothly, we offer the option of a Virtual Address, ensuring a seamless experience without any obstacles at an Additional Cost. Virtual Address shall be valid for Incorporation of legal entity as well as for Tax Licenses & Registrations, if any required.
Chartered Accountant
In India, Chartered Accountants (C.A.) play a role similar to that of Certified Public Accountants (C.P.A.s) in your country. They hold legal authorization from the Government of India to authenticate, sign documents and forms, facilitating the seamless establishment of your legal entity. Beyond the initial incorporation, their assistance remains invaluable. Regular collaboration with C.A.s is essential for tasks such as tax filing and annual financial statement audits in alignment with India's regulatory norms and requirements. Their expertise ensures a hassle-free process and adherence to legal obligations throughout your entity's journey.
Professional Guidance
Embarking on the journey of establishing your legal entity in India is just the beginning. Throughout this process, numerous critical decisions will demand professional consultation and guidance. These encompass selecting the appropriate legal entity structure, identifying the ideal city/state for your entity's location, strategising optimal tax planning, and a myriad of other considerations. As a top-tier financial consulting firm in India, we stand ready to provide comprehensive coverage and support, ensuring your venture's success at every step.
TAXAJ is a one stop solution for all your Financial & Taxation Requirements Globally, therefore we shall provide you with everything which may be needed to launch your legal entity in India in a hassle free manner. Let's schedule a virtual meet to discuss this through and get you started without wasting anymore time because "Time is Money"
Procedure for Foreign Subsidiary Company Registration in India:
Step 1: Selecting the Type of Legal Entity to Incorporate
According to FEMA guidelines, Foreign Direct Investment (FDI) is not allowed in the case of Proprietorship, Partnership FirmandOne Person Company. Though investment in LLP’s is allowed, it requires prior approval of the RBI. Hence, the easiest and Fastest Way to incorporate subsidiary of foreign company in India by NRI’s and Foreign Nationals/Entities is through the incorporation of a Private Limited Company.
Step 2: Minimum Requirements to Incorporate a Legal Entity in India
Directors: Minimum two directors are required to incorporate a Private Company in India. Both should be individuals and at-least one of whom should be a resident of India. (A resident of India is a person who has stayed in India for at-least 182 days in the previous year).
Shareholders: Companies Act, 2013 requires that a Private Limited Company have a minimum of two shareholders. There is no condition for residential status of shareholders. Shareholders can be either individuals or entities or a combination of both.
Step 3: Name Approval for Proposed Legal Entity
Selecting a unique and acceptable name for the proposed Company is one of the important steps in the whole Incorporation process. The name should be in consonance with the Object of the Company and should not be identical to existing entities or Undesirable by Law. For Name Approval we need to file a form called RUN (Reserve Unique Name) for incorporating subsidiary of foreign company in India. Check out these Name Guidelines
Step 4: Apostiling & Notary of Documents of Foreign/NRI Stakeholder
Apostilisation & Notarising of the documents of Foreign National is a must for verifying them as per International Standards which makes them acceptable in any foreign country including India to be legally acceptable. In easy language you need to visit Indian Embassy in your country with Self Attested Photo Copy of your Identity and Address Proof as required for Incorporation along with Original to get the signed and stamped by the Official in your physical presence. This process is now online as well and can be done through Notary Agents virtually.
Along with Foreign National's Address & ID Proof, few documents such as Memorandum of Association, Articles of Association, INC 9, DIR 2 etc shall be prepared by us which also has to be Apostiled, in case the Foreign National is not visiting India on Business Visa for Incorporating the legal entity.
Step 5: Applying for Digital Signature Token (DSC's)
The next step towards incorporating legal entity in India is applying for the DSC (Digital Signature Certificate) of the Directors. The primary documents required for obtaining the DIN and DSC are as under:
For Foreign National:
1. Passport Copy
2. Business Visa
3. Utility Bill (Bank Copy, Driving License, Electricity Bill)
4. Passport size Photograph
5. Phone Number & Email Address
- If their passport or Visa be in any other language other than english, than in that case it must be transcripted and english; that transcripted copy along with the original must also be apostilled by the Indian Embassy in their country (If they are not in India).
- All the documents for foreign citizens should be apostilled by the Indian Embassy in their country (If they are not in India).
- All the documents for foreign citizens should be apostilled by their own country's Embassy in India (If they are in India).
Step 6: Application for Incorporation
This is the most vital step in the Incorporation of Legal Entity in India. It requires filing of the Memorandum and Articles of Association of the Company digitally along with various other documents duly executed by the proposed directors and shareholders.
List of Incorporation documents to be executed:
👉 Subscriber sheet of Articles of Association
👉 Subscriber sheet of Memorandum of Association
👉 Declaration by Director in form DIR 2
👉 Declaration of Director in Form INC 9
Generally, the incorporation documents are required to be self-attested by Indian Nationals. However, in case of Foreign Nationals, the process is as under for Incorporation:
In the documents are signed outside India, then the same have to be notarised by a Public notary of the residence country and consularized or apostiled by the competent authority, as the case may be. If the documents are signed in India, then copy of Business Visa and stamped passport, proving his/her presence in India at the time of signing is required.
If the subscriber is a foreign entity, then the Incorporation documents should be signed by the representative of the foreign entity. An Authorisation Letter duly stating the name of the Authorized Person and the number of shares subscribed should be notarised, consularized or apostiled, as the case may be in the home country of the subscriber company. Once the Incorporation application is approved, the Registrar would issue a Certificate with a Corporate Identification Number (CIN). The PAN and TAN of the Company would also be allotted simultaneously.
Step 7: Mandatory Post Incorporation Compliances
Once the legal entity is incorporated there are list of mandatory compliances to be done on immediate basis:
Adopting Rubber Stamp, letter heads, Stamps, Name Board, Sign Board, minutes sheets, Binders etc. and affix Board outside the Registered office as per Sec- 12(3)(c).
Opening of Current Account for the Legal Entity in India
Receipt of Share Subscription Amount
Submission of 'Commencement of Business Form' with RBI/ MCA in Form INC 20A with MCA
Appointment of Auditor and related filling of documents with MCA
Creation of "Entity User" and "Business User" with RBI
Allotment of Shares to Subscriber and Issue of Share Certificates
Facilitate payment of relevant stamp duty for issuance of share certificate
Issuance of Company Secretary Certificate under FEMA
Submission of Form FCGPR with RBI and related formalities like FIRC issuance, etc
Additional Compliances for being a Foreign Entity
A two-stage reporting procedure is to be followed when a company is raising funds from a foreign investor:
👉 On receipt of funds: The Company has to provide details in an “Advance Reporting Form” to the RBI within 30 days of receiving funds from foreign investor(s).
👉 The company has to issue shares within 180 days from the date of receiving funds.
👉 On allotment of shares: The company has to report in specified form (FC-GPR) to the RBI, within 30 days from the date of issue of shares along with:
– A Certificate from the Company Secretary certifying that the company has complied with the procedure for issue of shares as laid down under the Foreign Direct Investment (FDI) Scheme, and,
– A Certificate from a Chartered Accountant indicating the manner of arriving at the price of the shares issued to the foreign investors. Apart from the above, Annual return on Foreign Liabilities and Assets is required to be submitted reporting all the investments received during the year.
Secretarial Compliance
Preparing the directors’ disclosures of interest in other concerns Preparing the declarations from the directors;
Drafting of Board’s report Drafting of Annual return;
Obtaining the financials from Auditor; Email ID of all the proposed directors:
Drafting the minutes for the pre-AGM board meeting. Drafting of Director Report, Annual return and financials. Auditor’s reappointment Document has to be prepared;
Preparation of Fresh Appointment letters to Auditors if any;
Preparation of Annual General Meeting Minutes and related documents;
Preparation and filing of the balance sheet; P&L and Auditors appointment, with the RoC; Filling of AOC 4 , ADT 1 , MGT 7 with their respective attachments.
Statutory Auditing of the Company/LLP up to 300 transaction or 10 Lakhs turnover whichever is earlier.
Q. What are the Foreign Company Compliance in India?
Foreign Subsidiary Company Registered in India are required to maintain various additional compliance under the Companies Act, 2013.
Form FC-1
Foreign Subsidiary Companies registered in India are required to file Form FC-1 within a period of thirty days of the establishment of its place of business in India. The application must be supported with an attested copy of approval from the Reserve Bank of India under the terms of Foreign Exchange Management Act or Regulations, and too from other regulators, if any, sanction is necessary.
Financial Statements
All foreign companies registered in India are required to organise financial statement of its Indian business operations in an agreement with Schedule III of the Companies Act, 2013. Thus foreign companies are required to furnish the following information/statements together with the financial statements of the company to be filed with the Registrar of Companies:
Statement of Associated Party Transaction
Statement of transfer of funds (including dividends if any) which shall, in the relation of any fund transfer between the place of business of the foreign company in India and any other related party of the foreign company
Statement of repatriation of profits
The documents that are referred to above in this rule must be delivered to the Registrar of Companies within a period of six months from the end of the financial year of the foreign company.
Audit of Accounts of Foreign Company
All foreign companies must get its accounts, pertaining to the Indian business operations organised in agreement with the necessities of clause (a) of sub-section (1) of section 381 and rule 4 and audited by a practicing Chartered Accountant in India.
Form FC-3
All foreign companies are required to file with the Registrar of Companies, Form FC-3 detailing the list of places of business of the foreign company along with the financial statements of the company.
Annual Returns
The foreign subsidiaries company registered in India must prepare and file the annual return of the company in Form FC-4 within a period of sixty days from the final day of its financial year. Any document which should be delivered from a foreign company can be delivered to the Registrar of Companies with jurisdiction over New Delhi.
Authentication of translated documents
All foreign subsidiary companies registered in India must get its accounts, pertaining to the Indian business operations organised in agreement with the necessities of clause (a) of sub-section (1) of section 381 and rule 4 and audited by a practicing Chartered Accountant in India.
F.A.Q.
Q. How many directors are required to register a Foreign Subsidiary company?
Minimum of 2 directors are required to register a private limited company. Out of which one director who has stayed in India for total period of not less than 182 days in the previous calendar year (Indian resident).
Q. How long will it takes for the entire registration process to complete?
It depends on the documents provided by you and the Registrar of Companies approval process. It normally takes about 7 to 10 working days.
Q. Should there be a registered office address in India?
In order to register the company, you need to provide us with a local address proof i.e. Proper electricity Bill where the company is proposed to be registered. We would also need a Valid rent agreement or No Objection Letter from the owner of the premise.
Q. Will i get a legal representative also to run and manage that Foreign Subsidiary company?
Absolutely, you will have your representative of choice, who will act as a representative of yours.
Q. Who can be the promoter/shareholder of the wholly owned subsidiary?
There must be a minimum of 2 shareholders to incorporate the company.
Q. Do I have to submit physical documents?
Yes. You can either visit our office during working hours or send the documents via courier to our office.
Q. Will you also help in regulatory compliance?
Yes, Team Taxaj will also assist you with accounting, tax filing and regulatory compliance. The fee for these services depends on the requirements and is on case to case basis.
Q. Can you arrange some sort of address to register a Foreign Subsidiary company?
Yes, of course! At Taxaj we have fully functional Plug & Play Co working office located in Heart of Delhi. Most of our clients boast of a Multi City presence on the basis of Our Virtual office. Here you will get a dedicated receptionist, who will answer to every call that you will get, will receive the mails and parcels from banks and other agencies. will arrange a board room and a conference room , if you or any of the executive plan to drop by sometime.
