Subsidiary of Foreign Company

Ideal for Large Businesses Starting at Rs. 25000 (All-Inclusive)

Foreign legal entities may set up subsidiaries in India and the legislation in this country provides for two types of subsidiaries, depending on the capital owned by the foreign company. Thus, when starting a company in India which is represented by a foreign legal entity, the investors may choose to incorporate a wholly-owned subsidiary or a subsidiary company.

According to the Companies Act 2013, a subsidiary is defined as a company in which a foreign legal entity owns at least 50% of the total share capital. The definition also states that the foreign company has legal rights on the structure of the board of directors of the subsidiary. There must be at least one Indian resident director in company. There are two main options when registering a company in India as a subsidiary. Investors may establish a wholly-owned subsidiary, which designates the fact that the parent company owns 100% of the subsidiary’s shares. This option is available only for the business sectors which allow 100% foreign direct investments. The other option refers to the subsidiary company, in which the parent company controls at least 50% of the subsidiary’s capital.

Reasons to Establish a Foreign Subsidiary:

  • Opening up Access to New Markets for Products and Services :
    The scope of expansion is higher because it is easy to raise capital from a venture capitalist, financial institutions, angel investor, and the advantages of limited liability, the Private limited offer more transparency in the company.

 

  • Expanding Brand Recognition :
    The brand value of a company will get increased because employees feel secure in joining the private limited company, vendor feels secure in offering credit, investor feels secure in investing, the customer feels trust and confidence in a brand in buying company product or services because of the sound corporate structure. Many startup companies start with zero revenue and rapidly reach to a multibillion-dollar company in just a few years just because of the high brand value of the company.

 

  • Limited Liability :
    The liability of Directors and members of the private limited company is limited to their shares. This means the company suffers from any loss and faces financial distress because of primary business activity, the personal assets of shareholders/Members/Directors will not be at risk of being seized by banks, creditors, and government.

 

  • More Cost-Effective Production and Manufacturing

 

  • Access to Technical Skills / Regional Knowledge

 

  • Customer Service Centers

 

  • Part of a Global Expansion Plan

 

  • Use of Free Trade

 

  • Participating in Local Economic Opportunities
Get A Subsidiary of a Foreign Company with Ease,

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Advantages:

  • India is world’s largest democracy with population of 1.2 billion people. Nearly 50% of Indian population is between ages of 15 to 64 years of age. This proportion is likely to increase to around 64% by 2021. India will be young country with median age of 30 years by 2025.

  • Human Resource quality in India is one of the best available in the world with significant English speaking population.

  • Stable Government and political environment, well established judicial system to enforce law, abundant natural resources, diverse climatic conditions, investor friendly policies, low labor cost and huge untapped markets makes India one of the most favored nations to invest.

  • India’s growth will outpace that of China in coming years. With estimated growth rate of 9 to 10 percent over next 25 years India will become fastest growing economy in the world. India’s economy may become five fold in next 20 years as per experts.

Procedure of Foreign Company Registration in India

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You can choose any of our packages based on your requirements.

Name Availability

Company Law expert from My Efilings will file the application for availability of new name with the MCA after drafting of resolutions. The approved name shall be available only for 20 days.

Application for Din & DSC

DIN and DSC for the proposed Directors of the Company has to be obtained. This takes around 5 to 8 days of time

Form Filing

Once DSC is made, we need to submit incorporation documents in specified forms with the ROC. Processing time taken by ROC to approve the incorporation documents is around 7 to 9 days.

Success!

Once documents are verified and approved you will receive the incorporation certificate.

Documentation Needed For Registration

  • 1. All the documents of the foreign party will be received after getting notarized / appostiled / consolorised as per the norms of the respective foreign company
  • 2. Affidavit regarding non-acceptance of deposit duly notarized
  • 3. Declaration by an advocate, a Chartered Accountant, Cost accountant or Company Secretary in practice shall be in Form No. 8 duly notarized
  • 4. Declaration by first director in form DIR-2
  • 5. Interest in other entities, if any
  • 6. Affidavit shall be submitted by each of the subscribers to the memorandum and each of the first directors named in the articles in Form No.9 duly notarized
  • 7. Special POA to authorize professional
  • 8. Self attested copy PAN card of proposed directors & subscribers to MOA
  • 9. Self attested copy address proof of proposed directors &subscribers to MOA
  • 10. Self attested copy identity proofs of proposed directors & subscribers to MOA
  • 11. Copy of rent agreement/lease deed
  • 12. NOC from landlord
  • 13. Copy of electricity / telephone/gas/mobile Bill (not older than two (2) Months) of proposed registered office address
  • 14. MOA, AOA & Certificate of Incorporation of foreign holding Company, attested by director of that company duly translated in English, if not in English language & Certified by Indian Consulate
  • 15. Certificate of Incorporation of the foreign holding company attested by director of that company duly translated in English, if not in English language & Certified by Indian Consulate

Post Incorporation Compliances

Opening of Bank Account

Bank account of company is required to get open to receive the subscription money from subscribers including Foreign holding Company.

Filing of ARF (Advance Reporting Form) with RBI

The reporting regarding receipt of subscription money has to be done within 30 days from date of receipt of fund in ARF to RBI.

Allotment of shares

Allotment of shares to be done within 2 months from date of incorporation of subsidiary company to the subscribers.

Filing of Form FC-GPR with RBI

Form FCGPR is required to be filed with RBI within 30 days from date of allotment of shares to subscribers/foreign holding company.

FAQ'S

Foreign Direct Investment (FDI) up to 100% is now allowed in many industries. There are two routes to invest in India, Automatic Route and Government Route. Leaving few industries, Automatic Route is available for many industries. No prior approval is required from Reserve Bank of India (RBI) for Automatic Route. Only intimation within 30 days of investment is required.

Of course, the Indian Companies Act requires that there should be at least two shareholders and foreign companies hence must hold 99.99% of shares of an Indian subsidiary. Besides, minority balance holding is nominated and held under the Indian Companies Act in the name of an individual.
The reserve bank of India has some guidelines that define activities for foreign Companies under the following broad categories:
  • 1. A foreign company is freely allowed for the activities to engage in without obtaining any permission.
  • 2. A foreign company is allowed for the activities to participate subject to conditions.
  • 3. A foreign company is prohibited for the activities to engage in. Such activities are further elaborated under various circulars of RBI under FEMA.
An Apostille is simply the name for a specialized certificate, issued by the Secretary of State. The Apostille is attached to your original document to verify it is legitimate and authentic so it will be accepted in one of the other countries who are members of the Hague Apostille Convention.India, since 2005, is a member of the Hague Convention of October 5, 1961 that abolished the requirement of legalization of foreign public documents. Moreover, An apostille certificate can be used to authenticate public documents like passport copy, drivers license copy, business documents, judgements, extract of a register or a notarial attestation. Any document Apostilled in one member country is acceptable in all the other 104 member-countries, signatory to the referred convention of 1961 thus greatly simplifying the process of attestation by making it needless to get the documents attested in each or for each of the countries separately. Our team will be happy to explain you more in detail.
No, new company registration is a fully online process. As all documents has filed electronically and you would not need to be physically present at all. Therefore, You would need to send us scanned copies of all the required documents & forms.
Yes, a NRIs and Foreign National can become Directors in a Private Limited Company. They need to get a DIN from the Indian ROC. It also has a majority shareholder in the company. It provides at least one Director on the Board of Directors has an Indian Resident.

No at the time of Company Registration there is no requirement of Obtaining RBI approval Expect in some cases.

Investments can be made by non-residents through the Automatic Route (where prior regulatory approval is not required) or Government Route (where prior regulatory approval is required).
    • Automatic Route
      An Indian company may, subject to the prescribed FDI caps, sectoral regulations and licensing requirements applicable for various sectors / activities (if any), issue capital instruments to person’s resident outside India under the automatic route. In terms of the said sectoral regulations, there are certain sectors in which foreign investment is not permitted under the automatic route and requires specific approval, such as, the domestic airlines, broadcasting, print and news media, atomic minerals, defense etc.
 
    • Approval Route
      If the proposed investment does not qualify for the “automatic route”, the company in which such foreign investment is sought to be made would have to make an application on the Foreign Investment Facilitation Portal (FIFP) for approval. The approval is granted on a case to case basis at the discretion of the concerned ministry/department, and in approving an investment proposal, the concerned department/ministry ordinarily considers factors such as inflow and outflow of foreign exchange, general benefit to the Indian economy, induction of technology, export potential, potential for large-scale employment, etc.