Expanding your business internationally can be a significant move for global growth, and India, with its rapidly growing economy, offers ample opportunities for foreign investors. If you’re looking to set up a foreign subsidiary in India, it’s essential to follow the right steps and understand the regulatory landscape. This guide will help you navigate through the process of foreign company incorporation in India, with an emphasis on legal and tax requirements.
Understanding Foreign Subsidiary Company Registration in India
A foreign subsidiary company in India is a company that is registered under the Companies Act, 2013, with a majority stake (more than 50%) held by a foreign entity. This structure provides foreign investors a legal presence and operational flexibility in the Indian market. Whether you’re setting up a wholly-owned subsidiary or a joint venture, the registration process requires careful planning and compliance with Indian regulations.
Step-by-Step Process for Foreign Company Registration in India
- Obtain Digital Signature Certificate (DSC) and Director Identification Number (DIN): Before proceeding with foreign company registration in India, the company’s directors must obtain a Digital Signature Certificate (DSC) and Director Identification Number (DIN). These are required for filing documents electronically with the Ministry of Corporate Affairs (MCA).
- Choose a Company Name: Choosing the right name for your foreign subsidiary is crucial. The name should comply with the guidelines set by the MCA and should not conflict with any existing trademarks or company names. You can reserve the name online through the MCA portal.
- Prepare the Required Documents: The following documents are typically required for foreign company incorporation in India:
- Copy of the passport of foreign directors
- Proof of address of the foreign directors
- Memorandum and Articles of Association (MOA & AOA)
- Certificate of Incorporation of the parent company
- Financial statement and identity proof of the parent company
- File for Incorporation with MCA: After preparing the necessary documents, the next step is to file them with the MCA. The filing process involves submitting forms such as SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus). The MCA will review the documents and, if everything is in order, grant the Certificate of Incorporation.
- Apply for PAN and TAN: Once the foreign subsidiary is incorporated, the company must apply for a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) with the Income Tax Department. These are essential for tax purposes and legal compliance in India.
- Open a Bank Account: A corporate bank account needs to be opened in the name of the subsidiary for carrying out business transactions. This requires the company’s PAN and other incorporation documents.
- Groom Tax: Navigating the Tax Landscape: One critical step during the foreign company registration process is understanding and adhering to the tax regulations in India. Groom Tax, a leading tax consultancy, can help guide you through the complexities of tax laws, including corporate tax rates, GST, transfer pricing, and other compliance requirements. Managing taxes efficiently is crucial to the success of your business in India, and Groom Tax provides expert services to ensure compliance with all Indian tax laws.
- Comply with Other Regulatory Requirements: Depending on the nature of your business, there may be additional regulatory compliances to fulfill. These can include obtaining sector-specific licenses or permissions from relevant authorities such as the Reserve Bank of India (RBI) or the Foreign Exchange Management Act (FEMA) guidelines.
Why Choose Groom Tax for Your Foreign Subsidiary Registration?
Groom Tax offers comprehensive support for foreign company incorporation in India, making the process smoother and ensuring full legal compliance. Their expert services include guidance on tax planning, registration, legal documentation, and regulatory compliance. By working with Groom Tax, you can rest assured that your foreign subsidiary in India will be set up successfully and efficiently, adhering to all local regulations.
For more information and assistance with foreign company registration in India, visit Groom Tax.
