Foreign Subsidiary Company Registration in India
As the name suggests, Foreign subsidiaries are those companies that are of foreign origins and wanted to establish an office in India. For getting started their business operations in India, the foreign subsidiaries have to get themselves registered as Foreign Subsidiary. Groom Tax helps you in getting your company registered as a Foreign Subsidiary in India.
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- There should be a minimum of 2 Directors and two shareholders in the Indian subsidiary.
- At least one of the directors shall be an Indian Resident and Indian Citizen.
- There should be a local Indian office address for the registered office address.
Limited Liability: The Liability of shareholders is limited to the unpaid subscribed share capital only. Shareholder not liable to pay losses and liability of company by personal assets.
Separate Legal Entity: Company is a separate legal person in the eyes of law and different from its directors and shareholders. Company can operate, contract and own assets and liabilities by its own name like any individual person.
Easy Funding: If you want to raise funds then company is the only options in which you can get funds against issue of equity shares.
Eligible for FDI: You can get the investment from foreign countries also easily in the company under automatic approval route.
Eligible for startup India Recognition: Company can be recognized as startup and get the benefit of income tax exemption u/s 80-IAC and angel tax exemption u/s 56(2)(viib) of the income tax act.
No Eligibility Criteria: There is no requirement of previous profit track record and minimum net worth for foreign company.
No restriction on activities: There is no restriction on nature of business activities but in case of project office and liaison office only limited activities are allowed.
Tax Benefits: There are different rates of taxes on companies ranging from 15% to 30% depends on nature of business and turnover of the company which are as follows:
|Section||Type of Company||Tax Rates|
|115BAB*||Manufacturing Company incorporated after 1st Oct, 2019||17.16% (Tax + SC + EC)|
|115BAA*||Other Companies||25.17% (Tax + SC + EC)|
|If Turnover less than 400 crore||26% (Tax + EC)|
|If Turnover more than 400 crore||31.2% (Tax + EC)|
* Note: Under section 115BAB and 115BAA, companies could not claim certain deduction, exemption and brought forward losses.
List of Documents Required
- Two Proposed Names
- The objective of the proposed company
- Latest Utility bill i.e., electricity bill, landline bill or water bill, etc.
- For rented place, NOC required in the name of the proposed company
- PAN Card of all the Subscribers/Directors
- Photograph of all the Subscribers/Directors
- Aadhar Card of the Subscribers/Directors
- Mobile No. and Email ID of all the Subscribers/Directors
- DL/Voter ID/ passport, anyone documents of all the Subscribers/Directors. ID proof of foreign national shall be duly notarized / apostilled / consularised, as applicable
- Bank statement/ Electricity Bill in the name of the Subscribers/Directors, anyone documents of all the subscribers/directors (should be in English language or translated by authorized translator in English)
- The Signature and address of the subscriber Memorandum of Association (MOA) and Articles of Association (AOA) shall be duly notarized / apostilled / consularised, as applicable
- Copy of certificate of incorporation of holding company duly notarized / apostilled / consularised, as applicable
- Name of nominee shareholder on behalf of foreign company
- Share capital and voting share of directors
- Whether director or partner in any existing Co/LLP
- Place of birth, Occupation and Educational qualification of director
- Present residential address and duration of stay
- Specimen Signature of one signatory
Apply for a name approval for your company using Spice+ Part-A.
Apply for DSC of subscribers and directors
Online preparation of Spice+ PartB, eMOA, eAOA & AGILEPRO.
Online filing of Spice+ Part B, eMOA, eAOA, AGILEPRO and INC-9
Get a certificate of incorporation, PAN & TAN of your company.
- Certificate of incorporation
- Company name approval
- Director identification numbers (DIN)
- Digital signature token for directors
- Memorandum of association
- Articles of association
- Company PAN card
- Company TAN number
- ESI/PF registration
Sectors under Automatic Route
|3.||Mining and Exploration of metal and non-metal ores||220.127.116.11||100%|
|4.||Mining – Coal & Lignite||18.104.22.168||100%|
|6.||Broadcasting Carriage Services ( Teleports, DTH, Cable Networks, Mobile TV, HITS)||22.214.171.124||100%|
|7.||Broadcasting Content Service - Up-linking of Non-‘News & Current Affairs’ TV Channels/ Down-linking of TV Channels||126.96.36.199.3||100%|
|8.||Airports – Greenfield||188.8.131.52 (a)||100%|
|9.||Airports – Brownfield||184.108.40.206 (b)||100%|
|10.||Air Transport Service - Non-Scheduled||220.127.116.11 (2)||100%|
|11.||Air Transport Service - Helicopter Services/ Seaplane Services||18.104.22.168 (3)||100%|
|12.||Other services under Civil Aviation Sector - Ground Handling Services||22.214.171.124 (1)||100%|
|13.||Other services under Civil Aviation Sector - Maintenance and Repair organizations; flying training institutes; and technical training institutions||126.96.36.199 (2)||100%|
|15.||Industrial Parks - new and existing||5.2.11||100%|
|16.||Trading – Wholesale||188.8.131.52||100%|
|17.||Trading –E-commerce activities||184.108.40.206||100%|
|18.||Trading – SBRT||220.127.116.11||100%|
|19.||Duty Free Shops||18.104.22.168||100%|
|21.||Asset Reconstruction Companies||5.2.17||100%|
|22.||Credit Information Companies||5.2.20||100%|
|23.||Intermediaries or Insurance Intermediaries||22.214.171.124||100%|
|24.||White Label ATM Operations||5.2.25||100%|
|25.||Other Financial Services||5.2.26||100%|
|26.||Pharmaceuticals – Greenfield||126.96.36.199||100%|
|27.||Petroleum & Natural Gas - Exploration activities of oil and natural gas fields||188.8.131.52||100%|
|28.||Petroleum refining by PSUs||184.108.40.206||49%|
|29.||Infrastructure Company in the Securities Market||5.2.21||49%|
Sectors where Government Approval is required
|S.No.||Sector/Activity||Relevant Para||Cap||Govt. Approval|
|1.||Mining and mineral separation of titanium bearing minerals and ores||220.127.116.11||100%||Upto 100%|
|2.||Food Product Retail Trading||5.2.5||100%||Upto 100%|
|4.||Broadcasting Content Service
a) FM Radio
b) Up linking of ‘News & Current Affairs’ TV Channels
|5.||Uploading/ Streaming of News & Current Affairs through Digital Media||18.104.22.168.3||26%||Upto 26%|
|6.||Print Media - Publishing of newspaper and periodicals dealing with news and current affairs||22.214.171.124||26%||Upto 26%|
|7.||Print Media - Publication of Indian editions of foreign magazines dealing with news and current affairs||126.96.36.199||26%||Upto 26%|
|8.||Publishing/printing of scientific and technical magazines/specialty journals/ periodicals||188.8.131.52||100%||Upto 100%|
|9.||Publication of facsimile edition of foreign newspapers||184.108.40.206||100%||Upto 100%|
|10.||Air Transport Service – Scheduled, and Regional Air Transport Service,||220.127.116.11(1)||100%||Beyond 49%|
|11.||Investment by Foreign Airlines||18.104.22.168||100%||Upto 49%|
|12.||Satellites - establishment and operation||5.2.12||100%||Upto 100%|
|13.||Telecom Services||5.2.14||100%||Beyond 49%|
|14.||Private Security Agencies||5.2.13||74%||Beyond 49%|
|15.||Trading – MBRT||22.214.171.124||51%||Upto 51%|
|16.||Banking - Private Sector||5.2.18||74%||Beyond 49%|
|17.||Banking - Public Sector||5.2.19||20%||Upto 20%|
|18.||Pharmaceutical – Brownfield||126.96.36.199||100%||Beyond 74%|
India Entry Services
|Particulars||Company/LLP||Branch Office||Project Office||Liaison Office|
|Eligibility||No Criteria||Profit track record of 5 FY and net worth of USD 100,000 or more||No Criteria||Profit track record of 3 FY and net worth of USD 50,000 or more|
|Approval||ROC||RBI and ROC||RBI and ROC||RBI and ROC|
|Purpose/Activities||Commercial, trading, or industrial activities in India||Commercial, trading, or industrial activities in India except retail trading & manufacturing||To Execute a particular project in India||Representing, Promotion and communication|
|Sources of Funds||Capital and Profits||Head office and internally generated funds||Head office and internally generated funds||100% from head office|
|Tax Rate||15%-30%||40%||40%||Not Applicable|
|Minimum No. of Director/AR||2||1||1||1|
|Minimum No. of Director resident in India||1||1||1||1|
|Timelines||7-10 Days||3-4 Months||3-4 Months||3-4 Months|
|Know More||Know More||Know More||Know More|
- Automatic Route: Foreign Investment is allowed under the automatic route without prior approval of the Government or the Reserve Bank of India, in all activities/ sectors as specified in the Regulation 16 of FEMA 20 (R).
- Government Route: Foreign investment in activities not covered under the automatic route requires prior approval of the Government.
- Equity shares: Equity shares are those issued in accordance with the provisions of the Companies Act, 2013 and will include partly paid equity shares issued on or after July 8, 2014.
- Share warrants: Share warrants issued on or after July 8, 2014 will be considered as capital instruments.
- Debentures: ‘Debentures’ means fully, compulsorily and mandatorily convertible debentures.
- Preference shares: ‘Preference’ shares means fully, compulsorily and mandatorily convertible preference shares.
Foreign Direct Investment (FDI) is the investment through capital instruments by a person resident outside India (a) in an unlisted Indian company; or (b) in 10 percent or more of the post issue paid-up equity capital on a fully diluted basis of a listed Indian company.
Foreign Portfolio Investment is any investment made by a person resident outside India in capital instruments where such investment is (a) less than 10 percent of the post issue paid-up equity capital on a fully diluted basis of a listed Indian company or (b) less than 10 percent of the paid up value of each series of capital instruments of a listed Indian company.
If the investor company has total foreign investment in it and is not owned and not controlled by resident Indian citizens or is owned or controlled by persons resident outside India then such investment shall be “Indirect Foreign Investment” for the investee company.
- Proof of Residence in a country which is part of the Common Wealth, by a notary public of that country;
- Proof of Residence in a country which is party to the Hague Apostille Convention, 1961, attestation to be made by a notary public of the said country and duly apostilled in accordance with Hague Convention; or
- Proof of Residence in a country outside the Commonwealth, and which is not party to Hague Convention, authenticated by a Diplomatic or Consular Officer empowered in this behalf under Section 3 of the Diplomatic and Consular Officers (Oaths and Fees) Act, 1948 (40 of 1948) i.e. attested by Public Notary and authenticated by Indian Embassy in the country of residence.
- Proof of identity
- CoI of the foreign body corporate, if applicable
- Document executed outside India (Place of execution determines whether the said document is to be notarised / apostilled / consularised)
- in case of shares of a company listed on a recognized stock exchange in India, at a price, as determined by the company; and
- in case of shares of a company not listed on a recognized stock exchange in India, at a price, which is not less than the price at which the offer on right basis is made to resident shareholders.
- FPIs registered with SEBI