A Guide to Foreign Company Registration in India
India is emerging as one of the most preferred destinations for foreign investors. With a large consumer base, supportive government policies, digital infrastructure, and skilled personnel, the country offers unparalleled expansion opportunities.
However, the Indian market has its own challenges, which requires planning – especially with respect to compliance, registration process, and legal structures. In this guide, we provide all the details to know about foreign company registration India including entity types, benefits, and solutions to common issues faced during the process.
Why Register a Foreign Company in India?
The economic landscape is changing fueled by a huge untapped consumer base, digital revolution, and focus on ease of doing business. Here are the benefits of registering a company in India:
🔹 Untapped Consumer Base
India is ranked among the top five economies, which offers numerous opportunities for global players to expand their operations. With over 1.4 billion population, India is one of the largest consumer markets. Foreign companies can reach a varied demographic consumer base by catering to the unique requirements and preferences of different customers.
🔹 Affordable and Talented Personnel
Compared to most developed countries, India boasts of a younger population. Additionally, the population is skilled in different fields with fluency in language, which eliminates language barriers. In comparison to other countries, the cost of hiring skilled people is lower, which reduces operational costs and increases profitability. The availability of a huge affordable talent pool makes business expansion India very lucrative.
🔹 Business Friendly Laws
Recently, the focus has been on implementing policies that are business-friendly with 100% FDI allowed in most sectors. The recent laws are more transparent and consistent, which makes it easier for global companies to expand into India.
Legal and Compliance Checklist
Prior to setting up a business, global organizations must comply with the regulatory guidelines. Here is a simplified checklist:
🔹 Reserve Company Name via the Ministry of Corporate Affairs website
🔹 Procure Digital Signature Certificates for all authorized signatories and directors
🔹 File for incorporation using SPICe+ form along with MOA and AOA
🔹 Avail PAN and TAN registrations
🔹 Register with RBI, if applicable under FEMA regulations
🔹 GST Registration
🔹 Open a bank account with the prescribed authorized share capital
🔹 Obtain industry-specific licenses, such as STPI, FSSAI, SEZ, etc.
Types of Business Structures
🔹 Wholly-owned subsidiary: 100% of the India company is owned by the parent company but is a separate legal entity incorporated as a private limited company
🔹 Joint venture: A foreign company partners with an Indian company to establish a new entity; ownership and management vary as per the agreement between the JV partners
🔹 Branch office: These are established to run specific activities with limited functionality and operate as an extension of the parent company; foreign companies require permission from RBI to setup branch offices
🔹 Project office: Setup to execute a specific contract or project and is temporary until the end of the contract or project
🔹 Representative office: Also known as a liaison office, it represents the interest of the parent company and cannot engage in any business activity or generate domestic revenue
Common Hurdles and Fixes
Although the offshore company registration India process is simple, global organizations may face certain hurdles. Here are some common hurdles and how to fix them:
Hurdle | Fix |
Regulatory Compliance | Partner with experienced business service consultants who are well-versed with the laws |
Approval Delays | Ensure documentation accuracy and completeness with fast-track services where applicable |
Capital and Banking Requirements | Opt for banks specializing in foreign investments to simplify account setup and fund infusion |
Post-Incorporation Compliance | Use a compliance calendar and an experienced service provider for managing filings and statutory deadlines |
Type of Entity | Consider your organizational goals and consult experts to choose the appropriate corporate structure |
Key Takeaways
Expanding into one of the fastest-growing economies is a strategic decision. Aligning the entity structure with organizational objectives can help you lay down the roadmap for long-term success. India provides numerous opportunities but success begins with accurate registration.
Thinking of India Expansion? Let our experts guide you through the registration process – from choosing the right entity structure to compliance, operational setup and post-incorporation compliances.
Drop us an email at info@greenvissage.com or call +91 8237857853
