Step-by-Step Guide to Registering a Foreign Company in India
India is amongst the few destinations that are diverse, dynamic, and promising for companies looking to expand their global footprint. Thriving economy, a large consumer base, and an innovation-driven market, it is not surprising that foreign companies are exploring this Asian subcontinent.
But before you start planning your launch and rolling out operations, there is one detail that must be taken care of – officially registering your company.
Foreign company registration India may seem like solving a Rubik’s cube with a blindfold. But with the right partner (hint: Greenvissage), the entire process can be quick and smooth. In this guide, we break down the step-by-step process of registering your company in India.
What is a Foreign Company?
The Companies Act, 2013 defines a foreign company as an entity incorporated outside India but:
- Runs any business activity in India OR
- Has a place in India either remotely or physically or via an agent
Types of Foreign Companies in India
- 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
Offshore Company Registration India Process
- Wholly owned subsidiary
- A WOS must have at least two directors with a minimum of one director being an Indian resident
- All directors must possess a valid DIN and DSC
- The WOS must draft an AOA and MOA and all shareholders must subscribe to the MOA
- SPICe+ form must be duly filed along with necessary documents (company address proof, PAN and address details of Indian directors, passport and address proof of foreign directors)
- Once Certificate of Incorporation is received, the company must open a bank account
- Joint venture
- Foreign company chooses an Indian partner
- The two entities enter into an MOU, which states the basis of the JV agreement
- Agreement must include all terms and conditions and must be consistent with international and regional laws
- Branch office
- Foreign company must be either a manufacturing or trading entity with profits in the preceding five years
- Apply to the Foreign Exchange Department via a designated Authorized Dealer Category – I Bank along with the latest audited balance sheet
- Approval needed from RBI under FEMA 1999
- Project Office
- No RBI approval is needed if foreign company receives a contract from an Indian company
- Project funding via inward remittances
- Entity providing the contract must secure funding from an Indian bank or financial institution
- Representative office
- Foreign company must be profitable in the last three years with a minimum net value of $500,000
- Application along with the latest audited financial statements must be submitted to the Foreign Exchange Department
- RBI provides a unique Identification Number
- PAN must be procured from the IT Authority
- Frequently asked questions
- What are the challenges and risks of doing business in India?
- A foreign entity looking to register a company in India may face challenges like complicated regulatory norms, language barriers, cultural differences. Some risks may include economic fluctuations, political instability, and potential legal disputes.
- What are the tax implications for foreign companies operating in India?
- Foreign entities must pay taxes as per the Indian norms for all domestic income. They may be eligible for tax exemptions or incentives subject to certain conditions.
- Can a foreign company conduct business without registering in India?
- No, all foreign companies must register their entities with the Registrar of Companies under the Ministry of Corporate Affairs.
- What are the regulatory requirements for foreign companies in India?
- International businesses must comply with Indian laws, such as the Companies Act, FEMA, and other regulations as applicable.
