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The government has been opening doors in many areas for foreign investment as India grows in popularity as a location for international capital. The country is seeing an increase in the number of Indian subsidiary company in India. According to Indian law, any foreign entity registered in India must have a resident director, even though the number of directors depends on the structure of the company you choose to establish.

An individual who spent at least 182 days in India in the previous year qualifies as a resident director. Having stated that, let us go through the details and documents required for company registration in India.

Documents required for company registration in India

The following are the documents required for company registration in India by foreign nationals or individuals:

1. Passport-size photographs of all the members and directors

2. Address proof of directors (Utility bill or bank statement not older than 2 months)

3. ID proof of all directors (voter ID, driving license, passport, etc.)

4. PAN card of all the directors, and in the case of foreign nationals a passport will be needed

5. Digital Signature Certificate (DSC) of all directors.

6. A specimen signature of the resident director.

7. Self-declaration of the directors regarding directorship in other companies, if any.

8. Apostilled and notarized hard copies of the Memorandum of Association (MOA) and Articles of Association (AOA) from the country of origin.

9. Rent agreement of the registered office or No Objection Certificate (NOC) from the owner of the property.

10. If the property is self-owned, a copy of the registry or the latest Government electricity bill or water bill will be sufficient.

11. Apostille/notarized board resolution from the foreign company for incorporation in India.

12. Incorporation documents of the parent company and KYC of the authorized representative.

Online company registration in India

A foreign national or corporation that wants to establish a company in India which would be an Indian Subsidiary company. The following are the 4 simple steps for online company registration in India:

1. The first step is to prepare the documents and collect all the documents mentioned above or any other documents necessary.

2. The second step is for the members or foreign individuals to sit together or hold a meeting and then decide on a name for the Indian Subsidiary company registration. Along with the name selection, prepare or draft the memorandum of association (MOA) and articles of association (AOA). It includes the shareholding details, business operations, policies, budget division of the company, etc.

4 steps to register an Indian subsidiary company

3. The third step is to go to the MCA portal, then log in using his username and password. Next, click on MCA services, and fill out the SPICe+ application form.

4. The fourth step is to open a bank account in the name of a subsidiary company in India.

What you should know before forming a subsidiary company in India?

1. Different types of subsidiaries in India:

In India, there are primarily two types of subsidiaries one is a wholly-owned subsidiary, the parent company owns all of the shares in the subsidiary. However, wholly-owned subsidiaries can only be formed in industries that permit 100% Foreign Direct Investments (FDI) and another is a Subsidiary Company which is a parent firm that controls more than 50% of the shares of the subsidiary.

It’s important to get approval from the Reserve Bank of India, before incorporating a subsidiary company in India.

2. Features of Indian Subsidiary Companies are as follows:

  • The repatriation of dividends does not need prior clearance
  • Indian subsidiary complies with the Indian transfer pricing structure.
  • According to the Union Budget, the Dividend distribution tax is nil.

3. Advantages of registering as an Indian Subsidiary:

Below are the advantages of forming a subsidiary company in India-:

  • An Indian Subsidiary enjoys the benefit of a separate legal entity in the eyes of the law.
  • An Indian subsidiary has a management structure of its own, apart from the parent company.
  • Owners or shareholders of a company have limited liability towards the company.
  • In the case of Indian Subsidiary, FDI is allowed 100% without any prior permission. However, it needs posts facto filing/intimation to the Reserve Bank of India.
  • The parent company can provide a continuous inflow of funds by subscribing to new shareholders of a subsidiary company and therefore save it from the cost of debt.
  • In terms of taxation as well, the Indian subsidiary will have the same tax structure as a domestic company in India.

4. Importance of forming an Indian Subsidiary:

  • Indian subsidiary companies are allowed to purchase real estate in India because they are regarded as autonomous structures.
  • India’s economy has grown to be the 7th largest in the world and is on the path to overtaking China as the 3rd largest economy in the world.
  • India has a young, productive population, making it simple to build-up an ample customer base.
  • The limited liability of shareholders towards the company is the key benefit of a foreign company’s Indian subsidiary.
  • Depending on the requirement of the applicant, a subsidiary company in India maybe either a Private Limited Company or a Public Company.

Author Bio

Ishita is a young woman entrepreneur and currently the Operations Director at ebizfiling India Private Limited. In her entire career so far, she has led a team of 50+ professionals like CA, CS, MBAs and retired bankers. Apart from her individual experience on almost every facet of Indian Statutory View Full Profile

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April 2024