Under the Indian Companies Act, 2013, a foreign company can establish its foothold and commence business operations in India through registration as a ‘foreign company.’ Here is a comprehensive explanation of the process, procedures, and compliance requirements:
Definition of Foreign Company: As defined in the Indian Companies Act, a foreign company is a business entity incorporated outside the borders of India, which has set up a place of business within the country. This presence could be direct or via an agent, either physically or through electronic mode, with the intent of carrying out business activities in India.
Place of Business: The prerequisite for a foreign company’s operation in India is establishing a place of business within the country. This place could take the form of a branch office, a liaison office, or a project office, depending on the company’s intended activities in India. A branch office can execute transactions and earn income, whereas a liaison office primarily acts as a channel of communication and cannot earn income. A project office is a temporary establishment set up to carry out a specific project in the country.
Application for Registration: The foreign company is required to submit an application for registration to the Registrar of Companies (RoC) in the prescribed Form FC-1. This application should include several documents such as:
Registration Certificate: Upon the RoC’s satisfaction with the provided documents and requirements, they may issue a Certificate of Registration to the foreign company. This certificate serves as official confirmation of the establishment of the foreign company’s presence in India.
Compliance Requirements: Once the foreign company is registered, it must fulfill certain compliance requirements, including:
While the points above provide a broad outline, it’s crucial to remember that the specific requirements and procedures for registering and operating as a foreign company in India may change based on factors like the business’s nature, sector-specific regulations, and any bilateral agreements between India and the company’s country of origin.
To navigate the complex legal and regulatory landscape, foreign companies are advised to seek expert legal and professional guidance. This will ensure adherence to all requisite norms and regulations, guaranteeing a smooth registration process and efficient ongoing operations in India. The Indian Government has taken several measures to make India an attractive destination for foreign investors. However, proper compliance with local laws is critical to ensure a successful business operation in the country.