Registering a Foreign Company in India

A foreign company in India is the type of company registration that is owned by an entity outside of India. One can register a company as a foreign company in different ways such as-

  • Wholly-owned subsidiary company
  • Joint Venture
  • Representative or Liaison office
  • Project office
  • Branch office

To register any company as one of the above-mentioned types, an individual needs to know all about foreign company registration in India. In this article, we have discussed the ways a foreign company can be registered and the documents required for the registration process.

Foreign Company Registration

Documents required for foreign Company Registration in India:

The documents required for foreign company registration depends on the way a foreign company will be starting the business in India. The documents as per the type of foreign company are as follows- 

  • Wholly-owned subsidiary Company: For such a foreign company registration, the following documents must be submitted and must be certified by the Indian Consulate or Consular-
  • For citizens of India: Address Proof of office, residential address proof, PAN Card, Photo ID proof such as voting card or AADHAAR Card, etc.
  • For foreign nationals: Address proof of the office place, residential address proof, Passport, Photo ID proof such as a government license, etc.
  • Joint Venture: For Joint venture organizations, a proper legal contract must be drafted and the following must be included in the same-
  • Agreement of Dispute Resolution
  • Applicable laws, rules, and regulations
  • Board of Directors, Non-Compete
  • Confidentiality of the contract
  • Shareholdings of the company
  • Transfer of shares
  • Liaison Office or Representative Office: The rules and criteria for opening a liaison office in India have been prescribed by the Reserve Bank of India (RBI). The following must be adhered to, for this way of foreign company registration-
  • A record of profit-making of the company in the home country for at least 3 preceding financial years.
  • The net value of the company must be above 50000 USD.
  • In case the above criteria are not fulfilled by the company, a letter of comfort is to be presented by the parent company stating the fulfillment of the above-mentioned conditions.
  • RBI is required to provide specific approval under the following statutes-
  • Insurance Regulatory and Development Authority (IRDA)
  • FEMA, 1999
  • Banks are required to forward the application to RBI for office establishment in a designated Authorized Dealer Category-I.
  • The RBI provides a Unique Identification Number to every office.
  • The following documents must be attached along with the Foreign Company Registration for Liaison Office:
  • Registration Certificate/ Incorporation Certificate
  • Memorandum of Association (MOA)
  • Articles of Association (AOA)
  • Audited balance sheet of the company must be filed in the home country of registration.
  • Project Office: In case the foreign company registration wants to set up a project office, and it has already secured a contract from a company in India, it is not required to take prior permission from RBI to execute the project if the following circumstances are there-
  • It has been passed and cleared by an appropriate authorized authority.
  • It is bilaterally or multilaterally funded by the International Financing Agency.
  • It is directly funded by an abroad inward remittance.
  • If the company in India has been provided a contract with a grant of term loan from an Indian bank for the projects.
  • Branch Office: A foreign company registration through a branch office can conduct business activity in India with RBIs prior approval, if-
  • The company has profit for the preceding five financial years.
  • The company is engaged in trading or manufacturing activities.
  • Company’s net worth in the home country is more than 100000 USD.

Laws governing the Foreign Company Registration in India:

The following statutes govern and regulate the type of business entity established under Foreign Company Registration-

  • Companies Act, 2013
  • Foreign Direct Investment (FDI) Policy
  • Foreign Exchange Management Act (FEMA), 1999

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    Author: Anil Agrawal
    EZYBIZ India Consulting LLP, New Delhi. The firm is business and tax consultancy firm providing consultancy in Taxation, Regulatory, Transfer pricing, Valuation, Corporate funding and Business set up matters. He may be reached at 9899217778 or anil@ezybizindia.in.
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