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.
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