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Indian Subsidiary Registration

There is a lot of interest among foreign companies to start their operations in India and tap into one of the largest and fast-growing market, and have access to some of the best human resources in the world. A Foreign National (other than a citizen of Pakistan or Bangladesh) or an entity incorporated outside India (other than entity incorporated in Pakistan or Bangladesh) can invest and own a Company in India by acquiring shares of the company, subject to the FDI Policy of India. Also, a minimum of one Indian Director who is a Indian Director and Indian Resident is required for incorporation of an Indian Company along with an address in India. IndiaFilings can help you register an Indian Subsidiary while also providing Nominee Directors and Registered Office service in India.

India entry strategies for foreign corporates

The following are some of the India entry strategies for foreign corporates:

Private Limited Company

Incorporation of a private limited company is the easiest and fastest type of India entry strategy for foreign nationals and foreign companies. Foreign direct investment of upto 100% into a private limited company or limited company is allowed under the automatic route, wherein no Central Government permission is required. Hence, incorporation of a private limited company as a wholly-owned subsidiary of a foreign company or joint venture is the cheapest, easiest and fastest entry strategy for foreign corporations into India.

Incorporation of a LLP

Incorporation of a Limited Liability Partnership (LLP) is also an India entry strategy for foreign nationals or foreign citizens as 100% FDI in LLP is now allowed. An LLP, however, cannot have shareholders and must be represented by Partners - thereby making it an ideal choice for investment vehicles and professional firms.

Proprietorship or Partnership Firm

Proprietorship firms or Partnership firms are the most basic types of business entities used by tiny businesses or unorganised players. Foreign investment into a proprietorship firm or partnership firm requires prior RBI approval. Hence, proprietorship firms or partnership firms are not suitable for a foreign corporation or foreign national investment into India.

Proprietorship or Partnership Firm

Registration of Branch Office, Liaison Office or Project Office requires RBI and/or Government approval. Therefore, the cost and time taken for the registration of branch office, liaison office or project office for a foreign company are higher than the cost and time associated with incorporation of a private limited company. Further, foreign nationals cannot open a branch office, liaison office or project office and is permitted only for well established foreign corporates. Hence, this option is limited to being an India entry strategy only for large foreign companies.

FDI in Private Limited Company

Foreign Direct Investment (FDI) into an Indian Private Limited Company or Limited Company is allowed upto 100% in most sectors. Only a very few industries require prior Central Government approval for investment by a foreign company or foreign national. The following industries require Government Approval for investment by Foreign Company or Foreign National:

  1. Petroleum sector (except for private sector oil refining), Natural gas / LNG pipelines.
  2. Investing in companies in Infrastructure
  3. Defence and strategic industries
  4. Atomic minerals
  5. Print Media
  6. Broadcasting
  7. Postal Services
  8. Courier Services
  9. Establishment and operation of Satellite
  10. Development of Integrated township
  11. Tea Sector
  12. Asset Reconstruction Companies

Management and Shareholding Structure

A private limited company must have a minimum of two Shareholders and two Directors. A shareholder can be a person or a corporate entity. However, the Director has to be a person. Foreign nationals are allowed to become Directors of an Indian Private Limited Company.

The Board of Directors of the Indian Private Limited Company must have one Director who is both an Indian Citizen and Indian Resident. However, there is no requirement for the Indian Director to be a shareholder in the company. Hence, most foreign companies or foreign nationals prefer to incorporate a company in India with three Directors - two Foreign National Directors and one Indian National Director.

The 100% shares of the Indian Company can be held by a combination of Foreign Companies and/or Foreign Nationals. Indian private limited companies require a minimum of two shareholders mandatorily. Hence, one corporate entity or person cannot hold all the shares of an Indian Private Limited Company.

Obtaining Digital Signature for Foreign National Directors

A digital signature is required for filing the incorporation documents and continued compliance documents for a company. Hence, Digital Signatures must be obtained for one or more Director(s) of the company.

The following documents and information are required for obtaining Digital Signature for a foreign national:

Foreign national is residing in the native country

  • If native country is a signatory of Hague Convention: Proof of identity, address proof and photo on DSC application should be notarised by the Public Notary of that foreign country and apostilled by the competent authority of that foreign country.
  • If native country is not a signatory of Hague Convention: Proof of identity, address proof and photo on DSC application should be notarised by the Public Notary of that foreign country and consularized by the competent authority of that foreign country
  • Passport copy and application form with Photo (all attested).

Foreign national residing in India

The following documents should be certified by Individual's Embassy

  • Resident Permit certificate issued by Assistant Foreigner Regional Registration Officer, an officer of Bureau of Immigration India.
  • Passport
  • Visa
  • Application form with Photo (attested)

Name Approval

In parallel to the digital signature application process, name approval can be obtained for the proposed company. The name of the Indian Company must be unique and should end with the words "Private Limited". Click here to know more about Naming an Indian Private Limited Company.

Filing for Incorporation of a Private Limited Company

Once name approval is obtained, incorporation documents can be filed with the Ministry of Corporate Affairs to incorporate the company. The incorporation documents to be filed includes affidavits & declarations from Directors, Memorandum of Association, Articles of Association and Registered Office Address proof.

The affidavit and declarations from the Directors contain certain declaration from the Directors. Affidavit and declaration would have to be executed independently for each of the Director and notarized.

Memorandum of Association (MOA) & Articles of Association (AOA)

By subscribing to the MOA & AOA, the shareholders (either foreign companies or foreign nationals or Indian companies or Indian national) show their intention for becoming a shareholder in the company to be incorporated.

In case a Foreign Company is a subscriber to the MOA & AOA of the proposed Indian Company, the following documents pertaining to the foreign entity subscribing to the shares of the Indian Company must be submitted:

  • Board resolution of the Foreign Entity authorising investment in shares of the Indian Company.
  • Copy of the certificate of incorporation of the foreign entity.
  • Copy of address proof for the foreign company.

On submitting the above documents along with the application for incorporation of a company, the Registrar would issue a Certificate of Incorporation for the Indian Private Limited Company, if the documents submitted are acceptable.

After obtaining the incorporation certificate, the Indian Company can apply for a PAN Card and take the necessary steps for opening a bank account for the company in India. IndiaFilings has exclusive relationships with various leading banks in India, including ICICI Bank, DBS and Citi Bank. We can help you seamlessly open a Business Current Account post-incorporation of the company - without having to visit India.

Company Name Availability

Companies Act, 2013 does not permit registration of identical or similar names

9 Articles to Read Before Indian Subsidiary

Pay as you go grow pricing

All Inclusive Pricing - No Hidden Fee

Basic

29899

all inclusive fees

  • 3 Class 2 Digital Signatures 1
  • 2 Director Identification Numbers
  • 1 RUN Name Approval 2
  • Upto 10 Lakhs Authorized Capital 3
  • Incorporation Fee
  • Stamp Duty 4
  • Incorporation Certificate
  • Citi Bank Current Account
  • PAN & TAN
  • 50+ Document Formats
  • Incorporation Kit
  • Hard-copy Share Certificates
  • GST Registration
  • Premium LEDGERS Accounting Software 5
  • GST eWay Bill Software

Premium

79899

all inclusive fees

  • 3 Class 2 Digital Signatures 1
  • 2 Director Identification Numbers
  • 1 RUN Name Approval 2
  • Upto 10 Lakhs Authorized Capital 3
  • Incorporation Fee
  • Stamp Duty 4
  • Incorporation Certificate
  • Citi Bank Current Account
  • PAN & TAN
  • 50+ Document Formats
  • Incorporation Kit
  • Hard-copy Share Certificates
  • GST Registration
  • Premium LEDGERS Accounting Software 5
  • GST eWay Bill Software
  • FDI Reporting to RBI
  • Commencement of Business Certificate
  • Bookkeeping
  • Financial Statement Preparation
  • Annual Report
  • Director's Report
  • Board Resolution Preparation
  • MCA Annual Return Filing
  • Income Tax Return Filing
  • 1 Year Dedicated Compliance Manager Support
  • Trademark Registration
  • Class 2 digital signatures with 2 year validity on secure USB token.
  • Upto 4 name options can be given in 1 RUN name approval request.
  • Authorised capital is the amount of shares a company can issue at anytime and can be increased further in the future. Paid-up capital is the amount invested by shareholder and can be even Rs.2.
  • In case of Rs.10 lakh authorised capital, stamp duty of Rs.5120 (on actuals) will be chargeable extra for the state of Gujarat. Rs.5510 will be the additional stamp duty charges for state of Rajasthan. In case of incorporation in Madhya Pradesh, an additional stamp duty of Rs.7550 will be applicable. In case of incorporation in Punjab, an additional stamp duty of Rs.15025 will be applicable. In case of Kerala, an additional stamp duty of Rs.3025 will be applicable.
  • Premium LEDGERS Accounting Software with GST Portal Integration and eWay Bill Software.
  • Statutory Auditor fee is payable on actuals directly to the Independent Auditor appointed by the Board of Directors. IndiaFilings will only be responsible for accounting, preparation of financial statements and filing of returns on behalf of the Company.

Indian Subsidiary Bank Account Opening

ICICI Logo

Open a new or link your existing ICICI bank current account with LEDGERS for seamless bank account reconciliation, account balance check and sending of payments through NEFT / RTGS / IMPS.

Open a new or link your existing DBS bank business account with LEDGERS for seamless bank account reconciliation, account balance check and sending of payments through NEFT / RTGS / IMPS.


Bank Account Opening

Opening a current account for an India Subsidiary is easier when compared to opening of current account for a sole proprietorship firm as a company is a registered legal entity – recognized by law. Therefore, once a company is incorporated, a bank account can be opened in the name of a company with the incorporation certificate of the company and identity/address proof of the Directors.

How many people are required to incorporate a private limited company?
To incorporate a private limited company, a minimum of two people are required. A private limited company must have a minimum of two Directors and can have upto a maximum of fifteen Directors. A minimum of two shareholders and a maximum of upto 200 shareholders are allowed in a private limited company.
What are the requirements to be a Director?

The Director needs to be over 18 years of age and must be a natural person. There are no limitations in terms of citizenship or residency. Therefore, even foreign nationals can be Directors in a Indian Private Limited Company.

What is the capital required to start a private limited company?

You can start a Private Limited Company with any amount of capital. However, fee must be paid to the Government for issuing a minimum of shares worth Rs.1 lakh [Authorized Capital Fee] during the incorporation of the Company. There is no requirement to show proof of capital invested during the incorporation process.

Is an office required for starting a Private Limited Company?

An address in India where the registered office of the Company will be situated is required. The premises can be a commercial / industrial / residential where communication from the MCA will be received.

Do I have to be present in person to incorporate a Private Limited Company?

No, you will not have to be present at our office or appear at any office for the incorporation of a Private Limited Company. All the documents can be scanned and sent through email to our office. Some documents will also have to be couriered to our office.

What are the documents required for incorporation?

Identity proof and address proof is mandatory for all the proposed Directors of the Company. PAN Card is mandatory for Indian Nationals. In addition, the landlord of the registered office premises must provide a No Objection Certificate for having the registered office in his/her premises and must submit his/her identity proof and address proof.

How long will it take to incorporate a Company?

IndiaFilings.com can incorporate a Private Limited Company for in 7-15 days. The time taken for incorporation will depend on submission of relevant documents by the client and speed of Government Approvals. To ensure speedy incorporation, please choose a unique name for your Company and ensure you have all the required documents prior to starting the incorporation process.

What do I need to quickly incorporate my Company?

To incorporate a Company quickly, make sure the proposed name of the Private Limited Company is very unique. Names that are similar to an existing private limited company / limited liability partnership / trademark can be rejected and additional time will be required for resubmission of names.

How long is the incorporation of the Company valid for?

Once a Company is incorporated, it will be active and in-existence as long as the annual compliances are met with regularly. In case, annual compliances are not complied with, the Company will become a Dormant Company and maybe struck off from the register after a period of time. A struck-off Company can be revived for a period of upto 20 years.

What is a Digital Signature Certificate?

A Digital Signature establishes the identity of the sender or signee electronically while filing documents through the Internet. The Ministry of Corporate Affairs (MCA) mandates that the Directors sign some of the application documents using their Digital Signature. Hence, a Digital Signature is required for all Directors of a proposed Company.

What is Director Identification Number (DIN)?

Director Identification Number is a unique identification number assigned to all existing and proposed Directors of a Company. It is mandatory for all present or proposed Directors to have a Director Identification Number. Director Identification Number never expires and a person can have only one Director Identification Number.

What is authorized capital fee?

Authorized capital of a Company is the amount of shares a company can issue to it shareholders. Companies have to pay the Government an authorized capital fee to issue shares in a Company. Companies have to pay authorized capital fee for a minimum of Rs.1 lakh.

What are the statutory compliances required for a Private Limited Company?

A private limited company must hold a Board Meeting atleast once in every 3 months. In addition to the Board Meetings, an Annual General Meeting must be conducted by the Private Limited Company, atleast once every year.

Can NRIs / Foreign Nationals be a Director in a Private Limited Company?

Yes, a NRI or Foreign National can be a Director in a Private Limited Company after obtaining Director Identification Number. However, atleast one Director on the Board of Directors must be a Resident India.

Can NRIs / Foreigners hold shares of a Private Limited Company?

Yes, NRIs / Foreign Nationals / Foreign Companies can hold shares of a Private Limited Company subject to Foreign Direct Investment (FDI) Guidelines.

What are FDI Guidelines for Foreigners in a Private Limited Company?

100% Foreign Direct Investment is allowed in India in many of the industries under the Automatic Route. Under the Automatic Route, only a post-investment filing is necessary with the RBI indicating the nature of investment made. There are a few industries that require prior approval from the RBI, in such cases, approval must first be obtained from RBI prior to investment.

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