Indian Subsidiary in West Bengal
Setting up an Indian subsidiary in West Bengal can be a transformative step for expanding your business operations and accessing one of the world's largest and most dynamic markets. At IndiaFilings, we specialise in providing comprehensive and tailored services for incorporating an Indian subsidiary. Our team of experts is here to guide you through the complexities of Indian subsidiary registration, from understanding the legal requirements and navigating regulatory approvals to assisting with compliance and documentation. Partner with us for setting up a subsidiary in West Bengal and unlock India’s vast business potential to drive your company's growth and success in this vibrant region.
Subsidiary Company
A subsidiary company is often referred to as a sister company, while the company that exercises control over it is known as the parent company or holding company. The parent company holds the authority to control the subsidiary company, either in part or entirely. The registration process for an Indian subsidiary is governed by the Companies Act of 2013. According to the Companies Act of 2013, a subsidiary company can be defined as a company in which a foreign corporate body or parent entity holds a minimum of 50% of the total share capital. Essentially, the parent company exerts a significant influence and control over the subsidiary company.
Types of Subsidiaries in India
In India, there are two primary categories of subsidiaries:
- Wholly-Owned Subsidiary: In a wholly-owned subsidiary, the parent company possesses 100% ownership of the subsidiary's shares. However, it's important to note that wholly-owned subsidiaries can only be established in sectors that permit 100% Foreign Direct Investment (FDI).
- Subsidiary Company: In this category of subsidiary, the parent company owns 50% of the subsidiary's shares.
Before proceeding with establishing an Indian subsidiary, obtaining approval from the Reserve Bank of India is a crucial prerequisite. This regulatory step ensures compliance with the country's foreign investment regulations and safeguards the interests of all stakeholders involved.
Advantages of Indian Subsidiary
There are several compelling advantages associated with setting up an Indian subsidiary.
India’s competitive environment offers a plethora of investment opportunities that attract foreign entrepreneurs to establish their subsidiary in the country, especially in West Bengal.
- Entry into the booming Indian market
- 100% Foreign Direct Investment (FDI) permitted in certain sectors
- Perpetual succession ensuring continuous operations
- Limited liability protecting personal assets of shareholders and directors
- Opportunity for diversification in business operations
These are the major advantages of getting an Indian subsidiary and establishing a company in West Bengal.
Requirements and Key Facts about Company Registration in India
Here are the essential elements to consider for the incorporation of an Indian subsidiary:
- Unique company name distinct from existing businesses
- Parent company can hold 100% shares or collaborate with two foreign nationals
- No minimum capital requirement for company registration in India
- A minimum of two directors with at least one Indian resident
- Mandatory registered address recorded in government records
How to Register an Indian Subsidiary?
Incorporation of an Indian subsidiary involves several key steps and compliance requirements. Here's a step-by-step guide on how to register an Indian subsidiary:
- Determine the type of company you want to establish
- Obtain Digital Signature Certificate (DSC) for directors
- Apply for a Director Identification Number (DIN)
- Choose a unique name and apply for approval through MCA
- Draft Memorandum of Association (MoA) and Articles of Association (AoA)
Taxation of Indian Subsidiary
Indian subsidiary companies are subject to specific taxation policies:
- Taxes on all income earned within or outside India
- 50% tax rate for royalty from the government or Indian entity
- Surcharge applied based on income brackets
- 4% health and education cess added
How IndiaFilings Can Assist with Indian Subsidiary
Still unsure how to register an Indian subsidiary? IndiaFilings simplifies the registration process by offering comprehensive support at every step. From selecting a unique name and obtaining essential Director Identification Numbers (DIN) and Digital Signature Certificates (DSC) to assisting with PAN and TAN applications and setting up a dedicated company bank account, we streamline the entire registration process. With IndiaFilings as your partner in West Bengal, you can confidently and efficiently start your Indian Subsidiary application.