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Foreign Subsidiary Company In India


A foreign subsidiary is a company, where more 50% of its equity shares are owned by a company that is incorporated in foreign nation. The foreign company will be called as holding company or parent company of the subsidiary company.
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Overview

When a foreign company wants to expand its operations in other countries, they go for Incorporating a subsidiary of their foreign entity. India is worlds hub for software development. Many multinational companies have incorporated their subsidiary company in India.

For an organization to be a foreign subsidiary in India, the organization itself must be incorporated in India. It doesn't matter which country the parent company is incorporated in.

The subsidiary must follow the laws of the country where it's incorporated and operates. Hence, if an overseas company is incorporated in India, then it needs to follow the applicable laws in India.

Incorporating foreign subsidiary in India attracts some RBI (Reserve Bank of India) Compliances because the investment that is coming from foreign nation will be treated as Foreign Direct Investment (FDI).

Foreign Direct Investment is not allowed in case of Proprietorship firm, Partnership firm, and One Person company. FDI is allowed in Limited Liability Partnership, but it required preapproval from the RBI.

Hence, Private Limited Company is the best suited entity type for NRI’s and Foreign nationals to start a subsidiary company in India. It is the easiest and fastest way of setting up a subsidiary in India.



Benefits of Foreign Subsidiary Company

Access to New Markets

Setting up an overseas subsidiary establishes a legal entity in another country. Legal entities can market their products and services to the local population. They can also import and export goods and services

More Affordable Options for Manufacturing

In certain markets like India, setting up a foreign subsidiary can give you access to lower costs for goods and labor. Hence making the production cost of each product or services will be low, comparatively with the parent companies country.

Access to Technical Skills

Many foreign countries – increasingly in Asia – provide great access to advanced technology and new ways of thinking about technical issues. For example, India offers a high level of technical knowledge that continues to attract foreign investment.

Access to Local Knowledge

By establishing a legal entity in a foreign country, a business can make new business relationships with local partners and set up joint ventures that take advantage of localized knowledge.

Checklist For Incorporation Of Foreign Subsidiary In India

Basic Requirement

Documents Requirement

From Parent entity
1. Incorporation Certificate
2. MOA and AOA
3. Board Resolution

For Each Director and shareholder
1. PAN card* (Mandatory for Indians & others if held)
2. Passport* (for NRI, Foreigners, and Indians if held)
3. Address proof (any 1 of) (Not more than 2 months old)
  a. Bank Statement
  b. Phone Bill
  c. Mobile Bill
  d. Electricity Bill

(Note - For NRI & Foreigners Documents issued by foreign authorities or signed outside India must be notarized & apostilled)

For Registered Address
  1. NOC from Owner*
  2. Rent Agreement*
  3. Utility Bill*

Process of Incorporating a Foreign Subsidiary in India

Step 1: Application for DSC (Digital signature certificate) and DIN (Directors Identification Number)

Step 2: Board Resolution of foreign company

Step 3: Apply for the Name reservation

Step 4: Drafting & filing MOA & AOA to register the private limited company

Step 5: Apply for the PAN and TAN of the company

Step 6: Issue Certificate of Incorporation along with PAN and TAN of the company

Key Deliverables

a. DSC of directors and shareholders

b. PAN and TAN number

c. Certificate of incorporation

d. MOA & AOA of the company

Foreign Subsidiary Company incorporation

Why Choose Us

  Entrepreneur Friendly

We make the process so easy and fast that you will not even feel the headache of all the paperwork, and our professionals will provide you all the promised deliverable within a given span of time.

  Experienced Professionals

All our professionals are qualified and specialized in that particular work. Making sure no mistakes are done at the time of filings with the authorities so that company won’t have to pay any penalties due to mistakes.

  One Stop for All Your Requirements

We support you throughout the journey of your business, from the incorporation, Accounting and taxation support, Secretarial compliance support, and Legal support.

  Cost-Effective

We believe that cost plays a vital role in any company’s growth stage, that’s why we do not surprise our clients with hidden charges, you pay what you see in the initial proposal.


Frequently Asked Questions


What is a DSC and DIN?
DSC (Digital Signature Certificate) is an instrument (pen drive) issued by the certifying authorities by which you can sign e-documents. To file the incorporation related documents and other filings with MCA or income tax department DSC is mandatory.
DIN (Director Identification Number) is a mandatory document for all the directors of a company. it is an 8-digit unique identification number allocated to a director. This has a lifetime validity.
“India” can be used by foreign company which is incorporating its subsidiary company in India. The original name of the holding company as it is may be allowed with the addition of word “India” or name of any Indian state or city, if otherwise available. The words “Global” “International” can be used in the name of an Indian company.
Once the foreign subsidiary is incorporated, the following processes needs to be followed.
  1. Commencement of business certificate
  2. FC-GPR filing for the for the foreign investment that has come to India
  3. Applying for required licenses and registration which is completely depending on the nature and scale of the business.