Foreign Subsidiary Company Registration in India
- Pros and cons
- Incorporation of a foreign subsidiary company in India
- Documents Required
- Registration Process
Foreign Subsidiary Company – meaning
A foreign subsidiary company is an organization where its shares are partly or fully owned by another company that is incorporated in another nation. If it has called the foreign subsidiary company in India, then it has incorporated in India
The main reason to establish a subsidiary company in other countries is to expand the business, obtain benefits from the laws of that particular country, increase their revenue. As OFX group study states that 96% of US business feels confident in conducting business overseas.
Pros and cons of a Foreign Subsidiary Company
- Establishing a foreign subsidiary helps them to enter the local markets to promote their products and services.
- The company gets access to resources in that particular country like eg, Japan has a good technology facility which attracts foreign companies to invest.
- Helps in the growth of the business which is another way that might not be possible in its home country due to high competition and also setup business with local ventures.
- The registration process is made much easier for foreign subsidiary companies. Includes tax benefits.
- Setting up a subsidiary company can be costlier. They might have to face some political and economic challenges.
- It is not suitable for medium or small-sized companies. This can lead to double taxation.
- Incorporation of the foreign subsidiary company in India.
- The foreign subsidiary company can be a partly owned subsidiary or wholly-owned subsidiary (WOS).
- India creates a profitable environment for foreign countries to expand themselves. It is important for foreign companies to understand and follow the rules as stated.
- Process of incorporation is done as per sec 7 of Company Act 2013 and rule 38 of Company (incorporation) rules 2014 explains about SPICE+ form
- The company must read all the points before starting the registration process.
Documents Required For Registration of Foreign Subsidiary in India
- Name of the company
- Name of the directors
- Name of the nominee
- ID proof
- Address proof
- All the foreign documents must be translated to English and apostilled and notarized.
- DIN of the proposed director.
- Digital signature
- MOA and AOA (e- MOA and AOA is not allowed)
- Copy of utility bill (eg bank statement not less than 2 months)
- PAN (if not apply for it)
- Designation. Now let’s know how a foreign subsidiary company is Registered.
Registration of Foreign Subsidiary in India.
Go to the MCA website, log in or create a new account and then select SPICE+, which has 2 parts
Part 1:- Approval of name
The company has to provide details about
- Type of company
- Class of company
- Objective of company
- Category of the company etc.
- Proposed name for the company
- If a company uses a coined word or registered trademark, it should submit NOC from the foreign company, copy or charter of a foreign company, copy of trademark registration document which should be duly apostilled and notarized.
- If a company uses its original name it should add ' India' at the end of the name. After that ₹1000 should be paid and within 20 days you will receive a certificate of approval.
- The company has to upload some documents such as the name of the representative, director's name, ID proof, copy of the charter of the foreign company, name of the nominee, etc., which should be apostatized and notarized.
- The company has to prepare MOA and AOA physically and submit it, DIR-2, a declaration from NOC, address proof, copy of utility bill(not less than 2months), the digital signature of any one member should be apostilled and notarized.
- It should fill INC-9, which is a declaration given by the director. It should apply to EPFO, ESIC, GST(optional), and a bank account through AGILE PRO.
- After filling in all the details and attaching files save and proceed to pay. All the requirements are satisfied, you will receive an incorporation certificate from the Ministry of corporate affairs (MCA).