Setindiabiz Team |Updated : September 5, 2024

Indian Subsidiary Company registration of a Foreign Corporation

Overview : In India, foreign companies are permitted to incorporate their subsidiary company in India without requiring any approval from the government in most sectors. However, certain documentation requirements need to be fulfilled to incorporate a foreign company subsidiary in India. The blog comprehensively covers essential documents required for the incorporation of a foreign subsidiary in India.

A foreign company can incorporate a Subsidiary company in India without obtaining any prior approval from the government of India in most of the sectors. To check whether your business activity is covered under automatic route or not, kindly refer to the attached .pdf files, one is about the sectors in which automatic route is not available while other one is a list of sectors where automatic route of FDI is allowed but subject to certain conditions. Kindly get back to us in case you need assistance on this.

• Sectors Under Automatic Route With Conditions
• Sectors Where Government Approval is Required

We are discussing on documentation for a scenario where a foreign company wishes to establish an Indian Subsidiary as a private limited company. The documentation can be classified in three categories for easy understanding.

Basic Documents of Foreign Company

With respect to the holding company, we shall need copies of the below-mentioned documents attested by the secretary or CEO of the foreign company;

• The foreign company certificate of incorporation,
• Memorandum of Association & Articles of Association or charter
• Current address proof of the foreign company.
• List of shareholders along with their Address, passport No & shareholding
• List of Director Address, passport No. & shareholding

Promoter of The Indian Company

In India, a minimum of two persons is required to act as promoters of the Indian company and have to continue to hold shares until the company is in existence. The foreign company can be one shareholder and there has to be another person/legal entity to hold atleast one equity share so that the number of promoters is two.

In case, the promoters are individuals then they can physically sign statutory documents on their own, however in case of the company being one of the promoters then the following documents are required.

• Copy of the board resolution passed at the meeting of the board of directors of the foreign company clearly stating the intention to establish a subsidiary company in India, its proposed name, the person authorised on behalf of the foreign company to represent the same in India and specific mention of capital structure of the Indian company & how much shares is being subscribed by the foreign company in Indian Company.
• Power of Attorney in the name of an authorised representative of the foreign company duly executed by the foreign company
• Copy of Passport of the Authorised Representative of foreign company & another promoter
• Copy of Address Proof of the Authorised Representative of foreign company & another promoter
• Color Photograph of the Authorised Representative of foreign company & another promoter
• Signature on the last page(s) of MOA & AOA of the proposed company, also known as subscriber sheet where apart from other particulars, the shares subscribed are also mentioned.

Director of the Indian Company

Two directors are needed out of which one shall always be a resident in India. A person who stays in India for more than 182 days during a financial year is known as a resident of India. With respect to directors following documents are required;

• In case of foreign National: Copy of Passport, any government-issued Address proof, and Colour photograph; all duly attested
• In case of an Indian National: Copy of PAN Card, Identity proof ( any among Passport/Aadhar Card/Voter ID Card/ Driving License) & address proof (any one among telephone bill/bank statement/utility bills like electricity, water or gas)
• Signature on statutory forms, declarations, and affidavits.

Statutory Forms

As per this Act, the Central Board of Direct Taxes (CBDT) can give instructions to the subordinating authorities, such as the Commissioner of Income Tax and other departments within the Income Tax. These instructions offer clear guidance on interpreting and implementing the provisions of the Act.

Attestation Requirements

All documents that have foreign origin or a signature is placed outside India can be accepted in India only if it is either attested by the Indian High Commission / Embassy as the case may be or is Apostille in terms of the Hague Convention.

Business Visa

In case a promoter or representative of the foreign corporation visits India in person then the documents which he brings in original or the statutory forms on which he signs in India, there are no requirements of attestation /Apostille. However, color copy (two self-attested sets) of the Passport, Business Visa, and Immigration Stamp showing the date on which the foreign person entered in India is required.

Registered Address Proof

The company has to give a physical address to the Registrar of Companies (RoC) which shall be referred to as the registered office of the company. In case of the registered address, following documents are required;

• Premises proof in the form of latest Electricity Bill/Water Bill/Telephone Bill/Gas Connection Bill/Property Ownership papers/ Property Tax Payment Challans etc.
• No Objection Letter from the owner of the premises stating that he shall have no objection to the registration of a company at the said premises.

Charges: For incorporation of a subsidiary company of a foreign company Setindiabiz charges Rs. 15,000 as a professional fee in case all the directors are Indian, However, a sum of Rs. 10,000/- is billed as an additional fee for each foreign person/entity involved in the incorporation of the company. The government fee is on an actual basis, while there is a Service tax @ 15% on the professional fee.

Conclusion

To sum up, setting up or incorporating a subsidiary of a foreign company in India can be done without requiring any approval from the government, in most sectors. There are prescribed documentation requirements and basic eligibility to incorporate foreign subsidiaries in India. We hope the detailed documentation requirements provided in this blog will prove valuable for you.