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India is now a hub of Foreign Investment. Many Popular Companies including Tesla, Apple, Samsung etc have announced their projects in India. By considering this, India’s policy of FDI (Foreign Direct investment) has been made flexible. Foreign subsidiary or foreign company in India is incorporated by MCA (Ministry of Corporate affairs) under rules & act of foreign subsidiary under companies act 2013.

Investment in India can be done in by incorporating a foreign company in India. Documentation requirement & Conditions for foreign company registration in india are very flexible for Investors.

Meaning of Foreign subsidiary as per Company act-2013

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What is subsidiary company

As per Indian Company Act, subsidiary refers to the company in which more than 50% voting rights and shareholding rights is held by another company or person. If that right is held by any foreigner to India, then it is called foreign subsidiary. Indian company in which owns 100% Shares is owned by foreign company is called wholly owned subsidiary in india or subsidiary companies.

FDI limit for foreign companies in India

Government have allowed upto 100% foreign Direct investment in many sectors. Like if any foreign company want to invest in india, then there are different FDI Limit for different sector in which foreign company can invest. These limits are-

Sector	FDI limit %
Agriculture	100%
Plantation like Tea, coffee	100%
Petroleum & natural gas	49%
Defence	49%
Mining	100%
Broadcasting	100%
Civil construction	100%
Banking	74%
Insurance	49%

There are many other sectors in which foreign direct investment are allowed upto the prescribe limit. So if any foreign company is planning to invest in India it have to incorporate a foreign companies in India.

Procedure for incorporating foreign company in India

Before the foreign company incorporation in India, there is minimum requirement which needs to be completed-

• Foreign company will need a director resident in India. Resident is the person who spent 182 days in India in a previous financial year.
• Foreign company will need a business place in India. This place will work as a communication address for company.
• Foreign Company will need an Indian representatives who will work as a Company Representatives in MCA for setting up a company in india

Steps to incorporate a foreign company-

Step-1) Name Approval- The main task of foreign company formation in india is getting Its Name approved from MCA. Name should be unique and not similar to existing registered company. Foreign company can mention “India “in Name like Tesla & PUBG picked like this-

• Tesla India Motors & Energy private Limited
• PUBG India Private Limited

Step-2) Obtaining DIN & DSC of Directors- Primary documents which are required for DIN & DSC are-

1. Proof of identity ( Aadhar/ Voter id for Indian director & Passport for Foreign Nationals)
2. Copy of driving license/pan card & Bank statement/ Utility bill ( latest)
3. Residence permit of foreigner if residing in India
4. Passport size photo of Director
5. Address proof of Director of foreign companies seeking indian representatives

On receiving These Documents, we will prepare your digital signatures & apply for Director identification Number (DIN) which will be needed in foreign company incorporation.

Step-3) Preparation of (MOA) Memorandum Of association of Foreign  company

MOA represent the charter of the company. It is a legal documents which is prepared during incorporation of company. It specifies the objectives of the company. Company scope of work is limited to its MOA. So it is prepared by keeping many points in mind and all the projects of company. Further amendment is possible in MOA after incorporation.

Step-4) Preparation of AOA (Article of association)

Every company needs internal rules & regulations for conduct of its business. AOA is a set of rules & regulations to manage its internal affairs. AOA empowers Board of directors to take decisions on behalf of company so it is prepared with mutual consent with investors. Amendments in AOA also possible.

Step-5) Subscriber of MOA of foreign companies in India can be both-

• Foreign Individual
• Foreign Company

In case, subscriber to memorandum of association of company in India is foreign company, then additional documents requirements-

1. Board resolution of foreign company which is subscribing MOA. This board resolution must authorize it company for investment in shares of Indian company.
2. Certificate of incorporation of foreign company
3. Copy of address proof of foreign company.

In case, subscriber to MOA of foreign company is foreign individual, than documents requirement are-

1. If the documents are signed outside India, then the same have to be notarized by a public notary officer of foreign National’s country and recommended by the competent authority, as the case may be
2. If the documents are signed in India, then copy of visa and stamped passport as a proof of his/her presence in India shall be attached.

After submitting all the above documents, registrar of company in India will perform the scrutiny of the documents and registrar will issue a certificate of incorporation in India with CIN No., PAN & TAN Number of international companies in india.

Gst Registration of Foreign Company & other registration requirement will also be completed after issuance of PAN.

Authority Compliances other than MCA-

Foreign Investment in India is regulated by FEMA Guidelines & RBI rules & regulations. After receiving foreign fund for company, we have to report RBI within 30 days.

Certificate from Company secretary & Chartered accountant in India is also attached for Compliance of FDI scheme & share pricing for foreign investor.

Auditor (Chartered Accountant) shall also be appointed within 30 Days of incorporation of Company.

Team Tax advisory have Qualified & experienced experts like Chartered Accountant and company secretary who will help in Incorporation of Companies in India & post incorporation Compliance.  So with Tax advisory, you have foreign company incorporated on your fingertips & you won’t have to worry about Post Incorporation Compliances in India. You Can Contact us on Taxadvisory@gmail.com for fast processing of Incorporation of foreign Company.

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