The document provides information on setting up a foreign company subsidiary in India. It discusses the options of a private limited company or LLP, the minimum requirements for each, and outlines an 8 step process for company registration that includes obtaining necessary approvals and compliances. Key points covered are selecting an acceptable company name, preparing required documents such as MOA and AOA, and post-incorporation formalities like opening a bank account and filing necessary registrations.

1. Indian Entry Strategy :
Foreign Company Registration in India

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4. MEANING – FOREIGN SUBSIDIARY (WOS)
▪ A subsidiary is a company with voting stock (that is more than 50%)
controlled by another company, usually referred to as the parent
company or the holding company.
▪ A wholly owned subsidiary is a company whose common stock is
100% owned by another company, the parent company. A wholly
owned subsidiaries retain legal control over operations, products, and
processes.
▪ If a foreign subsidiary is incorporated in India, it has to follow the
applicable laws in India.

5. SELECTING THE TYPE OF COMPANY
Entities in which FDI is Not
allowed
Entities where FDI is
Allowed
Remarks on allowance
Proprietorship LLP Investment in LLP’s is
allowed, but it requires
prior approval of the RBI.
Partnership Private limited Fastest route
One Person Company Public Limited If Parent wants to list or
publicly trade on stock
exchange in India.
• According to FEMA guidelines, Foreign Direct Investment (FDI) allowance is as per
below Chart
• The easiest and fastest way set up a business in India by NRI’s and Foreign
Nationals/entities is through incorporation of a Private Limited Company.

6. ▪ A foreign company can set up a wholly owned subsidiary in India to engage in
business activities permitted under India’s FDI policy.
▪ In addition, two directors are required, with one of them being an Indian resident.
▪ Income tax is
▪ Surcharge on Income Tax
▪ Dividend Distribution Tax is 20.56%
Company Turnover Below 250 Cr. Turnover Above 250 Cr.
WOS (Foreign Company) 25% 30%
Company Profit less than
1cr.
Profit in range of 1-
10 cr
Profit above 10 cr
WOS (Foreign Company) Nil 7% on Tax 12% on Tax
OPTION 1 : PRIVATE LIMITED

7. OPTION 2 : LLP
▪ In India, an LLP is structured as a hybrid entity, with the advantages of a company (since it
is a separate legal entity with ‘perpetual succession’) and at the same time enjoying the
benefits of organizational flexibility associated with a partnership structure. At least two
designated partners are required, of which one needs to be an Indian resident.
• Taxation at the rate of 30% is applicable on LLPs
• No tax is levied on distribution of profits as dividends to partners, unlike in the case of a
company where Dividend Distribution Tax (DDT) is applicable on repatriation.
• Foreign investment in LLPs is permitted in sectors where 100% FDI is permitted under the
automatic route without any performance-linked conditions.

8. MINIMUM REQUIREMENTS
▪ Capital: There is no minimum capital required to form a Private Limited Company
in India. Though it is always advisable to have a company with 10 lacs authorised
capital.
▪ Directors: Minimum two directors are required to incorporate a Private Company
in India. Both should be individuals and at-least one of whom should be a resident
of India.
▪ Shareholders: Companies Act, 2013 requires that a Private Limited Company have
a minimum of two shareholders. There is no condition for residential status of
shareholders. Shareholders can be either individuals or entities or a combination
of both.

9. DOCUMENTS SIGNING
▪ In the documents are signed outside India, then the same have to be notarized by a
Public notary of the residence country and consularized or apostilled by the competent
authority, as the case may be.
▪ If the documents are signed in India, then copy of Visa and stamped passport, proving
his/her presence in India at the time of signing is required.
▪ If the subscriber is a foreign entity, then the Incorporation documents should be
signed by the representative of the foreign entity. An Authorization Letter duly stating
the name of the Authorized Person and the number of shares subscribed should be
notarized, consularized or apostilled, as the case may be in the home country of the
subscriber company.
▪ If a foreign company is incorporating its subsidiary company in India, then 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.

10. The first step towards Foreign Company Registration in India is applying for the DSC
(Digital Signature) and DIN (Director’s Identification Number) of the Directors.
1) Apostille / Notarized copy of resolution of foreign Company ‘mentioning the name of
authorized representative, no. of subscription of shares’.
2) Apostille/ Notarized copy of Charter of Foreign Company.
3) Apostille/ Notarized copy of ID Proof of authorized representative,
I. Proof of Identity (PAN for Indian Nationals and Copy of Passport for Foreign
Nationals)
II. Copy of Driving License, Bank Statement or any utility bill (not older than two
months)
III. Residence permits for foreigners, if residing in India.
IV. Passport size photograph
4) Name of Nominee (in case of incorporation of WOS)
STEP 1: OBTAINING DIN & DSC

11. STEP 2: NAME APPROVAL
▪ Selecting a unique and acceptable name for the proposed Company is one of the
important steps in the whole Incorporation process.
▪ The name should be in consonance with the Object of the Company and should not be
identical to existing entities or Undesirable by Law.
▪ In case if Name of Foreign company is to be used with (India) then foreign company
has any trademark registered than copy of that trade mark is required and NOC from
company to use the name.
▪ No Re-submission of application is allowed in case of reservation of Name. The
application either Approved or Rejected.
▪ Reserved name shall be valid for 20 days in case of allotment of name for New
Company.

12. STEP 3: PREPARATION OF DOCUMENTS
1. Memorandum of Association of Company – (Physical copy of MOA shall be
prepare Duly apostille or notarized in country of origin).
2. Article of Association of Company – (Physical copy of AOA shall be prepare Duly
apostille or notarized in country of origin).
3. INC-9 Affidavit / declaration by first subscriber(s) and director(s) (Duly apostille
or notarized in country of origin).
4. DIR-2 declaration from first Directors along with Copy of Proof of Identity and
residential address. (Duly apostille or notarized in country of origin).
5. Declaration from the foreign subscribers in respect of not having PAN. (Duly
apostille or notarized in country of origin)

13. STEP 3: CONTINUE…
6. NOC from the owner of the property where company is to be registered.
7. Proof of Office address (Conveyance/ Lease deed/ Rent Agreement etc. along with rent receipts);
8. Copy of the utility bills (not older than two months)
9. In case of subscribers/ Director does not have a DIN, it is mandatory to attach: Proof of identity and
residential address of the subscribers (Duly apostille or notarized in country of origin)
10. Digital Signature with only one Subscriber is enough for Incorporation of Company.
11. DIR-2 from the Resident Director along with self attested copy of PAN and resident.
12. Certificate from Chartered Accountant.

14. POST INCORPORATION FORMALITIES
Step –I: Open Bank Account to receive Subscription Money.
Step –II: Receipt of Subscription Money from Foreign Subscriber.
Step -III: Collect FIRC Certificate from the Bank as per FDI Guidelines.
Step IV: Issue Share Certificate to the subscribers.
Step V: File FCGPR with RBI as per FDI Guidelines.

15. Sr.
No.
Nature of Procedure in India 01-05 06-10 11-15 16-30 31-45 46-50 51-60 61 -70 71-80
1 DIN for Directors
2 DSC for Directors
3 Name Approval
4 MOA and AOA Drafting
5 Assess stamp duties online
6 Filling of Documents and forms
7 Certificate of incorporation
8 Commencement Certificate
9
Register under Shops and
Establishment Act
10
Register for GST in the ward in which
the company’s office is located
11 Register for Profession tax
12
Register with Employees' Provident
Fund Organization
13 Register with ESIC
14
Filing for Government Approval before
RBI/FIPB for Foreigners and NRI's
Timelines are shown below in Gantt chart with expected end date
TIMELINES

16. COMPLAINCES
We provide comprehensive support and services for all your compliance needs
• TDS Compliances
• Payroll Processing (ESIC & EPF)
• Compliances under GST Act
• RBI Compliances
• Internal Auditing
• Accounting and fillings
• Income Tax Fillings
• FEMA Compliances as per FEMA
Act
• Statutory Audits under various
laws (GST, Income Tax, Company
Act)
• DGFT (Director General of Foreign
Trade) compliances

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