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Indian Entry Strategy:Foreign Company Registration in India

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All you need to know about #ProvidentFund and #Employee State #Insurance. Check out the details about how to create a Foreign #Subsidiary in India. #foreign #ForeignSubsidiary #WOS #proexadvisors #SteeringAhead #proexfamily #PrivateLimited – PowerPoint PPT presentation

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Title: Indian Entry Strategy:Foreign Company Registration in India


1
Indian Entry Strategy Foreign Company
Registration in India
2
industry experience and a broad spectrum of
technical skill sets that
  • We represent the finesse and

vividness of the art and science of consulting.
Our extensive expertise and Business Acumen
accelerates the growth of our clients in the
to leveraging and proven
best global Our
are vital
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fields of Finance, Management, Information Technol
ogy, and
members include individuals with top-notch
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Marketing. Our goal is to guide our
clients to steer ahead of the
holder such as Chartered Company
Accountancy,
as the name Professional
competition and, suggests, achieve Excellence.
Secretaries, Tech Enciphers, Cyber Experts,
Visuals Artists and many more.
  • The ProEx team has in-depth

3
  • ProEx develops robust strategies to help clients
    transform their Performance in line with their
    business goals while optimizing their
    investments.
  • Our aim is to enhance your business
    capabilities and profitability through best
  • juncture is imperative to maximize the growth
    potential of an enterprise.
  • Having been associated with various

organizations, we possess the requisite exposure
to cater industry Best Practices".
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available Professional increasing their
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our own proprietary for identification of
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organizations evaluate their performance,
primarily through the analysis of existing
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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
  • According to FEMA guidelines, Foreign Direct
    Investment (FDI) allowance is as per below Chart

Entities in which FDI is Not allowed Entities where FDI is Allowed Remarks on allowance
Proprietorship LLP Investment in LLPs 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.
  • The easiest and fastest way set up a business in
    India by NRIs and Foreign Nationals/entities is
    through incorporation of a Private Limited
    Company.

6
OPTION 1 PRIVATE LIMITED
  • A foreign company can set up a wholly owned
    subsidiary in India to engage in business
    activities permitted under Indias FDI policy.
  • In addition, two directors are required, with one
    of them being an Indian resident.
  • Income tax is

Company Turnover Below 250 Cr. Turnover Above 250 Cr.
WOS (Foreign Company) 25 30
  • Surcharge on Income Tax

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
  • Dividend Distribution Tax is 20.56

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

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
  1. NOC from the owner of the property where company
    is to be registered.
  2. Proof of Office address (Conveyance/ Lease deed/
    Rent Agreement etc. along with rent receipts)
  3. Copy of the utility bills (not older than two
    months)
  4. 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)
  5. Digital Signature with only one Subscriber is
    enough for Incorporation of Company.
  6. DIR-2 from the Resident Director along with self
    attested copy of PAN and resident.
  7. 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
TIMELINES
Timelines are shown below in Gantt chart with
expected end date
Sr. No. Nature of Procedure in India 01-05 01-05 01-05 06-10 11-15 16-30 31-45 46-50 51-60 61 -70 71-80
1 DIN for Directors
1 DIN for Directors
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 companys 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
16
COMPLAINCES
We provide comprehensive support and services for
all your compliance needs
  • TDS Compliances
  • FEMA Compliances as per FEMA
  • Payroll Processing (ESIC EPF)

Act
  • Compliances under GST Act
  • Statutory Audits under various
  • RBI Compliances

laws (GST, Income Tax, Company
  • Internal Auditing

Act)
  • Accounting and fillings
  • DGFT (Director General of Foreign
  • Income Tax Fillings

Trade) compliances
17
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RAJKOT
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