HOW TO REGISTER A SUBSIDIARY COMPANY – FOREIGN FDI IN INDIA?

Posted By on May 25, 2016

The Government of India has taken several measures to facilitate FDI by Foreign Companies in India including simplified registration process, limited legal compliances, permission for FDI under Automatic Route (except for areas like Defence, Broadcasting, Multi Brand Retail, Telecom, etc.) where sectarian cap (FDI Limits) are prescribed. For a specific query on the Sector you intend to invest in India, please send a query on rp@ritulpatwa.com and our team will respond at the earliest.

The procedure for Incorporation of a Subsidiary Company in India, along with Compliance Mechanism and Documentation Requirement are noted below:-

BASIC REQUIREMENTS FOR FORMATION OF SUBSIDIARY

  1. Indian Resident Director – Local director can be appointed without any equity participation in the subsidiary company; and
  2. Principal Place of Business in India – A rented or Leased Premises will be sufficient for this purpose.

STEPS IN INCORPORATION OF SUBSIDIARY

  1. Obtain Digital Signature for each Director of the proposed Subsidiary Company;
  2. Apply for Directors Identification Number (DIN) of each proposed director of the Company;
  3. Application for approval of Name of the Company;
  4. Drafting of the Article and Memorandum of Association for the proposed Subsidiary Company and preparation of other documents for Incorporation of the Company;
  5. Registration of Company;

POST INCORPORATION COMPLIANCES

  1. Obtaining Permanent Account Number (PAN);
  2. Opening of Bank Account for Subsidiary Company;
  3. Obtaining various registrations including VAT, Service Tax, TIN, Excise etc depending on the requirements of the business of the Company;
  4. Advance Foreign Remittance Reporting (AFRR) – To be submitted to Reserve Bank of India (RBI) within one month of receipt of FDI Remittance in India;
  5. Allotment of Shares to the Holding Company within 180 of receipt of FDI;
  6. Submission of FC-GPR Form with RBI within 30 Days of Allotment of Shares;

DOCUMENTS & INFORMATION REQUIRED FOR INCORPORATION OF SUBSIDIARY

  1. Requirements for DIN Application of the Foreign Directors

    a) Verification letter in Form DIR-4. Duly attested by the Consulate of the India Embassy in the Home Country of the Director or Apostils* (Worksheet for procurement of DIR-4 is attached).
    b) Verification of Signatures of Subscribers in Form INC 10 : 1 Photo should be pasted in the box provided in the form. Duly attested by the Consulate of the India Embassy in the Home Country of the Director or Apostille*.

 

  1. Details of at-least two Directors / Promoters of the company for obtaining DIN (Director’s Identifications Number)
  • Complete Name
  • Address (including City, State, Pin Code, Country)
  • Father’s Name
  • Date of Birth (mandatory)
  • Passport Photograph of every proposed Director.
  • Nationality
  • Occupation
  • Educational Qualification
  • Place of Birth
  • Two Copy of Pan Card as a proof of identity (mandatory requirement for Indian national).
  • Two Copy of Aadhar Card/Voter Id/Driving Licence/Passport (One of these Mandatory for Indian Nationals)
  • Two Copy of Passport as a proof of identity (mandatory requirement for Foreign national)
  • Copy of Electricity Bill / Telephone Bill / Mobile Bill / Bank Statement as a Proof of Address.

Note:-
A) All documents should be self attested in case of Indian Nationals & In case of foreign residents the documents i.e. Proof of Identity and Proof of Residence have to be attested by the Consulate of the Indian Embassy or Apostle (as per Hague Convention of 1961).
B) The above address proof should not be older than 2 Months as on date of application for Registration.

3. Details of proposed company to be incorporated in India and its Foreign Holding Company

 

  • THREE Proposed names of the company in order of preference. [Note – In case of Trade Mark of other company used – NOC from the aforesaid company has to be provided.]
  • Registered office address of the company where company is to be incorporated. [Copy of Rent Agreement and Latest Electricity Bill to be provided.]
  • Main Object of the Company.
  • Authorized Capital of the Company
  • Ratio of Shareholding of Proposed directors in proposed company.
  • Duly notarized Board Resolution from the foreign company, setting out that the foreign company wants to set-up a subsidiary company in India, wherein three proposed names for the Indian Subsidiary should be clearly set-out. Authority should be vested upon a person, who shall become the proposed director of the newly formed company.
  • Certificate of Incorporation and/or Charter/Articles/Memorandum/ Bye Laws of the holding foreign company

The other incorporation related documents will be prepared only after the name is approved by the Ministry of Corporate Affairs. Templates of these documents will be provided by our Corporate Law Division).

FOR ANY FURTHER INFORMATION OR CLARITY IN THE ABOVE MATTER, YOU CAN CONTACT US ON email : rp@ritulpatwa.com or M : +91 9001231231.

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