Registration of Foreign Companies in India Step by Step Guide15 min read

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中国公司在印度的投资解决方案 国的外国人如何在印度创办和注册公司
中国公司在印度的投资解决方案 国的外国人如何在印度创办和注册公司

How to Register Foreign Companies in India

Registration of Foreign Companies in India is a quick and easy process, India is a Land of Opportunities and untapped potentials with a population of more than 1.3 billion people and counting If you want to How to register a foreign company in India? and how the Company Registration process in India works? 

You are in the right place.

Company Registration process has made simple and easy after government improved ease of doing business, you must hire a CA (Chartered Account) or CS (Company Secretary) for getting the process done

It Generally takes 3 to 10 Workings days to complete the company registration process in India.

If you want to invest in growing a growing potential and interested in conducting business in India, you need to you establish your company’s legal presence in India by registering your business as a private limited company (Indian subsidiary) or as a foreign company. First, decide whether it needs to be a commercial entity or not.

How to register a foreign company in India as a Subsidiary Company Entry routes for commercial operations

Section 2(42) of the Companies Act, 2013, defines a foreign company as a company or a body corporate incorporated outside India and which has a place of business whether by itself or through an agent, in this country.

Foreign nationals/ Foreign Companies can form a company in India through any of entry strategy mentioned below (India Subsidiary Registration)

  • Wholly Owned Subsidiaries ( 100% Indian Subsidiary )
  • Joint Ventures with other Indian Companies in case 100% FDI is not permitted

How to register a foreign company in India (Not having commercial operations in India)

  1. Liaison Office/Representative Office
  2. Project Office
  3. Branch Office

Private Limited Company Registration (Foreign company)

Companies Act 2013 governs the registration of Private limited companies which lays down the procedure for registering and managing a company and its affairs, Ministry of corporate affairs through www.mca.gov.in which is its E-Portal manages the compliance under the companies act and all company formation related formalities must be done through this e portal

Steps for forming a Private Limited Company Registration (Foreign company registration ):

Registering a private limited company requires a support of CA/CS/Lawyer as the legal procedures are involved in it, it’s a complicated process but do not worry our team of experts will take care of these issues

Step1: Apply RUN ( Reserve Unique Name Form ) (Name Availability)

Step2: Obtain DSC and Form SPICE INC-32 (E Form used for Company Registration)

Step3: Drafting of MOA & AOA (Physical  Copy is used in Indian subsidiary Registration)

Step4: PAN and TAN Application Along with Form SPICE INC -32 (E Form used for Company Registration)

Step5: After completion of the above-mentioned process of company registration, RoC Issues Certificate of Incorporation

Documents required for Private Limited Foreign Company Registration

Where director/subscriber is a foreign National

    • Passport ( Notarised or Apostle in their country) and counter attested by Indian embassy
    • No Pan Declaration and counter attested by Indian embassy)
    • INC -9
    • Address proof: Driving license, Residence card,  Government issued a form of identification containing an address
    • Copies of utility bills ( Telephone Bill or Bank Statements) that are not older than two months ( Compulsory for incorporation of companies)
  • Additional Documents required for Foreign Holding Company
    • Board Resolution for Investment in India
    • Incorporation Certificate of Foreign holding Company
    • INC 9 Declaration in the name of the company
    • All KYC document of Authorised Signatory

NOTE: ALL THE ABOVE MENTIONED DOCUMENTS MUST BE NOTARIZED AND APOSTLE BY INDIAN EMBASSY

Rules to Complied for registering as Liaison Office/Representative Office / Project Office /Branch Office

Under the Companies Act 2013, Companies (Registration of Foreign Companies) Rules, 2014 prescribes the procedure to be followed for the registration of a foreign company

Particulars relating to directors and Secretary to be furnished to the Registrar by foreign Companies:

Within 30 thirty days of establishing its place of business in India submit the following to the Registrar of companies a list of

  • Directors (Foreign Residency Company), full list along with kyc proof
  • Secretary of such company (Foreign Residency Company ) , full list along with kyc proof
  • File form Form FC-1 with 30 thirty days and make the payment of fees provided in Companies (Registration Offices and Fees) Rules, 2014
  • An attested copy of approval from the Reserve Bank of India under Foreign Exchange Management Act or Regulations
  • Approval is required by such foreign company to establish a place of business in India or a declaration from the authorized representative of such foreign company that no such approval is required.
  • In case of change in documents or subsequent amendments or change in directors or secretaries then a return in Form FC2 along with the fee as provided in the Companies (Rules, 2014 containing the particulars of the alteration, within a period of 30 Days thirty days from the date on which the alteration was made or occurred.

How to Prepare Financial Statement of the foreign company:

A foreign company shall prepare the financial statement of its Indian business operations in accordance with Schedule III or as near thereto as may be possible for each financial year the following should be annexed along with the financials

  • Accounts of Companies documents required to be annexed thereto in accordance with the provisions of Chapter IX of the Companies Act 2013
  • copies of latest consolidated financial statements of the parent foreign company, as submitted by it to the regulatory authority in the country of its incorporation under the provisions of the law for the time being in force in that country:
  • Provided that where such documents are not in English language, there shall be annexed to it a certified translation thereof in the English language
  • Such other documents as may be required to be annexed or attached in accordance with sub-rule (2).

Documents relating to Statement of related party transaction related to the Foreign Companies in India 

  •  (i) name of the person in India which shall be deemed to be the related party within the meaning of clause (76) of section 2 of the Act of the foreign company or of any subsidiary or holding company of such foreign company or of any firm in which such foreign company or its subsidiary or holding company is a partner;
  • ii. nature of such a relationship;
  • iii. description and nature of transaction;
  • iv. amount of such transaction during the year with opening ,closing, highest and lowest balance during the year and provisions made (if any) in respect of such transactions;
  • v. reason of such transaction;
  • vi. material effect of such transaction on both the parties;
  • vii. amount written off or written back in respect of dues from or to the related parties;
  • viii. a declaration that such transactions were carried out at arms’ length basis; and
  • ix. any other details of the transaction necessary to understand the financial impact;
Documents relating Statement of repatriation of profits related to Foreign Companies registered in India.
  • amount of profits repatriated during the year;
  • ii. recipients of the repatriation;
  • iii. form of repatriation;
  • iv. dates of repatriation;
  • v. details if repatriation made to a jurisdiction other than the residence of the beneficiary;
  • vi. mode of repatriation; and
  • vii. approval of the Reserve Bank of India or any other authority, if any.
Fund Transfer Related to the Foreign Companies registered in India 

Relating to Statement of transfer of funds (including dividends if any) which shall, in the relation of any fund transfer between the place of business of the foreign company in India and any other related party of the foreign company outside India including its holding, subsidiary and associate company, include-

  • i. date of such transfer;
  • ii. amount of fund transferred or received;
  • iii. mode of receipt or transfer of fund;
  • iv. purpose of such receipt or transfer; and
  • v. approval of Reserve Bank of India or any other authority, if any.

All documents referred to in this rule shall be submitted to the Registrar of Companies within a period of six months of the close of the financial year of the foreign company to which the documents relate.

Registrar of Companies in special conditions may for any special reason, and on application made in writing by the foreign company concerned, extend the said period by a period not exceeding three months.

Audit Requirements for Foreign Companies registered in India 

1. Every foreign company shall get its accounts, pertaining to the Indian business operations prepared in accordance with the requirements of clause (a) of sub-section (1) of section 381 and rule 4, audited by a practicing Chartered Accountant in India or a firm or limited liability partnership of practicing chartered accountants.

2. The provisions of Chapter X i.e. Audit and Auditors and rules made there under, as far as applicable, shall apply, mutatis mutandis, to the foreign company.

Register of Places of the business of  Foreign Companies registered in India 

along with the financial statement, with such fee as provided under Companies (Registration Fees) Rules, 2014

A foreign company shall file with the Registrar of COmpanies the following, in Form FC.3

  •  a list of all the places of business established by the foreign company in India as on the date of balance sheet.
  • This shall be annexed along with the financial statement, with such fee as provided under Companies (Registration Fees) Rules, 2014

Annual Return of  Foreign Companies registered in India

Annual return needs to filed in Form FC.4 along with such fee as provided in the Companies (Registration Offices and Fees) Rules, 2014 within a period of sixty days from the last day of its financial year

Office of Registrar of Companies where documents to be delivered and fee for registration of documents:

1. Any document which any foreign company is required to deliver to the Registrar shall be delivered to the Registrar having jurisdiction over New Delhi, and references to the Registrar in Chapter XXII of the Act i.e. Companies Incorporated outside India and these rules shall be construed accordingly.

2. The fee to be paid to the Registrar for registering any document relating to a foreign company shall be such as provided in the Companies (Registration Offices) Rules, 2014.

3. If any foreign company ceases to have a place of business in India, it shall forthwith give notice of the fact to the Registrar, and as from the date on which notice is so given, the obligation of the company to deliver any document to the Registrar shall cease, provided it has no other place of business in India.

Certified True copy of documents to be submitted for Foreign Companies registered in India

  • A copy of any charter,
  • statutes,
  • memorandum and articles,
  • or other instrument constituting or defining the constitution of a Foreign company shall be duly certified to be a true copy in the manner given below:

1. If the company is incorporated in a country outside the Commonwealth-

a. the copy aforesaid shall be certified as a true copy by-

    • i. (i) an official of the Government to whose custody the original is situated; or
  •  ii. (ii) a Notary (Public) of such Country; or
  •  iii. an officer of the company.

b. The signature or seal of the official referred to in sub-clause (i) of clause (a) or the certificate of the Notary (Public) referred to in sub-clause (ii) of clause (a) shall be authenticated by a diplomatic or consular officer empowered in this behalf under section 3 of the Diplomatic and Consular Officers (Oaths and fees) Act, 1948 (XL of 1948), or where there is no such officer, by any of the officials mentioned in section 6 of the Commissioners of Oath Act,or in any relevant Act for the said purpose.

c. (c) The certificate of the officer of the company referred to in sub-clause (iii) of clause (a) shall be signed before a person having authority to administer an oath as provided under section 3 of the Diplomatic and Consular Officers (Oath and Fees) Act, 1948 (XL of 1948), or as the case may be, by section 3 of the Commissioners of Oath Act, and the status of the person administering the oath in the latter case being authenticated by any official specified in section 6 of the Commissioners of Oaths Act or in any relevant Act for the said purpose.

2. If the company is incorporated in any part of the Commonwealth, the copy of the document shall be certified as a true copy by- 

a. an official of the Government to whose custody the original of the document is committed; or

b. a Notary (Public) in that part of the Commonwealth; or

c. an officer of the company, on oath before a person having authority to administer an oath in that part of the Commonwealth.

(3) Any altered document delivered to the Registrar should also be duly certified in the manner mentioned above.

(4) If the Company is incorporated in a country falling outside the Commonwealth, but a party to the Hague Apostille Convention, 1961-

a. the copy of the documents shall be certified as a true copy by an official of the Government to whose custody the original is committed and be duly apostillised in accordance with Hague Convention;

b. a list of the directors and the secretary of the Company, if any, the name and address of persons resident in India, authorized to accept notice on behalf of the Company shall be duly notarized and be apostillised in the Country of their origin in accordance with Hague Convention;

c. the signatures and address on the Memorandum of Association and proof of identity, where required, of foreign nationals seeking to register a company in India shall be notarized before the notary of the country of their origin and be duly apostillised in accordance with the said Hague Convention.

Notarization & Authentication of Translated documents:

1. All the documents required to be filed with the Registrar by the foreign companies shall be in English language and where any such document is not in English language, there shall be attached a translation thereof in English language duly certified to be correct in the manner given in these rules.

2. Where any such translation is made outside India, it shall be authenticated by the signature and the seal, if any, of-

a. the official having custody of the original; or

b. a Notary (Public) of the country (or part of the country) where the company is incorporated:

Provided that where the company is incorporated in a country outside the Commonwealth, the signature or seal of the person so certifying shall be authenticated by a diplomatic or consular officer empowered in this behalf under section 3 of the Diplomatic and Consular Officers (Oaths and Fees) Act, 1948, or, where there is no such officer, by any of the officials mentioned in section 6, of the Commissioners of Oaths Act,or in any relevant Act for the said purpose.

3. Where such translation is made within India, it shall be authenticated by-

a. an advocate, attorney or pleader entitled to appear before any High Court; or

b. an affidavit, of a competent person having, in the opinion of the Registrar, an adequate knowledge of the language of the original and of English.

Documents to be annexed to prospectus:

The following documents shall be annexed to the prospectus, namely:-

a. any consent to the issue of the prospectus required from any person as an expert;

b. a copy of contracts for appointment of managing director or manager and in case of a contract not reduced into writing, a memorandum giving full particulars thereof;

c. a copy of any other material contracts, not entered in the ordinary course of business, but entered within preceding two years;

d. a copy of underwriting agreement; and

e. a copy of power of attorney, if prospectus is signed through duly authorized agent of directors.

Consequences and Action for improper use or description as foreign company:

If any person or person trade or carry on business in any manner under any name or title or description as a foreign company registered under the Act or the rules made thereunder, that person or each of those persons shall, unless duly registered as foreign company under the Act and rules made thereunder, shall be liable for investigation under section 210 of the Act and action consequent upon that investigation shall be taken against that person.

Foreign Exchange Management (Establishment in India of a branch office or a liaison office or a project office or any other place of business) (Amendment) Regulations, 2018 Released as by RBI

2. Amendment to Regulation 5:

In the Foreign Exchange Management (Establishment in India of a branch office or a liaison office or a project office or any other place of business) Regulations, 2016 (Notification No. FEMA 22(R)/2016-RB dated March 31, 2016), in the Regulation 5,

(A) The existing sub-regulation d. shall be substituted by the following namely:

d. the applicant is a Non-Government Organisation, Non-Profit Organisation, Body/Agency/Department of a foreign government. However, if such entity is engaged, partly or wholly, in any of the activities covered under Foreign Contribution (Regulation) Act, 2010 (FCRA), they shall obtain a certificate of registration under the said Act and shall not seek permission under this regulation.

3. Amendment to Form FNC (Annex C):

In the Foreign Exchange Management (Establishment in India of a branch office or a liaison office or a project office or any other place of business) Regulations, 2016 (Notification No. FEMA 22(R)/2016-RB dated March 31, 2016), in the existing form FNC (Annex C), in Part –II, under the heading ‘Declaration’, in clause (ii), at the end of the existing sentence, the following shall be added, namely:

“ We will not undertake either partly or fully, any activity that is covered under Foreign Contribution Regulation Act, 2010 (FCRA) and we understand that any misrepresentation made or false information furnished by us in this behalf would render the approval granted under the Foreign Exchange Management (Establishment in India of a branch office or liaison office or a project office or any other place of business) Regulations, 2016, automatically as void ab initio and such approval by the Reserve Bank shall stand withdrawn without any further notice”.

 

Conclusion: 

India offers companies a large, built-in and dynamic potential market to explore. If you are interested in conducting business in this market, you need to establish your company’s legal presence in India by registering your business and filing the appropriate forms with the proper Indian authorities.

In case of any help or assistance in Foreign Company registration in India , contact Virtual auditor support team on 9962 260 333/044- 48560333 /mail us [email protected], our team will guide through the entire process and help you comply

Summary
Registration of Foreign Companies in India Step by Step Guide
Article Name
Registration of Foreign Companies in India Step by Step Guide
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Registration of Foreign Companies in India Step by Step Guide
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Virtual Auditor Contact us at @ 99622 60333 eMail id: [email protected]
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Virtual Auditor Private Limited
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