Explore the intricacies of setting up a subsidiary company in India. Learn about the advantages, legal requirements, and step-by-step process for registering a subsidiary company in this dynamic business environment.
Start your Business in India is a strategic move, given its growing economy and vast market potential. However, to navigate the Indian business landscape successfully, entrepreneurs often opt for establishing a Foreign subsidiary Registration. Through this article, we’ll delve into the crucial aspects of registering a subsidiary company in India, outlining its benefits and providing a comprehensive guide on the registration process.
Understanding Subsidiary Company Registration
A subsidiary company registration is a separate legal entity from its parent company, providing a range of advantages to foreign businesses entering the Indian market. It allows the parent company to maintain control while limiting liability and ensuring compliance with Indian regulations. The process of registration of subsidiary company in India involves adhering to the guidelines set forth by the Ministry of Corporate Affairs (MCA) and the Companies Act. By establishing a Foreign subsidiary Company, businesses can tap into India’s diverse market while mitigating risks effectively.
Advantages of Registering a Subsidiary Company in India
Limited Liability:Just like in the case of a private limited company, a subsidiary company offers limited liability protection. This shields the parent company from potential losses incurred by the subsidiary, protecting the parent company’s assets.
Control and Autonomy:While complying with Indian regulations, a subsidiary allows the parent company to retain control over its Indian operations. This ensures that the parent company’s vision and strategies are effectively executed in the Indian market.
Access to Local Markets:Establishing a subsidiary provides direct access to the Indian market, enabling businesses to tailor their products and services to local preferences and needs.
Indian Tax Benefits:Subsidiary companies can avail themselves of various tax incentives and benefits offered by the Indian government, depending on the sector and nature of the business.
Step-by-Step Guide to Registering a Subsidiary Company in India
Market Research:Start by conducting thorough market research to understand the Indian market, consumer behavior, and competition. This insight will help you tailor your subsidiary’s business strategy.
Choose a Suitable Business Structure:Decide on the appropriate legal structure for your subsidiary, whether it’s a private limited company, public limited company, or a liaison office, depending on your business goals.
Obtain Necessary Approvals: Seek any required approvals from regulatory authorities and the Reserve Bank of India (RBI) if applicable. This step is crucial for certain sectors like banking, insurance, and defense.
Draft Necessary Documents:Prepare the requisite documents, including the Memorandum and Articles of Association, and ensure compliance with Indian laws and regulations.
Company Registration through filing of form with MCA
To apply for Foreign Subsidiary company registration with the MCA, which involves obtaining a Digital Signature Certificates (DSC) required for web based form filing for all Directors/Subscribers, and filing the necessary incorporation documents in Spice+ Part-B, Agile-s, INC-33, INC-34, INC-9 etc.and When filing the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) form for company registration in India, you need to submit several documents and attachments along with the SPICe+ form:
a) Memorandum of Association INC-33 (Physical filing in case of Foreign Nationals)
b) Articles of Association (Physical filing in case of Foreign Nationals)
c) Declaration by the first director(s) and subscriber(s) (Affidavit not required)
d) Proof of office address (Ownership) Rent Deed/Purchase deed/sale deed
e) Copy of utility bills (Not older than two months
f) NOC (No Objection Certificate) for the use of premises for the registered office of the proposed company from the owner and the person whose name is mentioned in the utility bill
g) Copy of certificate of incorporation of foreign body corporate (Applicable if a body corporate is the promoter)
h) A resolution passed by the promoter company (Applicable if a body corporate is the promoter)
i) The interest of the first director(s) in other entities
k) Proof of identity as well as the residential address of subscribers
l) Proof of identity as well as the residential address of the nominee
m) Proof of identity and address of Applicant I, II, III (Subscriber OR Director)
r) Optional attachments (if any)
To ensure that all the required documents and attachments are properly filled out and submitted along with the SPICe+ form, you should follow Company Registration Provisions specific guidelines and requirements provided by the Ministry of Corporate Affairs (MCA) or the portal through which you are submitting the form.
Compliance and Reporting: After Company registration, maintain compliance with ongoing regulatory and reporting requirements to ensure the smooth operation of your subsidiary including FEMA/ RBI Compliance Checklist for Indian Companies with FDI
For the incorporation of a company in India with foreign nationals as subscribers or directors, certain documents may need to be notarized and apostilled, depending on the country of residence of the foreign national and the specific requirements of Indian regulations:
1. Proof of Residence:
a) Commonwealth Country: If the foreign national’s proof of residence is from a country that is part of the Commonwealth, it should be notarized by a notary public of that country.
b) Hague Apostille Convention Country:If the foreign national’s proof of residence is from a country that is party to the Hague Apostille Convention, 1961, the document should be attested by a notary public of that country and then duly apostilled in accordance with the Hague Convention.
c) Non-Commonwealth Country and Non-Hague Convention Country: If the foreign national’s proof of residence is from a country outside the Commonwealth and not party to the Hague Convention, it should be authenticated by a Diplomatic or Consular Officer empowered under Section 3 of the Diplomatic and Consular Officers (Oaths and Fees) Act, 1948 (40 of 1948). This means the document should be attested by a Public Notary and authenticated by the Indian Embassy in the foreign national’s country of residence.
2. Documents to be Notarized and Apostilled:
The following documents may need to be notarized and apostilled when incorporating a company in India with foreign subscribers or directors:
1. Proof of Identity:This could include a passport or other government-issued identification documents.
2. Certificate of Incorporation (COI) of the Foreign Body Corporate: If the foreign national represents a foreign company, the Certificate of Incorporation of that foreign company may need to be notarized and apostilled.
3. Memorandum of Association (MoA):The MoA of the Indian company may need to be notarized and apostilled.
4. Articles of Association (AoA): Similarly, the AoA of the Indian company may need notarization and apostille.
5. Documents Executed Outside India:The requirement for notarization, apostille, or consularization of documents executed outside India can depend on the place of execution. Some documents may need notarization, some may need apostille, and some may require consularization. It’s essential to determine the specific requirements for each document based on the place of execution.
Please note that these requirements may be subject to change or specific to individual cases. Compliance Calendar LLP, professional firm in India, providing Subsidiary company registration service in India to ensure compliance with the current regulations and to handle the necessary attestations correctly. More, the Indian Ministry of Corporate Affairs (MCA) and the concerned authorities may provide guidance on the exact requirements for foreign nationals during the company incorporation process.
Therefore, Foreign subsidiary Registration in India by Compliance Calendar LLP, offers an excellent avenue for businesses to expand their operations while minimizing risks and ensuring compliance with Indian laws. By following this comprehensive guide, entrepreneurs can navigate the process effectively, establish a robust presence in the Indian market, and tap into its immense potential for growth and profitability.
