Foreign Country Registration and Setting Up Business In India

Earlier, investors used to think, “Why India?” And now they are of the opinion, “Why not India?” These are the words of our Honourable Prime Minister, Mr. Narendra Modi regarding the recent Government Reforms in India. Our prominent labor laws are attracting many foreign investors to India.

Well, if you are a resident of anywhere outside India and have an inclination towards setting up a company here, this piece of information is just for you. We will try to reduce the complexities involved in doing the same and bring forth some simple steps to be followed while setting up a wholly-owned subsidiary or even a joint venture in India.

Why are foreign companies interested in doing business in India?

India is a land of immeasurable opportunities with a holistic potential among a population of 1.3 billion. This gives companies a tremendous consumer base along with quicker production at relatively lower costs.

Eligibility for a foreign company to register in India

Under the Companies Act, 2013, a foreign company is the one that is incorporated outside India but:

EITHER has a place of business in India physically or electronically OR carries out business in India through any legal means.

Any company fulfilling the above criteria is eligible to register in India.

In what ways can a foreign company set up a venture in India?

Foreign companies can be classified into two categories based on the kind of work they carry out:

  • Companies having commercial operations
  • Companies with no commercial operations
  • Companies having commercial operations:

Such companies can register in India as:

  • Wholly owned subsidiaries
  • Joint venture with other Indian companies
  • Companies with no commercial operations:

These companies will have the option to register themselves as:

  • Branch Office
  • Project Office
  • Liaison Office 

Registration of a foreign company as a Private Limited Company in India

The registration of a private limited company for a foreign national is not an easy piece of work. This generally requires the support of a CA/CS/Lawyer as they are trained to handle the complexities involved in the same.

The steps involved are as follows:

  • Get your preferred name approval through the Reserve Unique Name Form.
  • Obtain an E-form for company registration and get a digital signature done by one or more director(s) of the foreign company.
  • After this, another mandatory step is the subscription to Articles of Association (AOA) & Memorandum of Association (MOA).
  • Keep all the documents handy to be produced in front of the concerned authorities whenever asked for during the registration process.
  • The penultimate stage would involve PF (Provident Fund) and ESI (Employees’ State Insurance) registration.
  • Eventually, after all this, the RoC would issue the CERTIFICATE OF INCORPORATION and your company would be legally registered as a recognized entity.

Some principal tasks that are required to be performed immediately after registration would also be taken care of by the CA/CS you appoint.

Summing up

It is essential to understand that registration is the primary step for foreign companies to establish their legal presence in India. One simple procedure would ensure that no further complications invade your work and bother you recurrently.

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