Indian Subsidiary |how to apply |registration 2020
Indian subsidiary company is the type of business entity in which a firm or share in any firm is owned by the foreign enterprises. In a broader sense it means that a company is Indian subsidiary when more than 50% of the shares are owned by the foreign firm. Many foreign companies have shown interest to start operations in India and ready to enter into the world’s fastest growing economy. Foreign entities prefer Indian subsidiary company registration because they can easily purchase the shares of any firm to enter the Indian market. Foreign entities save much of their time by directly investing in an established India company.
Under the FDI policy a foreign nation can invest and start a business in India. There are two categories of making investment in India either through automatic route or approval route. In automatic route no prior regulatory approval is required for investment in the Indian company. Investment in firms where an automatic route is not permissible can be done only with the approval of Reserve Bank of India.
Separate legal entity:
A subsidiary of foreign entity is a separate legal entity which is established under the government act.
Foreign direct investment:
Under the foreign direct investment act, Government of India allowed 100% investment in some sectors for the foreign companies. FDI takes prior permission from the government but it is mandatory for the India subsidiary company.
The shares of the firm can easily be transferred from one foreign national entity to others.
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Procedure for Indian subsidiary company registration
Digital Signature Certificate
The director of the firm should have a digital signature. In this the foreign national should also have the digital signature which is to be used to file the registration, ROC compliance forms and the tax returns of the company.
Director Identification Number
When the digital signature is approved you will get an email from Registrar of the company for your eligibility to be the director of the company. It would take 2-3 working days to approve the DIN of One person company registration.
After DIN allotment, the other vital step is to file a ‘name approval application’ to ROC on your company’s behalf
Final Incorporation and CIN
After name approval from the registrar of the company we will file the incorporation form with all supporting documents. The registrar of the companies takes 3 working days to complete the approval.
Documents required for Indian Subsidiary company registration
- PAN Card
PAN card of the directors, and shareholders. In Indian subsidiary company a copy of a passport from Foreign director is entailed.
- ID Proof
Aadhar card, voter Id and driving license of a shareholder and director
- Address proof
Telephone bills, electricity bills, water bills and bank statements are also required for the private limited company registration. These documents must not be older than two months of the current date.
- Scanned passport size photo of the director: Latest passport sized color photos of the directors and shareholders.
- Registered office proof
Latest telephone bill, water bill and electricity bill of the registered office
What is an Indian Subsidiary?
An Indian subsidiary is defined as the one where the shares of the company are in part owned by another company. It is established by those foreign entrepreneurs who do not want to go through the process of establishing the foreign unit but instead are looking for a hassle-free investment scheme.
What are the documents required to establish an Indian Subsidiary?
The documents required for the registration of an Indian Subsidiary are:
- Photo id proof
- Parent company seal
- Address proof of business premises
- Written and signed consent to establish the Indian subsidiary
- PAN and passport
Who is eligible to make investment in India as an Indian subsidiary?
Any company, entity, organization or any other firm can invest in Indian subcontinent in the form of Indian subsidiary.
Can an individual invest in the foreign subsidy?
Yes, an Indian citizen can also invest in a foreign subsidy.
What are the benefits of investing as an Indian Subsidiary?
There are numerous advantages in investing as an Indian Subsidiary:
- Easy investment
- FDI inflows
- Increase in brand value
What are the disadvantages of an Indian Subsidiary?
There are numerous disadvantages of an Indian subsidiary:
- Limited control
- Time consuming
- Too much legal paperwork
Can investment be made in any firm by foreign entities?
Yes, investment can be made in any firm or business by foreign entities
Does RBI (Reserve Bank of India) monitors this investment?
Yes, the RBI does monitor the investments done to establish an Indian subsidiary because it comes under the FDI (Foreign Direct Investment) in the Indian subcontinent.
Is it advisable to invest as a subsidiary?
Yes, it is advisable to get converted into a subsidiary because subsidiaries are established by large MNCs which have huge brand value and are leaders in their field.
How much investment can be done in an Indian firm by a foreign entity?
At present, the restriction is limited to power projects such as nuclear energy or the projects which are of national security.