Company registration in India by Foreign Companies and NRI
Foreign Company Registration in India
During recent years, India has seen a surge in foreign company registration in India. This is due to the fact, that over the years, the growth story of India has encouraged
more and more
foreign companies showing interest in setting up business in India and become a
part of the Indian growth story.
Further, various
schemes of the government and conducive business environment for doing business
in India has also contributed in aforesaid factor. The Government of India has allowed
foreign direct investment and removed all the barriers that are attached with
entry of new firm in India.
To generate
investment in India, government allowed NRIs as entities for investment as per
regulation under Foreign Exchange Management Act, 1999.
Accordingly, not
only foreign companies but lots of NRIs and OCIs are also interested in company
incorporation in India.
Whereas NRIs
prefer private limited companies, public limited companies and Limited
liability partnerships for company incorporation, subsidiary
company registration in India is most preferred by foreign companies as
entity registration in India.
In this write
up, we have discussed about various options of entering into India by foreign
companies as well as NRIs and start the business operations.
For foreign
companies there are following options to enter India
a) Liaison office- This entity cannot do any business operations in India. It only acts as
channel of communication between foreign entity and Indian customers. They
cannot negotiate any contract with Indian customers. It is considered as
Foreign Company in India. It has to take approval of RBI for setting up
business in India and run through remittance received from its parent company.
b) Branch Office- This entity can do such activities in India as permitted by RBI. They
cannot do manufacturing in India. It has to take approval of RBI for setting up
business in India and run through remittance received from its parent company
as well as profits earned from Indian business operations. It is considered as
Foreign Company in India
c) Project office- These are set for undertaking any specific projects and are closed
once projects are completed. It has to take approval of RBI for setting up
business in India and can earn profits from Indian business operations. It is
considered as Foreign Company in India
d) Wholly owned subsidiary company- These entities can do all types of business
activities as per RBI guidelines and as permissible by its MOA and AOA. These
are considered as an Indian entity. It requires approval of Ministry of Company
Affairs (MCA) for incorporation of company in India. When more than 50% shares
of Indian companies are held by parent company, it is called as wholly owned
subsidiary of parent company in India. When less than 50% shares of an Indian
company are held by parent company, Indian company is considered as subsidiary
company in India. WOS or subsidiary company can be opened in the form of
private limited company as well as public limited companies.
Further, it may be noted that Subsidiary
company registration in India is
one of the most popular and widely used form of entity registration by foreign
companies.
e) Limited liability partnerships and- It has advantage of both partnership as well as
corporate form of entity. It is mostly preferred by professionals. It is also
considered as an Indian entity.
f) Joint Ventures- JVs are also another form of entity registration in India. It can be
both contractual as well as on basis of share transfers. It is also for a
particular period or purpose and closed once purpose is achieved.
Out of the
above, first 3 falls under the category of unincorporated entity structure and
last 3 falls under incorporated entity structure. Depending upon the business
requirement and long term vision of the foreign companies, they may chose one
of the aforesaid entity for doing business in India.
For NRIs and
OCIs, last 3 options as mentioned are more conducive for setting up business in
India. Each entity has its own pros and cons and depending upon business need
of the NRIs, proper entity may be suggested.
Thus, both MNCs
as well as NRIs have lot of options available for business set up in India. Out
of same, subsidiary
company registration in India by foreign companies and
Public/Private limited companies by NRIs are most preferable.
In case you need any clarification or have any feedback,
please call @9899217778 or visit www.ezybizindia.in
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