Subsidiary Company Registration in India- Advantages

 Subsidiary Company Registration in India

 

Over the years, India has become one of the fastest growing economies of the world attracting huge foreign direct investments. India is the world’s largest democracy with huge market with middle class consumer base, high skilled and cheap work force and world’s second largest English speaking country. Further, government of India has introduced lot of schemes and provided incentives to foreign companies for setting up their businesses in India

All the aforesaid reasons have made India quite an attractive business destination and over the years, India has witnessed more and more foreign business set up in India.

There are many options for foreign company registration in India like in the form of liaison office, branch office, subsidiary company, joint ventures and Limited Liability Partnerships.

Depending upon the long term vision of the company as well as business objectives, foreign company may choose any of the aforesaid options for company registration in India.

In this write up, we will discuss about some of the advantages of subsidiary company registration in India:

Advantages of Subsidiary Company Registration in India

Some of the advantages of subsidiary company registration in India are as under:

a)      Can use the brand name of foreign company

Normally, foreign companies which want to incorporate a subsidiary in India want to also use its brand name in India. At the time of incorporation of an Indian subsidiary, Indian company may attach a NOC and Board resolution resolving for using the brand name of foreign company in India and 90% of the times, Indian regulatory authorities allot the same name to Indian subsidiary company as that of its parent company. However, if there is already an Indian company registered with similar brand name, then in such cases, new name need to be applied for approval.

b)     Taxation rate Advantage

Another advantage of Indian subsidiary company (whether private limited or public limited) is that it enjoys very less corporate tax rate ( 15% and 22%) as compared to other forms of entities like Branch office ( 40%), LLP (30%). This is an important factor for choosing an Indian subsidiary over other forms of entity registration.

c)      Suitable for private equity and venture capital investment

Since shares of an Indian subsidiary may be transferred to other entities, it is suitable for investment by private equity firms and venture capitalist who takes shares of the company and make huge investment in the business of an Indian Subsidiary.

d)      Independent legal structure

The Indian subsidiary is governed by Indian business law and has a separate or independent legal structure from its parent firm. Unlike branch office and liaison office, which are considered as foreign company in India, Indian subsidiaries are considered as Indian company only and governed by Indian rules and regulations.

e)      Share transfers

After signing a share transfer form and a share certificate, a shareholder may easily exchange or transfer the shares they purchased to another party or individual.

f)       No restriction on business activities in India

Unlike branch office and liaison office which requires prior permission of Reserve bank of India for doing business operations in India as well as the fact, that they can do only permissible business activities in India, there is no restriction on doing any business in India for subsidiary companies. Barring few prohibited activities in India, they are allowed to do all the business activities as mentioned in their MOA and AOA.

Thus, it may be seen from above, that there are many advantages of subsidiary company registration in India and accordingly, over the years, it has become one of the most sought after manner of business set up in India by the foreign entities.

 

Location: India

Comments

Post a Comment

Popular posts from this blog

BUSINESS SETUP IN INDIA- Various options available for Doing Business in India

BUSINESS SETUP IN INDIA   One of the most common queries received by Indian consulting firms from global corporations nowadays is about business setup in India . Due to globalization, the companies all over the world has expanded its presence in other jurisdiction or territories from where they are either engaged in trading business or export import or providing services globally. Owing to its huge consumer market, India has also seen quite a surge in foreign company registration in India in recent years. Just like Indian companies are curious about how to setup business in foreign countries, similarly, foreign companies are also interested in business setup in India and want to know about various options available for setting up business in India. VARIOUS OPTIONS FOR BUSINESS SETUP IN INDIA Well, the type of entities for doing business in India depends upon various factors like Nature of business of the Company, Long term vision of the company and purpose of business set
Read more

Filing of form 15CA and 15CB – Some practical issues

Image
  Form 15CA and 15CB  Normally, when any money is to be remitted outside India, the bankers often ask for the copies of form 15CA and 15CB which need to be filed electronically. It means that firstly the assessee need to upload form 15CA and 15CB electronically which requires e- verification through EVC mode and later copy of same need to be submitted to the banker for further processing of remittance outside India. Form 15CA and 15CB need to be filed even if all the taxes are already paid in India. Therefore, one cannot take a plea that since all the taxes are already paid, so what is the need for electronically uploading form 15CA and 15CB. For instance, often when an NRI disposed of his property in India, He need to compute capital gain tax liability, sometimes there is no capital gain tax but refund in the case of the assessee. However, while making remittance of sale proceeds, He needs to submit copy of form 15CA and 15CB. Another issue which normally arises in cases wher
Read more

OUTSOURCE ACCOUNTING SERVICE- PROS AND CONS

OUTSOURCE ACCOUNTING SERVICE One of the dilemmas faced by many businessmen is that whether to keep an in house accountant for day to day book keeping or to outsource accounting service to an external agency. There is no readymade answer to the same and it all depends upon nature of business, complexities of accounting, annual turnover of the company and other factors. Normally, during the initial stage of businesses, it makes sense to outsource accounting service instead of keeping an in house accountant merely from cost saving purpose and as the business grows, it is advisable to keep an in house accountant. In this write up, we would be discussing the pros and cons of account outsourcing instead of keeping an in-house accountant Pros of Account Outsourcing a)       Cost Saving As mentioned above, in the initial stage of business, lot of cost saving can be done by taking account outsourcing service of an external firm. This is due to the fact that keeping an in house
Read more