Foreign companies that are interested in setting up their operations in India, do so by the way of a Wholly Owned Subsidiary. Those foreign companies if they are operating in sectors where 100% foreign direct investment is permitted under the FDI policy and the provisions of FEMA can set up their 100% subsidiary (Wholly Owned Subsidiary) in India.
Alternatively, a foreign company can set up a Branch Office / Liaison Office / Project Office. To know more about these options click here.
How RMC can help you set up a Wholly Owned Subsidiary (WOS / 100% Subsidiary) in India?
RMC guides the Foreign Company on the requirements and pre-requisites under the Companies Act, FEMA, Industrial Policy etc.
It is possible for the foreign company to have foreign directors on the board of the Indian Company, however it is a statutory requirement, that there should be a director who is resident in India for more than 180 days. To satisfy this condition, it is not necessary that such resident director be a Citizen of India.
For incorporation of the company, applications have to be filed with the Registrar of Companies. Once a company has been duly incorporated in India as an Indian company, it is subject to Indian laws and regulations as applicable to other domestic Indian companies.
RMC on behalf of the foreign holding company submits an application in the specified form (Spice + Part A) with the Ministry of Corporate Affairs for obtaining their approval for the proposed name of the Indian entity. The foreign holding company will have to provide a “No Objection Certificate” (NOC) for this purpose.
Post-approval of the name by the Ministry of Corporate Affairs, RMC prepares the following documents, that are required to be filed for incorporation of the company in Form Spice + Part B:
- Memorandum of Association;
- Articles of Association;
- A declaration stating that all the requirements of the Companies Act 2013, the applicable rules with respect to the registration and other matters have been complied with;
- A list of persons who have consented to act as directors of the company;
- If the proposed company is a public company, consent of every person prepared to act as a director must be submitted in a prescribed format;
- Information about directors, managing directors, managers, and secretary must be submitted in a prescribed form (DIR-12);
- Information about the registered office in a prescribed form (INC-22);
RMC prepares the draft of the above documents and prepares the Forms DIR-2, DIR-4 INC 9 & 10, power of authorization, and extract of Board resolution of the holding company.
The documents may have to be notarized by a notary public or by the Indian Consulate or apostilled depending on the type of the document, county of origin etc. After these documents are duly executed by the foreign company and directors the same is submitted to the Registrar of Companies.
Further to incorporation, RMC guides the Foreign company to remit the capital as per the subscription to the MOA and reports on behalf of the newly incorporated Indian Company reports such inward remittance and allotmentof shares on FIRMS Portal of RBI to obatin the UIN for the remittance received.
RMC further obtains various business registrations such as Import Export Code (IEC), Goods and Services Tax (GST), Permanent Account Number under Income Tax Act (PAN), Tax Deduction Account Number (TAN) that are required for conducting the business in India.
RMC also guides on the compliances to be made under various labour laws and on behalf of the client obtains various registrations, files declarations, monthly, quarterly, annual returns to ensure that the client is in compliance with the various Tax, Labour Laws.
RMC offers the service of Virtual CFO, wherein the clients can delegate the tax compliances, accounting, payroll management, labour compliances to ensure that the time and energies of its management and Key Managerial Resources are utilised for achieving its Business Vision.
If you are interested in setting up a company in India as a subsidiary, please write to [email protected]
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