Foreign Company Registration
What is Foreign Company?
As per section 2(42) of the Companies Act, 2013, a foreign company means any company or body corporate incorporated outside India which:-
(a) has a place of business in India whether by itself or through an agent, physically or through electronic mode; and
(b) conducts any business activity in India in any other manner.
What are ways that a foreign company can run business in India?
A foreign company which is desirous of entering and doing business in India can enter in any of below given ways:-
As an Indian Company:- A Indian Limited company is incorporated in India and the shares are held by foreigners in below given ways.
Wholly Owned Subsidiary:- For an Indian company to Become Wholly Owned Subsidiary Company of a Foreign Company, a foreign company needs to invest 100% FDI in that Indian company through automatic route, for the purpose of foreign company registration in India.
Joint Venture:- It is important for the foreign company to elect a local partner with whom it wants to enter into a joint venture. A Memorandum of Understanding or a Letter of Intent is to be signed which will state the basis for the joint venture agreement. A thorough discussion of all the terms should be done and they must be consistent with regional as well as international law.
Subsidiary Company:- In this Foreign company hold shares of Indian company upto the limit of 49.99% of the total shares of the company.
As an Foreign Company:- A foreign company get register under the Companies Act, 2013 to start business in any of below given ways:-
Branch Office:- A branch Office is established by foreign company in India. Foreign company must be large business and provide proof of profitability.
Liaison Office:- Liaison office can be established for all liaison activities in India. All the expenses of liaison office must be met through foreign remittance from parent company.
Project Office:- This office can be established to execute projects awarded to a foreign company by an Indian Company. Approval of from Reserve Bank of India may be required.
Starting a private limited company is the coolest and fastest way to set up in India. Foreign Direct Investment (FDI) of up to 100% into a public limited or private limited is permitted under the FDI policy.