Foreign Company Subsidiary Registration India

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    Register Foreign Company Subsidiary In India

     

    With Make In India Popularity Lots Of Foreign Companies Showing There Interest In Opening Subsidiary Company In India Reason Behind Is India Is Fastest Growing Market And It Have One Of Best Human Resources. A Foreign National Other Than Pakistan And Bangladesh Can Invest In India By Acquiring Shared Of Company However Same Need To Follow FDI Policy Procedure And Conditions

    India’s emerging economy , ease of doing business , minimum taxation & compliances make it favorable investment destination for foreign companies. India Government is promoting foreign investors to start business in India. India government providing various scheme for manufacturing and service sector business. Foreign company subsidiary registration in India is complete online process. Post registration compliances for Foreign subsidiary company is also minimum.

    What Is Wholly Owned Subsidiary Comapany In India By Foreign Company?

    Where a foreign company makes hundred percent ( 100 % ) ( takes all shares ) FDI in India through automatic route , the Indian company become the wholly owned subsidiary company in India. For Example – XYZ Inc. of America owns 100 per cent shares in Shree Pvt. Ltd. Then Shree Pvt. Ltd. becomes the Subsidiary Company.

    Types of Business Entities in India.

    • Private Limited Company
    • Public Limited Company
    • Unlimited Company
    • Limited Liability Partnership (LLP)
    • Partnership
    • Sole Proprietorship

    As a Investor ( foreign ) who is making investment in India , it is very important to make a right kind of suitable business which full fill its purpose and take care of liabilities and tax planning. Companies who Planning do enter in India market need to pay a special attention to what entry strategy to be taken. We help foreign invertor to take prepare right entry level strategy for minimizing taxes and further compliances and registration of Foreign Company Subsidiary In India.

    Benefits of Incorporating Wholly owned Subsidiary in India

    Safeguarding business Secrets :

    As Foreign company have operational control on subsidiary company this offers protection and security to companies trade secrets.

    Limited Liability of Foreign Company :

    In case of worth scenario where a subsidiary company suffers any liability, in that case the incurred liabilities and credit claims won’t be passed on to the parent company. Hence Foreign company have limited liability towards subsidiary company.

    Control on Operation and Strategies :

    As Foreign company have direct operational and strategies control that foreign company can exercise in subsidiary company. As all control is in hand of holding company hence there is less chances of losing intellectual property.

    Owning Brand Name :

    The overall benefit for both companies that in forming a wholly owned subsidiary that is subsidiary can retain its name brand while the parent company is afforded the opportunity to branch out into new markets.

    Prerequisite for Forming Foreign Company Subsidiary In India

    Documents Required for Wholly Owned Indian Subsidiary

    Note: If the proposed director is in foreign country then all the documents must be duly apostl

    FAQ's

    1Do foreign companies need to register in India?
    Yes, foreign companies operating in India are required to register with the Ministry of Corporate Affairs under the Companies Act, 2013. Registration types may include setting up a wholly-owned subsidiary, a joint venture, or a liaison office, each with specific regulatory requirements. The registration process ensures legal compliance, taxation adherence, and allows foreign companies to establish a formal presence in India. It also facilitates easier business operations, financial transactions, and regulatory reporting. Seeking professional advice and legal assistance is recommended to navigate the complexities of foreign company registration in India.
    2What are the compliances of foreign subsidiary companies in India?
    Foreign subsidiary companies in India must adhere to various compliances, including: 1. Company Registration: Complete the registration process with the Ministry of Corporate Affairs. 2. Tax Compliance: File income tax returns and comply with Goods and Services Tax (GST) regulations. 3. Annual Filings: Submit annual financial statements and other required documents to regulatory authorities. 4. Corporate Governance: Adhere to corporate governance norms and ensure compliance with the Companies Act. 5. Foreign Exchange Management Act (FEMA) Compliance: Follow FEMA regulations for foreign investments and transactions. 6. Statutory Audits: Conduct regular audits as per Indian auditing standards. 7. Employment Compliance: Comply with labor and employment laws, including provident fund and gratuity requirements. Seeking professional guidance is advisable for smooth adherence to these compliances.
    3How are foreign subsidiaries taxed in India?
    Foreign subsidiaries in India are subject to taxation based on their residential status. If the subsidiary is considered a resident, it is taxed on its global income. Non-resident subsidiaries are taxed only on income generated within India. The corporate tax rate applies, and foreign companies may also be subject to a branch profit tax. Double taxation avoidance agreements (DTAA) between India and the country of origin may provide relief. Compliance with transfer pricing regulations is essential. Seeking professional advice ensures proper understanding of the taxation framework and helps optimize tax positions for foreign subsidiaries in India.
    4Can a foreign company directly do business in India?
    Yes, a foreign company can directly do business in India by establishing a presence through various structures, such as: 1. Wholly Owned Subsidiary: Setting up a separate legal entity in India. 2. Joint Venture: Partnering with an Indian entity to jointly operate a business. 3. Branch Office: Opening a branch to engage in specific activities permitted by the Reserve Bank of India. 4. Liaison Office; Establishing an office for representing the foreign company's interests without engaging in commercial activities. Each option has specific regulatory requirements, and seeking professional advice is crucial to navigate the legal and procedural complexities of doing business in India as a foreign company.
    5Can a subsidiary of foreign company be a small company?
    The small company status is determined based on turnover, paid-up capital, and other criteria specified for Indian companies. Foreign subsidiaries, although subject to compliance with Indian laws, are typically considered distinct legal entities. Regulations may evolve, so consulting with legal and financial professionals is advisable for the most current and accurate information regarding the status of foreign subsidiaries in India.
    6Is salary from foreign company taxable in India?
    Non-residents are generally taxed on income earned or received in India. India has Double Taxation Avoidance Agreements (DTAA) with many countries to prevent dual taxation. The tax liability depends on factors such as the residential status, duration of stay, and specific provisions of the DTAA. Tax laws may evolve, so seeking advice from tax professionals and consulting the latest regulations is recommended.
    7What is the income tax rate for foreign subsidiaries?
    Income tax rates for foreign subsidiaries in India are governed by the applicable corporate tax rate, which is the same as that for domestic companies. However, the effective tax rate may vary based on factors like the nature of business, eligibility for tax incentives, and Double Taxation Avoidance Agreements (DTAA) with the country of origin. It's crucial for foreign subsidiaries to assess their specific circumstances and seek professional advice for accurate and up-to-date information on tax rates.

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