Do the directors have to be residents in India to form an Indian subsidiary company?

Yes, one director has to be a local person in India.

Can a foreign company repatriate profits earned in India?

Yes, a foreign company can repatriate profits earned in India subject to the applicable foreign exchange regulations and guidelines.

Incorporation of Foreign Company in India- online

Overview
Company Structure
Process
Documents
FAQs

Company Incorporation for Foreigners in India

Whether you are a foreign individual, a foreign-based company, or a non-resident Indian, you can establish an Indian company.

If you're looking to set up a business in India, LegalBabu can help make the process easy and stress-free. Our team of experts understands the legal requirements and procedures involved in company incorporation and can provide you with the guidance you need to get your business up and running quickly. From obtaining the necessary licenses to registering your company with the appropriate government agencies, we'll handle everything for you so that you can focus on building your business.

You may incorporate a company as an Indian subsidiary of foreign company, or you may incorporate an Indian company in which you can have 100% ownership as an overseas resident or non-resident individual. Registering a Foreign Company in India is now a streamlined online procedure, with the entire process conducted through the MCA website.

Furthermore, there are mainly two ways for a foreign company to start a business in India, by setting up an Indian subsidiary of a foreign company or by opening a branch office of a foreign company. Foreign entities can also establish liaison office or project office purely for non commercial activity.

A subsidiary company is one that is owned, controlled, or managed entirely or partially by another company. A parent company must own more than 50% of the shareholding in a subsidiary company in order to establish it, and the company that owns 100% of the shareholding in a subsidiary is known as a wholly owned subsidiary company. As a result, as a foreign business owner, you can establish a 100%-owned subsidiary company in India, provided that the company's activity is permitted by the government.

To avoid any hassle or uncertainty, foreigners are advised to hire a corporate secretary firm like Legal Babu, which can help clients with the whole incorporation process. In addition to company formation services, Legal Babu also provides services like accounting, annual filing services, licenses, permits, and taxation services in India.

At LegalBabu, we offer a remote company incorporation experience that is unparalleled. You don’t have to fly to India. Everything can be done online through our seamless platform. Our business specialists will help make the incorporation and bank account opening processes seamless and easy.

Company Structure

What are the types of companies that a foreigner can incorporate in India?

In order to start the incorporation process, you first need to choose the appropriate type of company structure that not only best suits your business objectives but also addresses liability and tax planning concerns.

The following types of company structures are available for foreigners to set up a business in India:

Private limited company—For a minimum of 2 or more shareholders.
Public Limited Company—For 7 or more shareholders
Limited Liability Company—For 2 or more partners
Producer Company—For agricultural business
NBFC Company—For financial business
Section 8 Company—Non-Profit Company

Process

For foreigners and non-residents, there are two stages to registering and running a company in India.

1. Company formation procedure

Steps involved for company incorporation in India

Choose company structure
Registered office address
Procure the digital signatures of directors.
Obtain the DIN no of directors.
Company name approval.
MOA/AOA drafting.
Incorporation certificate.

2. Post-company formation procedure

Here’s what you need to run a company in India:

Appointment of a tax auditor.
Open a business bank account.
Business license.
Registrar of Companies (ROC) annual compliance
Reserve Bank of India (RBI) annual compliance

We give you the best services when it comes to managing your company incorporation, company secretary, business license, accounting, and taxation in India. We’ll take care of it all.

We will help you understand and fulfill the official requirements that the Indian government requires of you to incorporate and manage your business in India.

Company Secretary

A government-certified expert who covers you on compliance reporting

Indian law requires each company to have a company secretary who is not only authorized to file incorporation documents but also in charge of state compliance, files annual returns and resolutions on changes, prepares annual general meetings, and processes dividend distribution.

Documentation

We collect all the documents online, organize them, and send you the application to sign electronically.

We need the identity and address proof of the directors of the company. Next, we need the shareholding structure—all of that goes into the company constitution that we’ll draft for you. Finally, let us know your authorized capital — $1 is enough.

Open an account

We partner with India's leading banks to open an account without you physically visiting the branch. Each bank has its own procedure for opening a bank account. They do KYC interviews online and send couriers to exchange documents. Once an account is opened, you may start financial transactions.

Tax auditor

Indian laws require that you appoint a tax auditor for your company as soon as you receive your incorporation certificate. Moreover, you need to file several tax and compliance reports every year. Our tax specialist will organize your documents, prepare reports, and file them neatly and in a timely manner. We also proactively advise on exemptions so you can save and pay taxes smartly.

Even if you have no transactions, you still need to file annual reports, financial statements, and annual tax returns at the registrar of companies. It’s crucial to prepare them right and on time; otherwise, your company and the director could face fines and penalties.

Business licence

Depending on the nature of your business in India, you will need to obtain a license and registration from the appropriate government authorities. Our business specialists will guide you through the process of obtaining any necessary permits or licenses.

Documents

Documents requirement-company incorporation for foreigners : -

For Indian directors and shareholders (natural persons),

Passport-size photograph
Copy of pan card
Copy of passport, driving license, or voter identity card
Proof of residence (electricity bill or telephone bill, mobile bill, bank statement)

For foreign directors and shareholders

A Photograph
Apostille / notarized copy of proof of residence
Apostille or notarized copy of identity proof

Documents required for the registered office:

Latest electricity bill, mobile bill, and telephone bill (business place)
Copy of rent agreement (if renting property)
Copy of property papers (if you own property)
Landlord NOC (format will be provided)

If the shareholder is a foreign corporate body:

Apostille / notarized copy of the resolution of a foreign company mentioning the name of the authorized representative and the number of shares subscribed.
Apostille or notarized copy of the identity proof of the authorized representative, if such person is a non-resident of India.
Apostille or notarized copy of the charter of a foreign company

All documents must be self-attested and submitted in soft copy.

FAQS

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Have questions about the subsidiary company?

We have you covered:

Can foreign entrepreneurs start a business in India?

Yes, with amazing tax benefits, friendly government policies such as ease of doing business and an easy incorporation process, India is one of the most favourable countries in the world for entrepreneurs looking to register a company or expand their business.

The only requirement to incorporate a company in India is that you must have at least one resident director — an Indian national and a permanent resident.
How much is the minimum capital to form a subsidiary company?

There is no minimum capital requirement and hence no burden of putting in a large amount to start a business, as previously required in the company bank account. This amount can be introduced as per the decision of the business owners.
Do I need a company address?

Yes, A real India mailbox for your legal correspondence.

All Indian companies must have a registered address in India. It goes on all legal documents.
How does LegalBabu help in incorporating a company in India for foreigners?

We thoroughly examine whether the company name you've selected is available. You send us your identity and address proof, details of directors and shareholders. We prepare all the necessary documents, send them to you for signature, and submit them to the government department that is the registrar of companies (ROC). Once an incorporation certificate has been issued, your company is operational.
Do the directors have to be residents in India to form a company?

Yes, one director has to be a local person in India.
Who can be appointed as the director of the company?

You can appoint one or more directors in the company, depending on the business structure. One of the directors, however, must be an Indian resident. They must be natural and 18 years of age or older.
How many shareholders does a company need?

In a private limited company, the transfer of shares is restricted, and the number of shareholders may range from a minimum of one to a maximum of fifty. Public limited companies must have a minimum of one and a maximum of unlimited shareholders.
What is the minimum share capital requirement?

It depends on the type of business entity you wish to set up.
What happens after company incorporation?

You will receive a Certificate of Incorporation from the ROC. The incorporation certificate will have your Corporate Identity Number (CIN). After incorporation of the company, it is necessary to open a current account in the name of the company with any RBI-approved bank in India. All the transactions in the name of the company should be transacted through the company bank account only.
How long will the whole company registration process take?

We can set up a company in as little as 15 days. The most important factor is to collect all the documents. Once you’ve handed them over to us, we can act fast. Keep in mind that the authorities only process registrations during working days.
Are there any restrictions on who can serve as a director or own shares?

The Indian government has liberalized foreign investment regulations, and foreign companies can invest in most sectors of the Indian economy subject to certain sector-specific restrictions.
What are the compliance requirements for an Indian subsidiary company?

An Indian subsidiary company must comply with various laws and regulations, including filing annual returns, maintaining proper books of accounts, conducting annual general meetings, and paying taxes.
What are the tax implications for a foreign company operating in India?

A foreign company operating in India is subject to various taxes, including corporate tax, dividend distribution tax, and withholding tax.
Can a foreign company repatriate profits earned in India?

Yes, a foreign company can repatriate profits earned in India subject to the applicable foreign exchange regulations and guidelines.
Can a foreign company own property in India?

Yes, a foreign company can own property in India subject to the applicable foreign investment regulations and guidelines.
What is the process for registering a trademark for an Indian subsidiary company?

An Indian subsidiary company can register its trademark with the Trademark Registry by filing an application and paying the requisite fees. We can help you register a trademark in india that will be valid across the globe.
What are the requirements for appointing a statutory auditor for an Indian subsidiary company?

An Indian subsidiary company must appoint a qualified chartered accountant as its statutory auditor within 30 days of its incorporation.
Can a foreign company incorporate a branch office in India?

Yes, a foreign company can incorporate a branch office in India subject to the applicable
Can a foreign company hold 100% shares in an Indian subsidiary company?

Yes, a foreign company can hold 100% shares in an Indian subsidiary company. However, certain industries have specific restrictions on foreign investment, and it is important to consult with a legal expert to understand the restrictions that apply to your industry.
Is it mandatory to have an Indian resident director for an Indian subsidiary company?

Yes, it is mandatory to have at least one director who is a resident of India for an Indian subsidiary company.

Incorporation of Foreign Company in India- Online Process

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