Company Registration in India by MNC and NRIs

 Foreign Company Registration in India 


Over the years, the Government of India has eased the restrictions for making investment in India by foreign companies, foreign citizens and Non Resident Indians. This has resulted in more and more foreign company registration in India.

Further, the government has framed the policies for extending the Ease of Doing Business in India and made necessary changes in this regard across the board whether it is FEMA regulations, FDI guidelines or RBI policies. Various states have also provided one window clearance system to reduce the time taken for various approvals before commencement of business operations. These measures have facilitated improving the ranking of India in ease of doing business. Further, this has encouraged more and more companies opting for company registration in India.



 The government has provided its permission even to NRIs to make investment in India. Accordingly, NRIs and foreign companies can make investment in India in any of the following manners:

 

a)      By way of purchasing shares of an Indian company or

b)      By making investment in the capital of an existing Indian company or

c)      By new business set up in India.

 

Various options of foreign company registration in India

 There are various options through which NRIs and foreign companies can set up business in India:

 

1)      Subsidiary company registration in India- When foreign company held more than 50% shares of an Indian company (whether existing or new company), the Indian company becomes subsidiary of the foreign company in India. When foreign company holds 100% shares of an Indian company, the Indian company becomes wholly owned subsidiary of the foreign company.

 Subsidiary company registration is the most popular form of company registration in India. It can be both in the form of private limited company as well as public limited company.

 

2)      Second option is LLP registration in India.

3)      Third option is Joint Venture registration in India

 

As per FDI guidelines given by RBI, investment in private limited as well as public limited companies can be done under automatic route in most of the sectors. Further, in case of LLPs, FDI are allowed under the automatic route only in those sectors or activities which allow 100% FDI through the automatic route.

 

In case of public limited company, minimum 7 investors are required and there is no limit for maximum number of shareholders. In case of private limited company, minimum 2 shareholders and maximum 200 shareholders can be appointed.

 Following further points shall be kept in mind while opting for public or private limited company registration in India:

 a)      Indian company shall have minimum 3 Directors in case of public limited company and 2 directors in case of private limited company. Out of same, atleast one director shall be an Indian Resident and Indian Citizen. All directors need to obtain Director Identification number and Digital Signature certificates.

 b)      One local office address is required for showing registered office of the Indian company. Copy of rent agreement, latest electricity bill and NOC from landlord/owner is required to show registered office of the Indian company.

 c)      The procedure of private limited company registration would be to first obtain digital signature of all the directors, then apply for company name approval, then draft the charter documents of the Indian company and lastly to apply for final incorporation of the company.

 d)     Once company is incorporated, bank account needs to be opened; share subscription money needs to be brought into the bank account in the proportion of shareholding of the company. Also, company need to apply for GST registration and certificate of commencement of business.

 e)      Within 30 days of company registration, board meeting of the company needs to be held and auditor needs to be appointed.

 f)       In case of subsidiary company, on receipt of share subscription money from the foreign parent company, RBI needs to be intimated by filing necessary forms.

 

Thus, form the foregoing, it may be inferred that there are many options of foreign company registration in India by foreign enterprises as well as NRIs. Further, one of the most popular and feasible option is in the form of subsidiary company registration in India.

 

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