FOREIGN COMPANY REGISTRATION IN INDIA- FEW PRACTICAL PROBLEMS
FOREIGN COMPANY REGISTRATION IN INDIA
India has become one of the
fastest developing economies of the world in the recent years which has
resulted in more and more countries and companies across the world, interested
in doing business in India and business with India.
Also, India provides many options of setting up business
in India by foreign companies and foreign nationals.
Some of the options of Foreign
Company Registration in India are
given below:
1) Business set up in India in the
form of Incorporated entities i.e. Private limited company , Limited Liability Partnerships, Joint Ventures etc.
2) Business set up in
India in the form of unincorporated entities like Branch
office, Liaison office and Project office.
The types of entities as
mentioned above, depends upon the nature of business of the foreign entity as
well as long term business goals and vision of the foreign company.
Whatever may be the type of
entities, some of the common problems faced by foreign entities in India are as
under:
1)
Preparation
of Digital Signature Certificates or DSC
Whether it is a subsidiary
company or normal Indian company of LLP, Digital signature certificates or DSC
are required by every Director or partner. This is the first step towards entire
process of company registration in India. The process of DSC preparation
nowadays requires video verification.
Although this may still be less
problematic for Indian nationals, however, when it comes to foreign nationals,
it is quite problematic as firstly, their documents are uploaded by the agency
preparing the DSC. Then, OTPs are sent
twice on their email id and only 5 minutes of time frame are given within which
they need to provide OTP to DSC agency for further processing.
Lastly, video verification needs
to be done by the applicant wherein they have to show original documents in the
camera. Most of the foreign nationals and citizens does not find the entire
procedure smooth and always cribs about the same.
The government must come out with
a simple procedure for DSC preparation for both Indian nationals as well as
foreign citizens.
2)
Notarization
and apostille of foreign documents
Another major problem faced at
the time of foreign
company incorporation in India is
that all the documents which are required from foreign
national/citizens/companies need to be notarized and apostilled or notarized and
consularized in the home country. This is again a very time consuming and
expensive proposition for the foreign companies/foreign nationals since for
apostille, first of all appointment need to be taken from the concerned
authorities. Secondly, fees charged for notarization and apostille are sometimes
more than the entire cost of company registration in India.
This is another area where the
government needs to simplify the procedure for foreign nationals as this really
desists them from opting for company incorporation in India.
3)
Payments
received in the bank account
Another practical issue faced is
that when the Indian advisor or consultants involved in company formation in
India, asks for advance from the foreign company, they normally wire transfer
in the consultants Indian bank account and do not provide swift details
especially in case of payments received from China and Hongkong. Due to this
reason, Indian banker does not credit or there is quite a delay in credit of
amount in Indian consultants account.
This is another area where
government intervention is required for smooth and hassles free transfer of
money into Indian bank account with limited documentation.
Thus, above are some of the
practical problems faced at the time of foreign
company registration in India which requires immediate attention
of the concerned authorities in order to attract more and more companies in
India and improving in the index of ease of doing business in India.
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