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FOREIGN COMPANY REGISTRATION IN INDIA- FEW PRACTICAL PROBLEMS

• Posted by Ezybiz India May 1, 2022 Filed in Business #foreign company registration in India  16 views
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  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:

  • Business set up in India in the form of Incorporated entities i.e. Private limited company, Limited Liability Partnerships, Joint Ventures etc.
  • 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:

  • 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.

  • 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.

  • 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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