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Company registration in India by Foreign Companies and NRI

• Posted by Ezybiz India June 12, 2022 Filed in Business #foreign company registration in India  13 views
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  Foreign Company registration in India

   

   

  During recent years, India has seen a surge in foreign company registration in India. This is due to the fact, that over the years, the growth story of India has encouraged.

  more and more foreign companies showing interest in setting up business in India and become a part of the Indian growth story.

  Further, various schemes of the government and conducive business environment for doing business in India has also contributed in aforesaid factor. The Government of India has allowed foreign direct investment and removed all the barriers that are attached with entry of new firm in India.

   

  To generate investment in India, government allowed NRIs as entities for investment as per regulation under Foreign Exchange Management Act, 1999.

  Accordingly, not only foreign companies but lots of NRIs and OCIs are also interested in company incorporation in India.

   

  Whereas NRIs prefer private limited companies, public limited companies and Limited liability partnerships for company incorporation, subsidiary company registration in India is most preferred by foreign companies as entity registration in India.

   

  In this write up, we have discussed about various options of entering into India by foreign companies as well as NRIs and start the business operations.

   

  For foreign companies there are following options to enter India

   

  1. Liaison office- This entity cannot do any business operations in India. It only acts as channel of communication between foreign entity and Indian customers. They cannot negotiate any contract with Indian customers. It is considered as Foreign Company in India. It has to take approval of RBI for setting up business in India and run through remittance received from its parent company.

   

  1. Branch Office- This entity can do such activities in India as permitted by RBI. They cannot do manufacturing in India. It has to take approval of RBI for setting up business in India and run through remittance received from its parent company as well as profits earned from Indian business operations. It is considered as Foreign Company in India

   

  1. Project office- These are set for undertaking any specific projects and are closed once projects are completed. It has to take approval of RBI for setting up business in India and can earn profits from Indian business operations. It is considered as Foreign Company in India

   

  1. Wholly owned subsidiary company- These entities can do all types of business activities as per RBI guidelines and as permissible by its MOA and AOA. These are considered as an Indian entity. It requires approval of Ministry of Company Affairs (MCA) for incorporation of company in India. When more than 50% shares of Indian companies are held by parent company, it is called as wholly owned subsidiary of parent company in India. When less than 50% shares of an Indian company are held by parent company, Indian company is considered as subsidiary company in India. WOS or subsidiary company can be opened in the form of private limited company as well as public limited companies.

   

  Further, it may be noted that Subsidiary company registration in India is one of the most popular and widely used form of entity registration by foreign companies.

   

  1. Limited liability partnerships and- It has advantage of both partnership as well as corporate form of entity. It is mostly preferred by professionals. It is also considered as an Indian entity.

   

  1. Joint Ventures- JVs are also another form of entity registration in India. It can be both contractual as well as on basis of share transfers. It is also for a particular period or purpose and closed once purpose is achieved.

   

  Out of the above, first 3 falls under the category of unincorporated entity structure and last 3 falls under incorporated entity structure. Depending upon the business requirement and long term vision of the foreign companies, they may chose one of the aforesaid entity for doing business in India.

   

  For NRIs and OCIs, last 3 options as mentioned are more conducive for setting up business in India. Each entity has its own pros and cons and depending upon business need of the NRIs, proper entity may be suggested.

   

  Thus, both MNCs as well as NRIs have lot of options available for business set up in India. Out of same, subsidiary company registration in India by foreign companies and Public/Private limited companies by NRIs are most preferable.

   

  In case you need any clarification or have any feedback, please call @9899217778 or visit www.ezybizindia.in