Foreign Subsidiary Incorporation
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How to Incorporate a Foreign Subsidiary in India?
The process of incorporation of subsidiary of foreign company in India is similar to incorporating a normal company in India. Following is the procedure for the same:
1) The SPICe+ form shall be filed for foreign subsidiary incorporation. Part-A of the SPICe+ form can be used for the reservation of the name in which case it is reserved for 20 days. If the company does not want to go for a name reservation, then it can continue with Part-B of the form.
As per Rule 8A of the Companies (Incorporation) Rules, 2014, in the case of a foreign company incorporating a subsidiary in India, then the original name of the holding company can be used as it is along with adding the word ‘India’ or the name of any Indian state or city, if otherwise available. This will ensure that the subsidiary company receives the benefits of the goodwill of the foreign holding company. The following documents shall be submitted if the name of the foreign holding company is used:
- NOC of the foreign company to use the same name.
- Apostilled copy of the charter of the foreign company.
- Apostilled copy of the resolution of the foreign company.
While filling the information in Part-A of the form, the following information should be provided:
- Type of Company (OPC, Section-8 company, Producer Company, etc.)
- Class of Company (Private limited or Public limited)
- Category of the Company (Limited by shares, limited by guarantee, unlimited company)
- Sub-category of the Company (Non-government, Union government, State government, subsidiary of a company incorporated outside India)
- Description of the main division
- Particulars of the proposed or approved name
2) Save the information and submit it. After clicking the submit tab, you will be provided with two options, i.e., ‘Submit for Name Reservation’ or ‘Proceed for Incorporation’. In case you go for a name reservation, you will have to pay a nominal fee of Rs. 1000.
3) Thereafter, you can proceed for Part-B of the SPICe+ form. While filling the Part-B of the form, the following documents shall be required:
- Notarised / Apostilled copy of the resolution passed by the foreign company mentioning the name of the authorized representative, number of shares subscribed.
- Notarised / Apostilled ID proof of the authorized representative will be required in case he is a non-resident.
- Notarised / Apostilled copy of the charter document of the foreign company.
- Name of at least one director who is resident in India.
- Name of the nominees (applicable in case of wholly-owned subsidiaries).
- The main division of industrial activity.
- Notarised / Apostilled copy of Memorandum of Association (Physical copies as e-MOA can’t be prepared).
- Notarised / Apostilled copy of Articles of Association (Physical copies as e-MOA can’t be prepared).
- Registered Office address proof (Rent agreement, lease agreement, etc.)
- Copy of the utility bills
- Director Identification Numbers of all the directors
- Digital Signature Certificates
- DIR-2 declaration for consent to act as director shall be required from both the resident as well as non-resident directors.
- INC-9 furnishing declaration to act as a subscriber or first director.
4) Fill the required details and upload relevant attachments in the Form SPICe+ including the linked for AGILE-PRO-S and Form INC-9. Once submitted using the relevant DSC, the ROC will review the details and grant the Certificate of Incorporation accordingly.
Post Incorporation Procedure
After the foreign subsidiary incorporation, the following compliances shall be adhered to:
- The foreign subsidiary company in India shall receive the subscription money from the foreign holding subscriber company.
- The subsidiary company shall file e-Form INC-20A in relation to the declaration of the commencement of the business.
- Collection of Foreign Inward Remittance Certificate (FIRC) from the bank.
- The subsidiary company shall issue the share certificates to the subscribers.
- The foreign subsidiary company shall file the FC-GPR return with the RBI in relation to issue of share capital against investment by the foreign company in the foreign company subsidiary in India.
- Once place of business is established, Form FC-1 shall be filed within 30 days along with the prescribed documents.
Following are the documents required for the incorporation of the foreign subsidiary company in India
- Copy of the resolution passed by the foreign company (Notarised / Apostilled)
- ID proof of the authorized representative of the foreign company duly notarized / apostilled if such representative is not resident in India
- Certificate of Registration
- Charter documents i.e., MOA and AOA (Notarised / Apostilled)
- Details of the nominee shareholder of the foreign company (in case of a wholly-owned subsidiary)
- Any other document as may be required
- Identity Proofs
- Address Proofs
- Digital Signatures
- Director Identification Number
- Form DIR-2 for consent to act as director (in case of a non-resident director, the same shall be notarized / apostilled)
- INC-9 i.e., the declaration of the subscriber or the first director
- Any other document as may be required
Resident director is not required to hold the shares in the foreign company. Law only states that there must be at least one resident director.
In the case of incorporation of a private limited company, a minimum of 2 shareholders are required. Therefore, in the case of a foreign company incorporating a wholly-owned subsidiary in India, they will require to appoint a nominee shareholder who will hold one share in order to satisfy the criteria of the minimum number of shareholders.
SPICe+ form serves the following purposes within a single form: Name Reservation Company Incorporation Allotment of DIN Issue of PAN Issue of TAN EPFO registration ESIC registration Professional Tax registration Opening of bank account Allotment of GST number
AGILE-Pro-S is linked with the SPICe+ form that contains the application for obtaining the following registrations: EPFO registration ESIC registration GST registration Professional Tax registration Shop and Establishment registration Opening of the bank account.
SPICe+ form can be submitted three times.