Incorporation of wholly owned subsidiary company in India

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Incorporation of wholly owned subsidiary company in India

India is a growing market with a huge population that with the right business strategy can bring in a good sum of profit to the companies. This being a major factor gathers a ton of international attentions in terms of investment and holdings opportunities.With the new rules that encourages direct foreigners investment and NRI’s investments into the Indian market has made it a blooming practise. This allows them to tap into the endless market and business culture Indian Sub continent brings to the table. The basic rule is that any citizen other than one who belongs to certain listed countries can own a business in India. This is entirely different from the concept of Branch office, as here the total business is acquired by buying in the shares of the company. The companies who are willing to start the subsidiary in India must do proper market research and also be aware of the liability and taxability status of the board. The company must at least contain one Indian member as the board director and it must be linked with a existing Indian Address for the company to be eligible in India. At Unilex Consultants we provide you a hassle free registration process which would be dealt by our professionals within a time frame of 15-20 days and is subjective to governmental processing time. Our team takes care of the documentation and aids in provide you the realistic estimation of cost.

Advantages of Opening of foreign company subsidiary in India

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LIMITED LIABILITY

As the incorporation is represented as an Indian company the directors can enjoy the benefit of unpaid shares only for their specific shares and not for the mistake of others.

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CONTINUITY

The company can exist as long as it is legally taken apart or the board decides to dissolve the company. The company's presence is not affected by the passing of the directors as such

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PROPERTY RIGHTS

The company can acquire and use properties under its name and this would be under the control of any of the shareholders and cannot be used for personal purpose.

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SHARES TRANSFERABILITY

The shares can be transferred easily between the shareholders and a single company can hold the 100% of the shares legally.

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FDI

Foreign Direct investments can be made without any prior government approval this acts as a easy to invest medium.

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CONTROL

The parent company gets to control all the activities of the company. As the members are also controlled in turn.

Documentation for Opening of foreign company subsidiary in India

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Passport size Photograph

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Copy of PAN Card

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Copy of Electricity Bil

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Sale Deed (if owned)

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Copy of Aadhar Card

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Address Proof (Bank Statement/Mobile/Telephone Bill)

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Copy of rent agreement (if rented)

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NOC

Packages



Note:


Process involved in registering a Incorporation of wholly owned subsidiary company in India

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1

Getting sorted with Director identification number and Digital signature

1-2 working days

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2

Applying for the name

3-4 working days

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3

Filling for the incorporation

3-5 working day

Requirements for Opening of foreign company subsidiary in India

    - The subsidiary is purely based out of the equity basis.
    - wholly owned company is different from a subsidiary company as it might or might not have the full 100% share status as such of a wholly owned company.
    - At Least 50% of the Indian Company’s shares must be held in order to have the subsidiary status
    - The members of the board can also be controlled to gain the power.
    - At Least 2 directors must be presented provided one of the director must be an Residing Indian citizen.
    - All the subsidiary companies fall under the same Provisions of companies Act 2013 and are treated as an indian company

Types of approval route for foreign subsidiary

Investment under automatic route :
In terms of the automatic route for the investment to happen there are no prior steps to be taken by the foreign resident, they can just straight up invest in the company but, after the equity is done for it to be valid the filings has to be done within the 30 days of investment by following the procedure of Reserve Bank of India (RBI).
Investment Under Government route :
In most cases automatic rules can be applied but for certain cases the involvement of the Foreign Direct Investment (FDI) rules involvement is required. Here the rules has to followed and only after which the equity can be bought.

FAQs About Opening of foreign company subsidiary in India

Can the company be incorporated without any Indian director?
No, it is not possible as by law there must be at least one Indian Director who should be residing in India and the proofs must be produced for the same.
What is a subsidiary in India ?
Companies that don’t belong to the Indian criteria can take part in business in India via the subsidiary strategy where the stocks can be held but them to gain control over an Indian incorporated company.
What is a Digital Signature Certificate (DSC)?
A Digital Signature establishes the identity of the sender or signee electronically while filing documents through the Internet. The Ministry of Corporate Affairs (MCA) mandates that the Directors sign some of the application documents using their Digital Signature. Hence, a Digital Signature is required for all Directors of a proposed Company.
Can a citizen of other countries hold shares in the Indian subsidiary ?
Yes, it is possible and its the whole point of subsidiary systems and the FDI rules that would make it possible.
Why go with opening a foreign Company Subsidiary in India ?
Provides a blooming opportunity for foreign companies to do business and make profit. Is seen as an Indian Incorporation in most cases, as they are incorporated under the Indian Provisions of companies act 2013. The shares can be held by a single incorporation all alone which is considered as a fully/wholly owned Subsidiary in India. Shares can be traded easily between the board members or the stakeholders. No government approval is required for most cases.

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