Foreign Subsidiary Company Registration

A foreign subsidiary company is a business entity in India that is entirely owned by a foreign company or parent organization. Registering a foreign subsidiary company in India allows foreign businesses to establish a full operational presence in the country, take advantage of its dynamic market, and enjoy the benefits of India’s growing economy. Apnaa Filing simplifies the entire registration process for foreign subsidiaries, ensuring all legal, regulatory, and compliance requirements are met efficiently.

1. What is a Foreign Subsidiary?

Definition: A foreign subsidiary is a company in India where the parent company, located outside India, holds at least 50% of the company's shares. The parent company has a significant control over the operations and management of the subsidiary.
Ownership: The foreign company owns the majority stake in the subsidiary (at least 50%), though it can also have 100% ownership in the case of a wholly-owned subsidiary.
Objective: A foreign subsidiary allows the parent company to directly engage in business operations in India, create a brand presence, and leverage local market dynamics.

2. Advantages of Foreign Subsidiary Company Registration

Full Control: A foreign subsidiary allows the parent company to have direct control over operations and business decisions in India.
Legal Protection: A subsidiary is a separate legal entity, offering the parent company limited liability and protection against business risks.
Tax Benefits: Foreign subsidiaries in India may benefit from tax treaties and exemptions under Indian law, such as exemptions on certain income and tax holidays in specified sectors.
Access to Local Market: A subsidiary provides greater access to the Indian market, helping foreign companies tap into a large consumer base.
Ease of Doing Business: The subsidiary enjoys all the rights and privileges of an Indian company, including the ability to sign contracts, open bank accounts, and hire employees.

3. Documents Required for Foreign Subsidiary Company Registration

Foreign Company Documents:
- Certificate of Incorporation of the parent company.
- Latest audited financial statements of the parent company.
- Board Resolution approving the formation of a subsidiary in India.
Identity Proof of Directors:
- Passport or other government-issued ID of directors and authorized signatories.
Proof of Registered Office in India:
- Recent utility bills, rent agreement, or NOC from the property owner where the office will be located in India.
Power of Attorney (POA):
- POA granting authority to sign documents in India on behalf of the foreign parent company.
Additional Documents:
- Approval from the Reserve Bank of India (RBI) for foreign investment, if required.

4. Step-by-Step Foreign Subsidiary Company Registration Process

Obtain Digital Signature Certificate (DSC):
- Authorized signatories of the subsidiary must obtain a DSC for filing documents electronically.
Apply for Director Identification Number (DIN):
- Each director of the foreign subsidiary must obtain a DIN (Director Identification Number) from the Ministry of Corporate Affairs (MCA).
Apply for Name Reservation:
- Submit a name for the foreign subsidiary to the MCA for approval. The name must comply with Indian regulations.
Draft and Submit the MOA and AOA:
- Prepare the Memorandum of Association (MOA) and Articles of Association (AOA), which define the business objectives and governance structure of the company.
File the Incorporation Documents:
- File the necessary incorporation documents with the MCA for approval, including details of the parent company, MOA, AOA, and director information.
Obtain Certificate of Incorporation:
- Once the registration is approved, the Registrar of Companies (ROC) will issue a Certificate of Incorporation for the foreign subsidiary.

Key Points to Remember

Ownership: A foreign subsidiary company is typically owned by the parent company, either partially or fully (100%).
Regulatory Compliance: Foreign subsidiaries must adhere to Indian regulations under the Companies Act, FEMA (Foreign Exchange Management Act), and other relevant laws.
Timeframe: The process typically takes 30 to 45 business days for approval and registration, depending on the documentation and verification process.
Post-Incorporation Compliance: After registration, the subsidiary must comply with statutory requirements, such as annual filings, tax returns, and financial audits.