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India is a fast developing country with a lot of opportunities for not only Indians but also a foreign citizen. Due to globalization and many other promotional schemes like make in India initiative, is an encouraging step for investors to invest their money in India. Any Foreign Company in India incorporating registered office has to follow certain rules, regulations, and guidelines as laid down by Companies Act, 2013 and RBI Guidelines etc. This article describes the procedure of Foreign Company Registration in India.
Table of Contents
“A foreign company is any company or body corporate which is incorporated outside India which either —
A foreign company can enter the market of India and set up its business operations in India by following methods:
A foreign company invests 100% FDI in private limited company through automatic route then it becomes a Wholly Owned Subsidiary Company of that Foreign Company. Like if XYZ of US owns 100% shares in AB Ltd of India then AB Ltd becomes a subsidiary company of XYZ
WOS is an entity whose whole share capital is in the hand of a foreign corporate body. It can be incorporated into a Private Limited Company by guarantee or shares or an unlimited liability company.
It is an arrangement where two or more parties cooperate to achieve a commercial object or run a business. It may take various forms like Company, Limited Liability Partnership, partnership firm etc. it can be on a long-term basis like running for perpetuity or for a limited time based on the object. It can involve an entirely new entity or an existing business. Hence it is a very flexible concept.
Governmental approval of either from RBI or FIPB shall be required if any foreign partner or NRI is involved in a joint venture. If incorporation is done through approval route then RBI Approval shall be required and in case the incorporation is be done through approval route then FIPB approval shall be required.
The entity has to select a local partner with whom you want to enter into joint venture then a Memorandum of Understanding or a Letter of Intent is to be signed which will state the basis for the joint venture agreement. All the terms should be discussed thoroughly and negotiated and must be consistent with regional as well as international law. It should address the important matters like Dispute resolution agreements, law Applicable, holding shares, Transfer of shares, Board of Directors Non-Compete, Confidentiality etc.
It can undertake the following activities
RBI prescribes the setting up of Project office in India by a foreign company.
A Foreign company can conduct business activity in India by opening a branch office with the prior approval of RBI.
It can undertake the following activities:
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