Opening Subsidiary in India
Types and Options Subsidiary in India for
Foreign Investors
Subsidiary in India
Foreign companies can set up wholly-owned subsidiary in sectors where
100% foreign direct investment is permitted under the FDI policy. The
wholly-owned subsidiary may be either of the following business entities:
-
Private Limited Company
-
Public Limited Company
-
Unlimited Company
-
Sole Proprietorship
Foreign Companies can also set up their operations in India through the
business entities:
Such offices can undertake any permitted activities. Companies have to
register themselves with Registrar of Companies (ROC) within 30 days of
setting up a place of business in India.
Private Limited Company as a Subsidiary
A private company is a company which has the following
characteristics:
-
shareholders’ right to transfer shares is restricted;
-
the number of shareholders is limited to fifty; and
-
an invitation to the public to subscribe to any shares or debentures is
prohibited.
A Private Limited Company is the most popular form of business entity used
for Foreign Investors in India, including USA investors in India. It takes
some time to incorporate in India as there are various
steps required in forming a private limited company
in India. There are various steps required to
establish a business in India, before and after incorporation, as
mentioned hereinafter.
Public Limited Company as Subsidiary
A public company is defined as a company which is not a
private company. The following conditions apply only to a public company:
-
It must have at least seven shareholders.
-
A public company is not authorized to start business upon the grant of the
certificate of incorporation. In order to be eligible to commence business
as a corporation, it must obtain another document called "trading certificate".
-
It must publish a prospectus or file a statement in lieu of a prospectus
before it can start transacting business.
-
A public company is required to have at least three directors.
-
It must hold statutory meetings and obtain government approval for the
appointment of the management.
There are several other provisions contained in the
Companies Act 1956 which are applicable only to public companies and should
be consulted.
|
IT
is mandatory for foreign investors to obtain governmental approval before
opening a subsidiary in India or forming a joint venture in India. In some sectors
certain restrictions may apply.
_____****_____ |
For a foreign Investor in
India it is very important to choose a right kind of business or
corporate entity which best suits its purposes and takes care of
liability issues and tax planning issues. Foreign Companies
planning to do business in India should pay special attention to
Entry Strategies in India for Foreign
Investors and corporate structuring to save taxes to the best extent allowed
by laws and international tax treaties.
It is also mandatory for
foreign investors or foreign shareholders, both individuals and
corporate shareholders, to seek
Government Approvals for Investing in India In some special cases
Foreign Investment
Promotion Board, FIPB Approval for Foreign Investment in India
is required. In other cases
Reserve Bank of India, RBI Approvals for Foreign Investment in India is
required.
The sectors where RBI Approval for foreign investors is available under automatic
route can be found at
FDI in India Sector wise Guide.
There are various
steps required to establish a business
in India, before and after incorporation, as mentioned
hereinafter. See also the
Procedure for Formation of Company in India. See also USA Company
forming a subsidiary in India.
See also
Doing Business
with India Free Guide
|
FDI in India Sector wise Guide | Formation of
Subsidiary in India | Starting a Business in India |
Opening Branch
in India
|
Incorporating company in India |
Procedure for Formation of Company in India |
Government Approvals for Investing in India |
Entry Strategies in India for Foreign
Investors |
FIPB Approval for Foreign Investment in India |
RBI Approvals for FDI in India |
FDI
in Small Scale Sector in India Further Liberalized | Tax Rates in
India | Withholding
Tax Rates For Foreign Companies Doing Business In India Under The Tax Treaties
|
Annual Corporate
Filings in India | Joint Ventures in India
|
Outsourcing to India |
Legal Outsourcing
Services Offered by Us
Madaan & Co. has helped
foreign
companies in setting up there operations in India
and other countries. A careful tax planning is required before
opening a subsidiary, branch, joint venture, project office or
liaison office in India. We can help you in corporate planning,
corporate structuring
and setting up in India
and other countries. We have also helped US law firms in
handling their India related legal work. We can help
your law firm or company in setting up in India and
other countries. Click
here to Contact us
|
|
Contact us
for:
-
All legal services regarding Doing
Business in India
-
Incorporating in a company in India
-
Opening a
Branch Office
-
Opening a
Project Office
-
Setting up
Joint Ventures in India
-
Setting up a
subsidiary in India
-
Drafting Agreements
-
Negotiating
Agreements
-
Setting up
Outsourcing in India
-
Dispute Resolution
|
Our lawyers include those admitted to bar in the
United States of America and India. They have
undertaken legal maters in the USA, India and Europe.
They understand the multi-cultural and the
multi-jurisdictional aspects of international business
in this age of globalization. They include those educated
at Harvard Law School, Harvard University in the
USA and premier universities in India. They believe in
high moral and legal ethics. |
|
