Foreign Company Registration

Introduction to Foreign Company Registration

A Foreign Company refers to an entity that is incorporated outside India but has a place of business or a physical presence in India, or carries out business activities in India. Foreign companies can operate in India by setting up various types of offices or subsidiaries, such as a Liaison Office, Branch Office, Representative Office, or Project Office. They must comply with the provisions of the Companies Act, 2013 and the Foreign Exchange Management Act (FEMA).

Key Features of a Foreign Company

1. Incorporation: A foreign company is incorporated in a foreign country and must register its business in India with the relevant authorities.
2. Mode of Establishment: A foreign company can establish its business in India through:
   • Wholly Owned Subsidiary
   • Joint Venture
   • Liaison Office
   • Branch Office
   • Project Office
3. Legal Compliance: Must follow the guidelines provided under the Companies Act, 2013 and RBI’s regulations.
4. Business Activities: A foreign company can carry out specific activities as per the regulations, such as trading, providing consultancy, research work, and more.

Benefits of Setting Up a Foreign Company in India

1. Market Expansion: Establishing a foreign company allows international businesses to tap into India’s large and diverse market.
2. Investment Opportunities: Foreign companies can invest in Indian ventures, fostering bilateral trade and economic growth.
3. Tax Benefits: Foreign companies may benefit from certain tax treaties and exemptions on repatriating profits to their home countries.
4. Brand Presence: Establishing a company in India increases the visibility of international brands in the Indian market.
5. Legal Framework: A Foreign Company provides a structured way to operate under Indian laws while benefiting from global business practices.

Types of Foreign Company Operations in India

1. Liaison Office / Representative Office:
   • Mainly for non-commercial activities like market research, promoting brand awareness, and networking.
   • Cannot directly engage in commercial activities, and funds must be remitted from the parent company.
2. Branch Office:
   • Allows foreign companies to engage in full-scale commercial activities, including manufacturing, consultancy, and research.
   • Requires approval from the Reserve Bank of India (RBI) and compliance with specific financial criteria.
3. Project Office:
   • Used when a foreign company executes a project in India funded by international sources or through a term loan from an Indian bank.
   • Does not require prior RBI approval in certain cases.

Documents Required for Foreign Company Registration

To establish a Liaison Office or Branch Office, the following documents are necessary:

1. Business Sector Information: To determine whether RBI approval is needed.
2. Certified Copy of the Charter/Statutes: The foreign company’s charter, statutes, or memorandum, with certified translations if not in English.
3. Office Address: The principal office address of the foreign company and the office in India.
4. Directors’ Information: List of directors and company secretary.
5. Authorized Person Details: Name and address of the person in India authorized to accept service of process.
6. Previous Business Addresses: Details of any past business addresses in India.
7. Declaration: A declaration that the directors have not been convicted or debarred from forming companies.
8. RBI Approval: The foreign company must submit proof of RBI approval under the Foreign Exchange Management Act (FEMA), if applicable.