SUBSIDIARY COMPANY REGISTRATION IN INDIA- SOME IMPORTANT POINTS
Added: (Sat May 07 2022)
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SUBSIDIARY COMPANY REGISTRATION IN INDIA
One of the most popular forms of foreign company registration in India is in the form of registering an Indian subsidiary of the foreign parent company.
In this write-up, we would discuss about some important points relating to subsidiary company registration in India.
1) Subsidiary companies are those companies in which parent company hold more than 50% shares or exercise control over its board of directors or on decision making.
2) When parent company holds entire shares or 100% shares, the subsidiary company becomes wholly owned subsidiary.
3) Unlike Branch office and Liaison office, there is no restriction on business activities of the subsidiary company in India. Accordingly, subsidiary company can undertake all the business activities subject to RBI guidelines as well as Memorandum and Article of Association of Companies.
4) Unlike Branch offices which are taxable at higher rates of 40% plus surcharge plus education cess, subsidiary companies are taxable at tax rates of 15%/22%25% depending upon nature of business of the subsidiary company and preference of tax opted by the same.
5) In the subsidiary company, both the shareholders can be foreign entities. In such a case, they need to appoint an authorized representative for representing them in the annual general meetings.
6) In the Indian subsidiary company, at least one director must be an Indian Resident and Indian Citizen. Second director may be a foreign citizen.
7) Once a subsidiary company is registered, foreign and Indian shareholders need to bring share subscription money into the Indian subsidiary company’s bank account. Such share subscription money from the foreign shareholders are considered as Foreign Direct investment [ FDI] in India and Indian subsidiary company has to do some compliance with RBI relating to receipt of such FDI in India like creation of entity master on RBI website, Filing of form FCGPR on single master form etc.
8) In case any of the shareholders are resident or citizen of those countries which has land locked with India like China, Nepal, Pakistan, Hong Kong, Afghanistan, Bhutan, Myanmar, Sri Lanka etc., in such cases, for receiving any share subscription money or FDI, prior approval of Government of India ( Foreign Investment Facilitation Agency] need to be taken by filing proper application and attaching lot of documents both manually as well as after login into FIFP .
We have highlighted some of the important points which need to be kept in mind at the time of subsidiary company registration in India.
In case you need any further information or clarifications, you may contact EzyBiz India through www.ezybizindia.in or call at +919899217778