Basic information


With the ease of doing business and Indian Government initiative like Make in India, Start-up recognition and promotions along with various other benefits and access to the best human resources in the World, foreign companies are keen to start their operations in India. A Foreign National (other than a citizen of Pakistan or Bangladesh) or an entity incorporated outside India (other than entities incorporated in Pakistan or Bangladesh) can invest and own a Company in India by acquiring shares of the company, subject to the FDI Policy of India. In addition, minimum one resident Indian Director is required for incorporation of wholly owned subsidiary of an Indian Company.


Broadly, there are two entry routes for Foreign Company viz.: automatic route and approval route. Under automatic route, prior approval of Government through competent ministry or the department concerned is required. And under automatic route, there is no requirement of prior approval.  Certain filings/intimations with the Reserve Bank of India within 30 days of receipt of investment money in India and filing of prescribed documents and particulars of allotment of shares within 30 days of allotment of shares to foreign investors. TO facilitate ease of doing business, upto 100% Foreign Direct Investment is allowed under the automatic route in most activities/sectors in India. Investment in activities / industries where automatic route is not available can be made with the approval of the Government. LEGALRAJ will assist in business set up in India.


Advantages of Indian Subsidiary Registration


1. Separate Legal Entity: A company is a legal entity and a juristic person established under the Companies Act, 2013. Therefore a company form of organization has wide legal capacity and can own property and also incur debts. The members (Shareholders / Directors) of a company have no personal liability to the creditors of a company for such debts.


2. Ownership Transferability: The Shares are freely transferable by a shareholder to any other person. Filing and signing of a share transfer form and handing over the buyer of the shares along with share certifibcates followed by intimation to the Company is enough to transfer the shares.


3. Uninterrupted Existence: A company has 'perpetual succession', which means continued / uninterrupted existence until it is legally dissolved. A company, being a separate legal person, is unaffected by the death or other departure of any member but continues to be in existence irrespective of the changes in membership.


4. Owning Property: A company being a juristic person, can acquire, own and alienate property in its own name. No shareholder can make any claim upon the property of the company so long as the company is a going concern.


5. Foreign Direct Investment: 100% Foreign Direct Investment (FDI) is allowed in many of the sectors through Company type business entity without any prior Government approval. FDI is not allowed in Proprietorship or Partnership, LLP requires prior Government approval. The policies of FDI and Government Norms are subject to change and shall be applicable from time to time.