Foreign company registration in India
Over the years, India has become one of the hottest destinations of investment by the global companies and no wonders; it has witnessed more and more foreign company registration in India in recent years.
Investors’ confidence has increased in India in recent years and there are lots of reasons for same as mentioned below:
Some of the reasons for same are as under:
a) It is one of the fastest growing economies of the world
b) India has vibrant democracy and world’s largest democracy
c) It is second highest English speaking country
d) It has highest numbers of professionals like doctors, engineers, technocrats etc.
e) It is number one in Information technology and ancillary services
f) It has biggest middle class consumer base with good purchasing power.
g) It has high skilled and cheap labor resulting in low cost of production
h) Government of India has introduced many schemes for attracting more and more foreign companies to set up business in India and make investment in India.
All the aforesaid reasons have resulted in influx of foreign investment in India.
There are many options for foreign companies to set up business in India.
Various options for foreign company registration in India
Following options are available for any foreign company for business set up in India namely,
1) As a subsidiary company
2) As a Joint Venture
3) As an LLP
4) As a branch office
5) As a Project office
6) As a Liaison office
Each of the aforesaid entities have their own unique characteristics and selection of any one of the aforesaid entities depends upon various factors like nature of business of parent company, long term objectives and vision and purpose of the parent company.
In case a foreign company is not very sure about doing business operations in India and only want to explore India on test check basis, it may opt for liaison office registration. However, if the foreign company has long term plans for doing business operations in India, it may opt for wholly owned subsidiary company in India.
Each type of entities as mentioned above, have different tax rates in India. Further, approvals for registration of aforesaid entities are normally given by Reserve Bank of India and Registrar of Companies. Further, in case of receipt of foreign direct investment in India from landlocked countries with India or in case of investment in sectors which are not in automatic route, prior approval is required from foreign investment facilitation portals.
Therefore, lot of procedures need to be fulfilled before getting approval from respective authorities for registration. Further, RBI also prescribes the permissible activities which may be undertaken by the foreign companies in India and in case of any contravention, penalty may be levied.
From taxation point of view, branch office and project office have maximum tax rates applicable and subsidiary companies have lower tax rates.
As far as regulatory compliances are concerned, each of the aforesaid entities are subjected to lots of regulatory compliances in India.
Therefore, it is advisable to take assistance of professionals like chartered accountants, company secretaries and lawyers in India in order to have smooth and hassle free experience while opting for foreign company registration in India.
