Overview of Foreign Company Registration
A Foreign Company in India is defined as any company or body corporate incorporated outside India which has a place of business in India (physical or electronic) and conducts business activity in India.
Foreign companies are assigned a Foreign Company Registration Number (FCRN) by the Registrar of Companies (RoC). Entering the Indian market requires careful planning regarding the entry route and business structure to ensure compliance with the Companies Act, 2013, and FEMA regulations.
Why Invest in India?
- Vibrant Economy: One of the fastest-growing major economies with a massive consumer base.
- Demographic Dividend: A young, skilled, and cost-effective workforce, especially in IT and manufacturing.
- Strategic Location: Gateway to South East Asia and the Middle East.
- Government Support: Initiatives like "Make in India" and PLI schemes offer incentives for foreign investors.
- FDI Policy: 100% FDI is allowed under the automatic route in many sectors.
Entry Options for Foreign Companies
Wholly Owned Subsidiary (WOS)
A private limited company where 100% of shares are held by the foreign parent company. Best for long-term operations and full control.
Joint Venture (JV)
Partnership with a local Indian company. Ideal for leveraging local market knowledge and distribution networks.
Liaison Office (LO)
Can only undertake liaison activities (communication) between parent and Indian entities. Cannot earn income in India.
Branch Office (BO)
Can undertake commercial activities like export/import, consultancy, etc. Requires RBI approval.
Project Office (PO)
Set up to execute specific projects in India. Valid only for the tenure of the project.
Registration Process (Wholly Owned Subsidiary)
- Digital Signature (DSC): Obtain DSC for all directors.
- Director Identification Number (DIN): Apply for DIN for all directors.
- Name Reservation: Reserve the company name via the RUN service on the MCA portal.
- Incorporation Filing: File the SPICe+ form along with MoA and AoA.
- Certificate of Incorporation: Receive the COI, PAN, and TAN from the RoC.
- Bank Account & FDI Reporting: Open a bank account, bring in capital, and file Form FC-GPR with RBI.
Documents Required
Note: All documents executed outside India must be notarized and apostilled (or consularized).
- For Parent Company: Certificate of Incorporation, MoA, AoA, Board Resolution.
- For Foreign Directors: Passport (Identity Proof), Address Proof (Bank Statement/Utility Bill), Passport-sized photos.
- For Indian Director: PAN Card, Aadhaar Card/Voter ID, Address Proof.
- Registered Office: Rent Agreement, NOC from owner, Utility Bill.
Key Compliance Requirements
- Annual Filing: File Form AOC-4 (Financials) and MGT-7 (Annual Return) with RoC.
- FEMA Compliance: File Annual Return on Foreign Liabilities and Assets (FLA Return) with RBI by July 15th.
- Taxation: File Income Tax Returns (ITR-6) and comply with Transfer Pricing regulations (Form 3CEB).
- Statutory Audit: Mandatory audit of accounts by a Chartered Accountant.
Estimated Costs
| Component | Estimated Cost (INR) |
|---|---|
| Government Fees (Name, DIN, Incorporation) | ₹10,000 - ₹20,000 |
| Professional Fees (Incorporation) | ₹20,000 - ₹40,000 |
| DSC (Per Director) | ₹1,500 - ₹2,500 |
| Stamp Duty | State-specific (varies by capital) |
