Foreign Subsidiary

A Foreign Subsidiary is a company in a form of private limited company that has non-resident body corporate shareholder holding more than 50% of the paid up capital of such company.

1. Director:

• Minimum no. of directors required are 2 out of which 1 shall be Indian Resident.
• Any person can be a director of the company including family members
• Director Identification No. (DIN) and Digital Signature Certificate (DSC) are required to be a director of the company
• Directors are the managers and they are responsible for day to day functioning of the company.

2. Shareholder:

• Minimum no of shareholders required are 2.
• Director and Shareholders can be the same.
• Shareholders are the owners of the company.

3. Capital:

• There are 2 types of capital i.e. Authorize Capital (It is the capital up to which company is authorize to raise from the member and it can be increase as and when required.), Paid Up Capital (It is the capital which is paid up by the members of the company and it can be increase as and when required.)
• There is no such requirement for minimum capital, hence the company can be formed with the capital starting from INR 1.

4. Registered Office:

• Any place can be made as the registered office of the company even the residential place can be used as the registered office of the company.

5. Registering Authority

• Ministry of Corporate Affairs.

6. Required Documents

> MOA, AOA & COI of foreign holding Company, attested by director of that company duly translated in English, if not in English language & Certified by Indian Consulate

> If the documents are signed outside India, then the same have to be notarized by a Public notary of the residence country and consularized or apostilled by the competent authority, as the case may be.

> If the documents are signed in India, then copy of Visa and stamped passport, proving his/her presence in India at the time of signing is required.

> Proof of Registered office address (Conveyance/ Lease deed/Rent Agreement/Maintenance Bill)

> Copy of the utility bills of the registered office (Electricity Bill/Telephone Bill not older than two months).

 Directors / Shareholders

> PAN Mandatory- Indian National / Passport – Foreign National

> Proof of Identity – Voter Id/Passport/Driving License

> Proof of Address (Electricity Bill/Bank Statement/Telephone Bill/Mobile Bill not older than 2 months)

*All documents for Indian National – To be self-attested

*All documents of Foreign National – To be self-attested & apostilled

Note:

Foreign Subsidiary also need to comply with the Foreign Exchange Management Act, 1999 rules and regulation before making an investment/incorporation in/of subsidiary company in India

All requirements remains same as incorporation of Private Limited Company, except one shareholder who shall be Body Corporate & NR and hold more than 51% of paid up capital of such company.

1. Obtain Digital Signature Certificate (DSC)
2. Prepare SPICe+ form (Part A – Name availability and reservation request)
3. Prepare SPICe+ Part B form (Company information i.e. directors, capital etc.)
4. Prepare e-form SPICe+ MOA (INC-33) ,SPICe+ AOA (INC-34) and SPICe+ AGILE-PRO (INC-35)
5. Download all the e-forms prepare online and affix DSC on all the e-forms.
6. Attached the require documents with form SPICe+ and upload the e-forms to MCA portal.
7. Verification of documents / forms by RoC
8. Issue of Certificate of Incorporation by RoC

Advantages

1.PROVIDES VISION AND GUIDANCE
2.PARENT COMPANY CAN SHARE ITS RESOURCES
3.ACCESS TO A NEW MARKET

Disadvantages

 1.SUBSIDIARY CAN BE EXPENSIVE
2.CULTURAL AND POLITICAL CHALLENGES IN HOST COUNTRY