Setting up a foreign Subsidiary in India

As India's economy continues to grow and thrive, it has become an attractive location for foreign investors looking to establish a subsidiary. Setting up a foreign subsidiary in India can be a complex process, but with the right guidance, it can be a smooth and simple . As a leading secretarial firm based in New Delhi, TriCS has extensive experience in helping foreign companies set up their subsidiaries in India. In this blog, we will provide an overview of the process involved and explain how TriCS can assist Chartered Accountants in helping their foreign clients.

Step 1: Choose the Right Business Entity

The first step in setting up a foreign subsidiary in India is to choose the right business entity. There are several types of business entities in India, including Private Limited Company, Public Limited Company, Limited Liability Partnership (LLP), Liaison Offices, Branch offices and Project offices. The entity you choose will depend on factors such as the nature of your business, the amount of capital you plan to invest, and the level of control you want to retain.

Step 2: Obtain Necessary Approvals

Once you have chosen the business entity, you need to obtain the necessary approvals from various regulatory authorities in India. This includes obtaining a Director Identification Number (DIN) and Digital Signature Certificate (DSC), registering with the Registrar of Companies (ROC), and obtaining a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN). Additionally, foreign companies are required to obtain approval from the Reserve Bank of India (RBI) for the purpose of setting up a subsidiary. These powers are now been delegated to the AD Banks.

Step 3: Drafting of Legal Documents

The next step is to draft the legal documents required for establishing the subsidiary, such as Memorandum of Association (MOA), Articles of Association (AOA), and Shareholders Agreement. These documents outline the rights and obligations of the shareholders and directors of the company, and they must be drafted in compliance with Indian laws and regulations.

Step 4: Registering with Indian Authorities

Once the legal documents are in place, you need to register your company on MCA portal and then apply for registrations under various authorities to run your business in India, including Shop and Establishment Act, applicable Trade Licenses and Labour Law Authorities, Goods and Services Tax (GST), Income Tax, Trademarks etc. TriCS can not only assist you in registering with these authorities but also ensure future compliances with these Indian authorities

Step 5: Setting up Bank Accounts and Infrastructure

The final step is to set up bank accounts and infrastructure for the subsidiary. This includes opening a bank account in the name of the subsidiary, setting up an office, hiring employees, and complying with labour laws. TriCS can assist you in setting up bank accounts and infrastructure, as well as providing ongoing support in the form of accounting and payroll services.

Most of the Consultants help in just incorporation of the Company whereas TriCS helps you even after you incorporated so that you don’t have to look around for further assistance in dealing with various other authorities. We provide Compliance Calendars with due dates so that the client is aware of the future compliances to be done before hand.

Contact us today to learn more about our services and how we can be your legal buddy in India.

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