Q. What is the Indian Subsidiary Company?

Ans. The subsidiary Company is the company who is owned by any another company. It can either be owned in full or owned in part by another company by investing in shares of that company. It should be noted that the company that owns the subsidiary is known as a parent company or a holding company. A company incorporated outside India can also be a parent company of Indian subsidiary and can invest in India easily.

Q. Whether a company incorporated outside India be a 100% subsidiary of the Indian company?

Ans. Yes. There is a minimum requirement of at least two share holders; hence, foreign companies may hold 99.99% of shares of an Indian subsidiary. Besides, minority balance can be given in the name of an individual. A foreign company can invest in India as per the FDI policy of Indian Govt.

Q. What is the various entry routes in India for Foreign Direct Investment (FDI)?

Ans. India, today is a part of top 100th club on Ease of Doing Business (EoDB) and globally ranks 1st in the greenfield FDI ranking. (source Invest India). Two Main routes are there as follow:

1. Automatic Route: Under the automatic route, the non-resident investor or the indian company does not require any approval from Govt. of India for the investment. Some of the examples of the sectors are Agriculture, Air Transport, Airport, Auto componants, Automobiles,Broadcasting etc.
2. Government Route: Under the Government route, prior to investment, approval from the government of India is required. Proposals for FDI under Govt. route, will be considered by respective administrative ministry/department. Some of the examples of the sectors are Banking, Core Investment, Digital Media, Food Products retails etc.

Investments in some of the sectors are allowed only up to a limit under automatic route if you want to invest above the specified limit then permission from Indian Government have to be taken in advance.

Q. Whether a foreign company form a One Person Company (OPC) as its subsidiary?

Ans. No, A foreign company cannot invest in OPC, Partnership or Proprietorship Firm. However, investment can be made in LLP subject to necessory approvals.

Q. What are main requirements to form a Indian Subsidiary company in India by a foreign company?

Ans. Following are the main requirements to form a Indian Subsidiary company in India:

• Minimum 2 Shareholders (can be individual or company)
• Minimum 2 directors, one should a Indian resident (In India for 182 days or more)
• Digital Signatures of Directors & Shareholders
• Parent company must hold at least 50% of total equity capital
• Necessory documents from company registered outside India like Registration Certificate, Nominee appointment letter
• FDI Route check- Automatic or Other than automatic route
• Indian registered office proof (Company registration address)

Q. What are the annual Compliances of Indian Subsidiary Company?

Ans. Annual Compliances of Indian Subsidiary Company is same as any other company along with other compliance like FEMA guidelines, transfer pricing guidelines, Reporting to RBI & SEBI for FDI in India etc.

Complainces for a private company can be as get done Statutory Audit every year from a practicing CA and get file annual filing forms namely MGT-7 (annual return) & AOC-4 (financial statement) with ROC and Income tax return (ITR-6) to be filed with income tax department annually. Other applicable ROC forms can be ADT-1, DPT-3, DIR-3 KYC, Form 22A etc. Forms are compulsory to file with ROC/IT Department whether you have any business or not in any year.

Q. What is the Income Tax Rate to Indian Subsidiary private company in India?

Ans. Final profit of company generally get taxable @ 25% (surcharge extra) if company's turnover is upto Rs. 250 Crores or else 30%. New relaxed rate of 22% has been introduced by Section 115BAA with effect from FY 19-20 by not availing the certain exemptions under income tax act. Rate is significatly lower than a foreign company i.e. taxable at 40% in India.

Q. Whether a foreign company or foreign national own or start a business in India?

Ans. Yes, any foreign entity or foreigner outside India (Other than from Pakistan & Bangladesh) can easily invest in India by subscribing shares of a Indian company. Investment will be subject to FDI policy of India that can be through automatic route or by prior approval of Indian government.

Q. What are the various sectors in which 100% FDI is allowed in India by automatic route?

Ans. These are the some sectors in which 100% FDI is allowed by Indian Govt. (some of the sectors have investment conditions, need to check as per FDI policy):

• Agriculture & Animal Husbandry
• Air Transport Service (Non-Schedule & Other services)
• Airports (Greenfield & Brownfield)
• Asset Reconstruction Companies
• Autocomponants
• Automobiles
• Biotechnology (Greenfield)
• Broadcast Content Services
• Broadcast Carriage Services
• Capital Goods
• Cash & Carry wholesale stores
• Chemicals
• Construction (Township, Housing, Builtup Infra, Hospitals)
• Credit Information Companies
• Other sectors includes E-commerce activities, Electronic System, Food Processing, Gems & Jewellery (Manufac.), Leather, Manufacturing, Petroleum & Natural Gas etc.

Q. What are the various sectors in which FDI is allowed in India by Government approval route?

Ans. These are the some sectors in which limited FDI is allowed by Indian Govt. prior approval (some of the sectors have investment conditions, need to check as per FDI policy):

• Banking- Public Sector (20%)
• Broadcasting Content services (49%)
• Core Investment Company (100%)
• Digital Media (Up to 26%)
• Food products retail trading (100%)
• Mining and mineral seperation of titanium bearing minerals (100%)
• Multi brand retail trading (51%)
• Print Media- Scientific and technical/ Specialty journals (100%)
• Print Media- Newspaper/Periodicals (26%)
• Satellites (100%)

Q. What are businesses in which foreign nationals or companies cannot invest?

Ans. Foreign investments in India are prohibited for the following business:

• A business of chit fund.
• Nidhi Company
• Agricultural or plantation activities excluding floriculture, horticulture, development of seeds, animal husbandry, pisciculture, cultivation of vegetables, mushrooms etc.
• Real Estate business or construction of farm houses (not includes development of townships, construction of residential/commercial premises, roads or bridges.)
• Trading in Transferable Development Rights (TDRs).

Q. Whether a foreign company can choose same name in India as having outside India?

Ans. Yes, a foreign company can choose the name as identical to name outside India, main points are below:

• Foreign Company can use some main words of its name to decide the name of Company in India to enjoy the goodwill of its name in foreign Country.
• Foreign Company can apply the same name (name in foreign country) in India by using word “India” in its name.
• If foreign Company having any registered Trade Mark then it can use such trademark for Incorporation of Company in India. OR Company can choose any other different name.

(Documents may be called from foreign company to use similer/identical name in India.)

Q. Whether a Foreign National have to be present in person to register a company in India?

Ans. No, the whole process is online and can be processed by providing marely scanned documents. Presence of officer in India is not required. Filingdigits is equiped with latest technology to help you to register a company in India easily.

Q. What are the RBI Compliances has to follow for Indian Subsidiary?

Ans. Indian subsidiary need to file or report the following to Reserve Bank of India:

• File Form ARF for receiving funds from foreign.
• File Form FC-GPR to the RBI with certificate of professionals after issuing Shares for received funds.
• Submit Annual return on Foreign Liabilities and Assets to RBI (annual complaince)

Everything will be taken care of by filingdigits easily and includes in our registration package too.

Q. Whether filingdigits can help us to get arrange/complete some Indian legal requirements easily?

Ans. Yes, filingdigits can definitely assist you to complete requirement related to registered office of Indian company, Indian resident director or any other assistance which may be required during the incorporation process in India.