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Setting Up an Indian Subsidiary Company

There is a lot of interest among foreign companies to start their operations in India and tap into one of the largest and fast growing market, and have access to some of the best human resources in the world.

A Foreign National or an entity incorporated outside India can invest and own a Company in India by acquiring shares of the company, subject to the FDI Policy of India.

In addition, a minimum of one Indian Director who is a Indian Director and Indian Resident is required for incorporation of an Indian Company along with an address in India.

When an Entity which is incorporated outside India (i.e Foreign Country), makes 100% Foreign Direct Investment (FDI) as per Indian FDI policy, the Indian company incorporated for this purpose is said to be wholly owned subsidiary of that foreign entity. Under the current foreign investment policy, a wholly owned subsidiary can be established either under the automatic route, if the conditions specified therein are complied with (specific high priority industries) or obtain an approval from the FIPB.

This is the easy and best method for setup a foreign based Company in India, where entire hold on share capital of a Indian company is hold by Foreign Based Entity.

Minimum Requirment for Wholly Owned Indian Subsidiary

Private Limited : Private Limited Company has following characteristics:

  • Minimum paid up capital is Rs. 1,00,000.

  • Minimum 2 Director and 2 shareholder, One will be Indian Resident Director.

  • Shareholder's right to transfer shares is restricted

  • The number of shareholders is limited to 200; and an invitation to the public to subscribe to any shares or debentures is prohibited.

Public Limited : Public Limited Company has following characteristics:

  • It must have at least seven shareholders.

  • Minimum paid up capital must be Rs. 5,00,000

  • It must publish a prospectus or file a statement in lieu of a prospectus before it can start transacting business.

  • A public company is required to have at least three directors.

Documents Required for Wholly Owned Indian Subsidiary

  • 3 Passport Size photograph.

  • Address proof (Driving License, Voter ID, Passport, Aadhar Card).

  • Proof of Registered office in India-Electricity Bill, Leased deed or Rent Agreement.

  • PAN CARD (Not mandatory in case of Foreign Director).

  • Passport (Mandatory for Foreign Director, Must be in English Language and duly apostle).

  • If the proposed director is in foreign country then all the documents must be duly apostle by the home country & if director is presently in India then such apostle is not required.

  • Any one of following (Bank Passbook, Credit Card Statement, Telephone Bill, Electricity Bill).



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