Registration of a foreign company in India refers to the process by which a foreign company establishes a subsidiary or branch office in India. The technical term is incorporation of a foreign company in India.
The process typically involves obtaining various approvals and licences from the Indian government, as well as compliance with regulations related to foreign investment.
The history of incorporation of foreign companies in India began during the colonial era when British companies established operations in India.
The Indian Companies Act of 1866 provided for registration and regulation of companies, but regulations for foreign companies were minimal.
In the 1980s, the government began to liberalise its economic policies to encourage foreign investment, and the Foreign Exchange Management Act (FEMA) of 1999 replaced FERA and liberalised rules for foreign investment.
The Companies (Amendment) Act of 2000 simplified the process for incorporating foreign companies in India and the Companies Act of 2013 updated regulations and introduced new compliance requirements.
The Indian government continues to make efforts to attract foreign investment by simplifying the incorporation process and reducing compliance burden.
The main motive behind incorporating foreign companies in India is to take advantage of the-
Foreign companies can benefit from India’s low labour costs, government incentives, and free trade agreements, which can help to improve margins and boost sales.
Incorporation in India also allows access to growing markets, new customers and suppliers, and a skilled workforce in sectors such as
An Indian company refers to a business entity that is
A foreign company refers to a business entity that is
It may also be referred to as a multinational company or a multinational corporation (MNC).
Foreign companies may face additional regulations and restrictions in India compared to Indian companies.
There are several different types of entities that foreign companies can incorporate in India, depending on the nature of their business activities and the level of control they wish to retain over the Indian operations. These include:
However, the branch office is required to obtain specific approvals from the Reserve Bank of India (RBI) before it can start its operations.
It is required to obtain specific approvals from the Reserve Bank of India (RBI) before it can start its operations.
Wholly Owned Subsidiary companies can undertake any lawful business activity and have the same rights and liabilities as any other Indian company.
The incorporation process and documentation for a foreign company in India can vary depending on the type of entity being incorporated and the nature of its business activities.
Generally, the process involves the following steps:
Once a foreign company has been incorporated in India, it will be subject to various compliance and ongoing requirements to maintain its legal status and operations in the country. These may include:
It is difficult to determine the exact number of foreign companies operating in India, as the number is constantly changing and may include subsidiaries, branches, joint ventures, and other forms of business presence.
However, as of 2021, there were thousands of foreign companies operating in various sectors in India, including information technology, automotive, pharmaceuticals, consumer goods, and more.
Overall, Incorporating a foreign company in India can provide a range of benefits, including access to a large market, a skilled workforce, and a strategic location.
It is important to follow the proper procedures and comply with the relevant laws and regulations.
At JPARKS INDIA, we provide end to end solutions to not only help you register a foreign company in India, but also procure all relevant licences and certifications based on your requirements.