As per the provisions of the Companies Act, 2013, a Foreign Company refers to a company or body corporate incorporated outside India but having a place of business in India, either through a physical office, electronic mode, or by conducting any business activity within Indian territory. If such a company intends to operate in India, it must comply with the applicable legal and regulatory framework.
A Foreign Company can establish its presence in India through various modes such as:
Incorporating an Indian company under the Companies Act, 2013
Setting up a Wholly Owned Subsidiary (WOS)
Entering into a Joint Venture (JV) with an Indian entity
Opening a Liaison Office, Branch Office, or Project Office
Each mode has specific compliance obligations, which are discussed below.
A foreign company establishing a place of business in India must register with the Registrar of Companies (ROC) within 30 days of setting up operations. Necessary documents such as charter documents, list of directors, and details of authorized representatives in India must be filed.
The company must appoint an authorized representative in India who will be responsible for accepting notices and ensuring regulatory compliance.
Foreign companies are required to prepare and file financial statements of their Indian business operations with the ROC in the prescribed format. These statements must comply with Indian accounting standards.
Annual return filing, maintenance of books of accounts, and audit compliance are mandatory. Returns must be filed with the ROC within the specified timelines.
In case of Liaison Office, Branch Office, or Project Office, prior approval from the Reserve Bank of India (RBI) may be required under FEMA regulations. Regular reporting to RBI is also mandatory.
The company must obtain PAN, TAN, and GST registration (if applicable). Income tax returns and other applicable tax filings must be submitted periodically.
Any change in directors, authorized representatives, business address, or constitutional documents must be reported to ROC within the prescribed time limit.
Establishing a Foreign Company in India involves multiple regulatory approvals and continuous compliance under the Companies Act, FEMA regulations, taxation laws, and other applicable statutes. Proper planning and timely filing of statutory documents are essential to avoid penalties and ensure smooth business operations in India.
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