Functions & Features of Wholly Owned Subsidiary in India.
Functions & Features of Wholly Owned Subsidiary in India, Minimum criteria Pre-Conditions of 100% Wholly Owned subsidiary, Incorporate Wholly Owned Subsidiary in India,Read More
In today's world it is considerably easier to setup or start a company in India. Now a days it needs lesser time frame to start your business in India compared to yester years. It takes only less that 5 weeks to register a company in any part of India. With the digitalization of company registration process the time consumed for company registration have come down dramatically.
Before anyone is planning to start a business in India the business owner must decide up on which type of business it should be. In general there are two types of business entities like private limited companies and public limited companies. Other than these common business entities there are other types which are based on the particular needs of the business owners.
Our team of experts can provide all the assistance in starting a business in India. With the experience we gained from several years with hundreds of clients who have started their successful business ventures in all parts of India, we can assure you the best services at the most competitive rates. Our business consulting services spans from the starting of a company or business till that business becomes a successful enterprise in India.
Legal and various types of document works are involved in starting a business in India other than approvals from Government of India. We can assist you in registering your company in India along with getting vital documents and approvals from the government
A liaison office is the most basic form of business presence that a foreign company can have in India. Permission to open a liaison office in India is granted by RBI, the apex exchange control authority. Liaison offices are normally established by foreign companies to promote their business interests by spreading awareness of their product(s) and exploring opportunities for business and investment in India. Foreign insurance companies have a general permission to establish a liaison office in India provided they have obtained permission from the Insurance Regulatory Development Authority of India and they comply with certain prescribed conditions.
Under the current exchange control regulations, a liaison office is permitted to:
Typically, a liaison office is not permitted to :
An application in the prescribed form has to be submitted to RBI for establishing a liaison office in India. The lead time for processing a liaison office approval typically ranges from three to four weeks, unless the application is referred to the administrative ministry concerned within the Government of India for its comments, which may lead to an increase in the processing time.
As stated above, a liaison office cannot earn any income in India (except for interest on surplus funds lying in its local bank account subject to certain conditions). Therefore, all expenses of the liaison office have to be met out of inward remittances from the head office. Any balance in the liaison office account can typically be repatriated, only at the time of closure of the liaison office.
As stated above, liaison offices are not permitted to carry on any industrial, trading or commercial activities, nor to earn any income in India. However, sec 139(1) requires all companies to furnish a return of income. Hence, liaison offices would also be required to file their return of income in India.
Closure of a liaison office normally involves a time frame of five to six weeks. An application enclosing the prescribed documentation is required to be made to the requisite regional office of RBI.
In case a foreign company wishes to establish a business presence in India for the limited purpose of executing a project, it may establish a project office for its Indian operations. The objective behind establishment of a project office is to enable a foreign company to establish a temporary base in India for executing specific projects/contracts.
A foreign company may open a project office in India for executing a contract secured by an Indian company without the prior permission of RBI provided the following conditions are satisfied:
In all other cases, prior approval of the RBI is required to establish a project office in India.
A project office is permitted to open and operate a bank account including a foreign currency account in India. Typically, expenses of the project office in India can be met only out of inward remittances from the head office, or rupee amounts received locally under the approved contract(s).
Outward remittances from the bank account are permitted subject to certain compliance requirements.
A project office is considered as an extension of a foreign company in India. Therefore, income earned by the project office is taxable in India in accordance with the taxation provisions applicable to foreign companies under the Income-tax Act, 1961 ("Act").
Being a restricted business presence in India, the process for closure of a project office is straightforward, and normally involves a time frame of five to six weeks. An application enclosing the prescribed documentation has to be made to the regional office of RBI in case the project office was established under the approval route and to the Authorized Dealer in case the project office was established under the general permission.
In the case where a foreign company wishes to undertake trading or commercial activities in India without establishing/investing into an Indian company, it may establish a branch office in India, with the prior approval of RBI, for undertaking certain specified activities.
Scope of activities
Branch offices are permitted to undertake only those activities, as approved by RBI, that typically enable them to:
100% FDI is allowed in setting up a stand -alone branch in a SEZ. A branch has to be set up on a stand-alone basis, i.e. such branch office will be isolated and restricted to the SEZ alone and no business activity/transaction will be allowed outside the SEZ (this includes branches/subsidiaries of its parent office in India).
An application in the prescribed form has to be submitted to RBI for establishing a branch office in India. The lead time for processing a branch office approval typically ranges from four to five weeks, unless the application is referred to the administrative ministry concerned (such as in the case of banking entities) within the Government of India for comments which may lead to an increase in processing time.
As per the provisions of the SEZ Act, no prior approval of RBI is required to set up a branch in a SEZ.
The RBI approval for establishing a branch office permits the opening of a bank account for meeting expenses related to Indian activities, as well as crediting proceeds/income generated in India. Branches are permitted to repatriate profits generated in India on an ongoing basis, after complying with certain procedural requirements.
A branch office is considered as an extension of a foreign company in India. Therefore, income earned by the branch office is taxed in India in accordance with the taxation provisions applicable to foreign companies under the Act.
In case the provisions of a tax treaty between India and the country of which the foreign company is resident, are more beneficial than the Act, then it is open to the foreign company to elect being taxed under the provisions of the relevant tax treaty.
Closure of a branch office normally involves a time frame of six to eight weeks. An application enclosing the prescribed documentation has to be made to the Central office of RBI.
Apart from obtaining RBI approval for establishing a liaison office, project office/branch office, the foreign company is also required to register with the Registrar of Companies ("ROC"). An application has to be filed in the prescribed form within 30 days of the establishment of the office in India with ROC, pursuant to which ROC would issue a certificate of establishment of place of business in India to the foreign company.
ENTRY REQUIREMENTS FOR DOING BUSINESS IN INDIA
Public Limited Company
A company that can offer shares to the public is termed as a public limited company. The Companies Act 1956 mandates a list of criteria that have to be met by the public limited companies before they start their business operations in India. A few of these criteria are listed below:
Private Limited Company
A private limited company is not owned by any governmental body, and it does not offer public shares. The number of shareholders for a private limited company is restricted to a maximum 50, whereas the minimum required is 2. The shareholders, however, do not have the power to transfer or trade their shares publicly.
TYPE OF BUSINESS ENTITIES FOR STARTING BUSINESS IN INDIA
This is the most common type of business entity. Sole proprietorship means that there is a sole owner who funds as well as operates the business. Being one of the simplest forms of business entities, it is relatively formality free with no rules regarding records required to be kept, no requirement of having your accounts audited and no requirement of filing financial information to the registrar of companies. In short, there is no legal distinction between you and your business.
Partnership is a type of business entity, where you are partner with other individuals to own and run the business. On a higher level, they can be viewed as collection of sole proprietors. In case of partnership form of entity, you get access to a bigger pool of capital, skills and other resources to fund and run your business. All partners contribute capital equally, share profits and losses equally and have an equal say in business decisions, unless otherwise provided in the partnership deed.
Limited Liability Partnership
The LLP shall be a body corporate and a legal entity separate from its partners. Any two or more persons, associated for carrying on a lawful business with a view to profit may by subscribing their names to an incorporation document and filing the same with the Registrar, form a Limited Liability Partnership.
This type of business entity is most common and preferred type while starting a business. A corporate entity is a separate legal entity from its founders, shareholders and managers. The liability of the shareholders is limited to the paid-unpaid capital that is issued as part of the company. Thus, in case of bankruptcy, the personal assets of the founders/managers are not affected. A corporate entity needs to keep record of accounts, audit their records and file an annual report and return with the registrar of companies.
Corporate entities are of the following two types:
1) Private Limited Company
A private company is a company which has the following characteristics:
2) Public Limited Company
A public company is defined as a company which is not a private company. The following conditions apply only to a public company:
There are several other provisions contained in the Companies Act, 1956 which are applicable only to public companies and should be consulted.
Foreign companies engaged in manufacturing and trading activities abroad are allowed to set up branch offices in India for the purpose of export/import of goods, rendering professional or consultancy services, R&D, promoting technical or financial collaborations, representing the parent company, acting as buying/selling agents, rendering services in IT and development of software, rendering technical support to the products supplied by the parent/group companies. Branch offices could be established with the approval of the government of India and may remit outside India profit of the branch, subject to RBI guidelines after payment of applicable Indian taxes.
LIAISON OFFICE / REPRESENTATIVE OFFICE
A Liaison Office could be established with the approval of the government of India. The roles of the Liaison Office are limited to collection of information, promotion of exports/imports and facilitate technical/financial collaborations. Liaison office cannot undertake any commercial activity directly or indirectly.
Foreign companies planning to execute specific projects in India can set up a temporary project/site office in India for carrying out activities only relating to that project. The Government of India has now granted general permission to foreign entities to establish project offices subject to specified conditions.
REGISTRATION OF COMPANIES
The following services are provided by us in this regard:
SETTING UP BUSINESS IN INDIA BY FOREIGN COMPANIES
Two choices are there for a foreign company seeking to develop business activities in India:
1. As an Indian company:
2. As an Foreign company:
Once the entity is set-up in India:
We provide complete, online back office operations. From recruitment of personnel, to general office maintenance, to pay roll and other legal & statutory formalities.
Bank account opening
Assistance and signatory services for opening and operating Bank account in India with all major international banks are also provided. Tell us the preference of Bank you want to have bank account with and we will get back to you with complete information.
India limited companies are required by law to place on public record their statutory annual accounts, which must often be audited. These must comply with a range of detailed disclosure requirements set out in the Indian Companies Act. Rajput Jain & Associates., Chartered Accountants ensure that all disclosure requirements are met, and are authorised to carry out independent statutory audits. Our audit strategy concentrates attention where it is most appropriate, reducing expenses to a minimal while delivering a valuable monitoring resource. Our advice isn’t just an annual event – clients rely on our experience all year round. As your profits grow, we advise on corporate tax planning and compliance, and will negotiate with the Inland Revenue on your behalf. For more about our Legal & Tax compliance service click here. Whenever cross border intra group transactions arise, the difficult issue of transfer pricing is never far behind. We can help you to determine fair prices and ensure that the documentation required by the tax authorities is in place. Tax and tax preparation for company owners and key workers is just as important to us–our professional tax, strategic strategy and trust divisions seek to optimize the tax development and reduce tax bills. Their managers can carry out credit checks on prospective clients, provide customs and shipping documents and organize for all necessary policies. When you build a footprint in India, we will follow up on our initial business plan with daily marketing updates.
Our service list enables you to select and pick to match your specific needs. Our outsourcing technology helps you to cost-effectively execute on India's fiscal compliance. We're taking care of the periphery problems that give the company unable to concentrate on what's really important: progress in India.
Want to start business in India?
Rajput Jain and Associates is a committed agency with the express purpose of supporting foreign and national business groups to develop their corporations in India. actively promoted by a successful entrepreneur of the first generation, the company recognizes the concerns relating to the development of an organisation in the Indian climate and ensures that you get complete assistance. We totally understand Indian politics, industry, corporate needs profoundly and have the right collaborators, partnerships to lead you through the smooth establishment of your company. Your quest for improved value-added insight and acquired tips for beginning business / trading in India finishes here.
Is your liaison / office situated in "India" or "Branch Office in India"
The organization extends its market by establishing its branch offices in various sections of the world as well as in other nations. A branch office belongs to an institution which operates on fundamentally the same business and operation as its head office does. In other terms, branch offices are helping to broaden the reach of the demand for a company's goods by drawing additional customers; extending the scale of its marketing and production operations, as well as creating further incentives and developing unexplored channels for it. As a result, Liaison offices are helping to boost the company's development and increasing its productivity on a consistent basis. The establishment of the Branch Office / Liaison Office or Project Cum Site Office by a individual residing in India for trade, financial, industrial or other various and sundry activities shall be regulated by the following criteria;
Objects of Setting Up the Branch Office :
Note : The Reserve Bank of India, the apex bank grants permission to open a Liaison office. Thus, there is general permission to carry out any or all of the above activities once the permission from RBI is received to set up a BO in India .
The entire process, can take anywhere from a few weeks to a few months depending on the industry and India's relations with the nationality of the parent company. Approval is generally granted for a period of one to three years, upon expiry of which.
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Query Specific Consultancy, along with comprehensive written response to all the queries
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Rajput Jain and Associates is the largest online service platform in India which provides easy solutions in starting their new business at affordable cost. We aim at helping the entrepreneurs at every legal and regulatory step. We stay as your partner during entire business cycle and ensure that the business keeps prospering and remains complaint.
Rajput Jain and Associates is a network of experienced chartered accountants, lawyers, company secretaries, cost accountants, financial experts, expert bankers all over India to provide the needed services for small and medium size enterprises.
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Thank you very much for all your help in setting up my new company and clearing up all outstanding business in my sole trader accounts. For the first time in years I have peace of mind regards my business accounts. Your workforce are a credit to you, the girls at reception are so helpful and Chris has been brilliant. It is very much appreciated.
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We use Rajput Jain & Associates for all our accounting, Corporation tax, VAT and other compliance needs. The service is professional, courteous and prompt. I would recommend Rajput Jain & Associates to any company requiring a comprehensive accounting and tax service.
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