How to Register Foreign Companies in India

India is one of the fastest growing economies in the world with healthy resources and a large market base. In the past few years, there is a great boost in foreign direct investment in India (FDI) because of the changed regulatory environment in the past few years. Therefore, it is very easy for foreign nationals to start a business in India.

Sometimes people get often confused in “Indian Company” and “Foreign Company”. If a foreign national incorporates a company in India then it is an Indian Company. But when a foreign company set up a branch office in India then it is known as Foreign Company.

Foreign Direct Investment (FDI)

The amount/capital to be invested by any foreign national/NRI shall be classified as FDI in India. In 1990s, there was high number of restrictions on FDI in India where as today, there are amendments in all the rules and regulations of company formation in India.

Read More :- Company Registration in India

FDI is classified as

    Business where FDI is not allowed at all.
    Business sectors where permission is required from Foreign Investment Promotion Board(FIBP)
    Business where no permission required.

All foreign nationals/ NRI’s must go through FDI policy before company incorporation in India in order to check any restrictions, prohibition in the proposed business activity

Entry Strategy into Indian Market

A foreign company can commence operations in India by incorporating a company under the companies Act, 1956 through registration of company or establishing a branch or liaison office.

Establishing a private limited company is the easiest and fastest way to set up in India. FDI of up to 100% into a public limited or private limited is permitted under the FDI policy wherein no approval from RBI or central government is required. For the purpose of registration or incorporation, an application has to be filed with Registrar of companies (ROC). For more information please visit http://dca.nic.in.

Other entry strategy as a foreign company is to open a branch office, liaison office and Project Office. In this case, approval from RBI or central government is mandatory. Therefore, the time and money required for setting up a private limited or public limited company is much less than forming such offices.

Requirements for incorporation of company in India

In order to start a company in India, a minimum of two persons and an address are required in India. A company must have a minimum of two directors and   a minimum of two shareholders. According to Indian rules and regulations, one director must be both an Indian citizen and Indian resident.

One should establish a company with three directors which includes two foreign nationals and one local citizen. In this case, 100% of the shares of the Indian company can be held by foreign nationals/ NRI. The address in India is served as the registered office of the company.  Foreign companies establish their offices in metro cities like Delhi, Bangalore, Mumbai and Chennai etc.

Cost for company registration in India

Company formation services in India are inexpensive. The company formation process can be completed within few weeks. The incorporation process can be easy with the help of tax advisors in India. It would cost you some pennies but the whole process will be easy for you.

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Indirect Tax

What is an Indirect Tax?

An indirect tax such as Excise, Customs, Sales Tax, Service Tax, Value Added Tax (VAT), etc is a tax collected by an intermediary (such as service provider) from the person who bears the ultimate economic burden of the tax (such as the consumer/client). The intermediary later files a tax return and forwards the tax proceeds to government with the return. In this sense, the term indirect tax is contrasted with a direct tax which is collected directly by government from the persons on which it is imposed. A direct tax is one that cannot be shifted by the taxpayer to someone else, whereas an indirect tax can be.

Indirect Taxes in India is administered and collected by the Central Board of Excise and Custom (CBEC) which operates under the Ministry of Finance, Department of Revenue. Company formation services in India

What are the types of Indirect Tax applicable in India?

The various types of indirect taxes applicable in India as on date are:

Service Tax

Service tax refers to tax collected by the government of India from certain service providers for providing certain services. The person who pays service tax can be either a service provider or a service receiver or any other person who is responsible for providing certain services. Company formation Gurgaon

Value Added Tax

A value-added tax (VAT) is a type of consumption tax that is placed on a product whenever value is added at a stage of production and at final sale. VAT is most often used in the European Union. The amount of VAT that the user pays is the cost of the product, less any of the costs of materials used in the product that have already been taxed.
    For example, when a television is built by a company in Europe, the manufacturer is charged VAT on all of the supplies it purchases to produce the television. Once the television reaches the shelf, the consumer who purchases it must pay the applicable VAT. wholly owned subsidiary in Delhi

Central Excise Duty

 Central Excise duty is an indirect tax levied on those goods which are manufactured in India and are meant for home consumption. The taxable event is 'manufacture' and the liability of central excise duty arises as soon as the goods are manufactured. Foreign company registration in Delhi

Customs Duty

Customs Duty is a type of indirect tax levied on goods imported into India as well as on goods exported from India. Taxable event is import into or export from India. Import of goods means bringing into India of goods from a place outside India. Setting up a subsidiary in Delhi 

Under all the laws applicable for indirect taxes, certain registration are required to be obtained and periodical returns are required to be filed by the assesses with respect to the indirect taxes collected from third parties failing which penalties may be levied by the authorities.

Benefits of Payroll

Payroll Compliance (EPF, ESI, Retrial Benefits and TDS)

Payroll management is not just computing the salaries payable to the employees. It also involves computation of income tax deductions, handling contentious issues like supporting documents for medical reimbursements, conveyance expenses, HRA, PF/ESI, leave travel assistance etc. A lot of misunderstanding arises on account of these issues.
Every employer is required to comply with the laws applicable in relation to the employees hired in their organization. Few of compliances under such laws are outlined hereunder: Company formation services in India


Provident Fund
Provident Fund is the fund which is composed of the contributions made by the employee during the time he has worked in an organization along with an equal contribution made by his employers. It is calculated as a percentage of the employee’s salary and is returned to him on his retirement or on resignation, whichever is earlier.
In India the provident fund is administered by the Employees' Provident Fund Organization (EPFO) under the Ministry of Labor and Employment. Every establishment employing twenty or more persons is mandatorily required to maintain such fund and comply with all provisions applicable under the Act.
Certain periodical returns in respect of the provident fund contributions made are required to be filed by the employers with the prescribed authorities.Company formations Procedure in India

Employees ’ State Insurance (ESI)
Employees’ State Insurance Scheme of India (ESI Scheme) is regulated by Employees’ State Insurance Act, 1948. It is a multidimensional social security system tailored to provide socio-economic protection to worker population and their dependants covered under the scheme. Besides full medical care for self and dependants, that is admissible from day one of insurable employment, the insured persons are also entitled to a variety of cash benefits in times of physical distress such as sickness, temporary or permanent disablement etc. resulting in loss of earning capacity, etc. Also the dependants of insured persons who die in industrial accidents or because of employment injury or occupational hazard are entitled to a monthly pension called the dependants benefit.
Every employer to whom the ESI scheme is applicable is required to comply with the provisions prescribed therein. Our team can assist you by providing professional advice in relation to all such laws and assist you in complying with the procedural requirements from time to time.  New Company Registration in delhi


Gratuity
Gratuity is a lump sum payment made by the employer to the employee as a mark of recognition of the service rendered by him when he retires or leaves service after a continuous period of service of at least 5 years. Gratuity is governed under the Payment of Gratuity Act, 1972. The Act is applicable to every factory, shop or an establishment in which ten or more persons are employed, or were employed on any day of the preceding twelve months.
An employee is eligible for receiving gratuity payment only after he has completed five years of continuous service. The condition of five years is not necessary if the termination of the employment of an employee is due to death or disablement. Gratuity is payable @ 15 days wages for every year of completed service or part thereof in excess of six months. In case of seasonal establishment, gratuity is payable @ 7 days wages for each season. The maximum amount of Gratuity payable is Rs. 3.5 Lakhs.
Various obligation of the employer have been laid out under the Gratuity Act such as providing a notice of opening of establishment, payment of gratuity upon determination of services of the employee, obtaining insurance as prescribed therein, etc. Our team of trained professionals can provide you advice on various compliances required under the Act and assist you with the procedural requirements prescribed therein.

 

How to Obtaining Digital Signature Certificate

Digital Signature Certificate And Its Need?

The documents required for formation of a company are required to be filed on-line and DSC is a verification tool (equivalent to hand written signature) used for filing such documents with the ROC. DSC can be obtained for any one or more directors of the proposed company under whose name the documents are usually filed. DSC is of various classes and a Class II DSC is applicable for incorporation and for the process thereafter. Company formation services in India

How to Obtain DSC?

Government has authorized various certification agencies for issuing DSC. In order to obtain DSC, the prescribed application form of the chosen agency has to be filled in and submitted along with the identity proof and address proof. The certification agency office verifies all the documents and upon satisfaction issues DSC in a USB token (and also through email). It is a password protected file. New Company Registration in india

Documents and Information Required?

One identity proof containing photo and date of birth and one address proof is required to be submitted along with the executed form. 

Identity proof may be a Passport/Voter Card/Driving License/PAN Card etc. In case of foreign citizen/NRI, identity proof should necessarily be a passport copy.

Address proof may be a Passport/Voter Card/Ration Card/Driving License/Electricity Bill/Telephone Bill/Bank Statement etc. 

General information such as name, father’s name, date of birth, nationality, contact details, etc. is also required for filling the form. Additionally, father’s and mother’s name is required for the mandatory roll check of DSC with ROC. 

Attestation Requirement

In case of a foreign national, the photograph, identity proof and address proof should be duly attested by the notary public/Indian embassy/ apostille authority in the home country of the applicant. Company Formations  Procedure in India

Follow Up
It may take around 1-3 days to obtain a digital signature.

Note
An application for DSC can also be made simultaneously with the DIN application to save time. ++