A Foreign corporation can set
up its subsidiary company either in the form of a private limited
company or as a public limited company in India. A subsidiary
of a public corporation is also treated as a public company. The
subsidiary companies can either be wholly owned subsidiaries of
the foreign companies or it can be a joint venture with Indian
partners. Except in a few sectors where foreign direct investment
cap is applicable, the foreign company can hold 100% of the equity
of the subsidiary company. In those sectors where foreign direct
investment cap is applicable, total foreign equity holding shall
be restricted to such levels.
A company in India is required
to be incorporated under The Companies Act, 1956 and is also required
to comply with various regulations/ procedures laid down under
the Companies Act, 1956. In comparison with the branch office
and liaison office, a subsidiary company provides maximum flexibility
for conducting business in India and it can also undertake manufacturing
activities in India. The Indian operations of the company can
be funded either through equity or debt (both foreign and local)
or through internal accruals. However, the exit procedure norms
of companies are more cumbersome as compared to other forms of
business such as branch, liaison and project offices.
The subsidiary company,
incorporated under the laws of India, is treated as a domestic
company for tax purposes and accordingly domestic company tax
rates and benefits will apply. However, Indian transfer pricing
regulations shall be applicable to such companies. No approval
is required for the repatriation of dividends.
Our India Operations Team comprises of professionals who have
wide and extensive experience in structuring India entry strategy
for many corporates and in advising and assisting on various matters
in connection therewith. Our range of services includes :
Advising on / formulating
the entry strategy for India
Structuring the investment
in India in the most tax efficient manner after considering
benefits available under domestic tax laws and also the benefits
under various Tax treaties in order to ensure tax minimization
on a global basis
Advising on the possible
locations for setting up manufacturing operations to obtain
maximum tax benefits after taking into account infrastructural
and other specific special requirements
Negotiate with various
State Governments for obtainment of maximum benefit when large
foreign investment is envisaged
Guidance in respect of
various laws, rules and regulations that will have a bearing
on setting up of operations in India
Obtainment of clearance
from the Foreign Investment Promotion Board and Reserve Bank
of India, where necessary
Obtainment of Registrations
for obtainment of certain tax benefits
Total guidance & assistance
in the incorporation of the company including approval for name
of the company, drafting of Charter Documents, filing of documents
required for incorporation and obtainment of Registration from
the Registrar of Companies
Advising on the various compliance procedures
under relevant laws, rules and regulations including industry
specific legal issues
