Formation of a foreign subsidiary company is very important.If the half or more than a half of the equity shares of a company are owned by a company that is mainly operated in another foreign country, then the depended company can be mentioned as a foreign
subsidiary company. The foreign company which acts as a parent one can be called as holding company or the
parent company.
Such subsidiary companies can be classified as:
1. Private Limited Company
2. Public Limited Company
Subsidiary as a Private Limited Company
Shaping a Private Limited Company in South India especially in Bengaluru, is the most praised and relevant
way used for building up a wholly owned subsidiary. Even the inclusion of a Private Limited Company is a bit
time taking, it is the better form suited for foreign companies to shape up their wholly owned subsidiaries.
Generally the minimum requirements needed for a foreign subsidiary companies are:-
two Shareholders (all can be foreign nationals)
two Directors ( minimum one should be an Indian resident)
Documents preferred:
ID Proof & Address Proof
Indian National – Aadhar Card, Driving License, Voter ID etc
Foreign National – Address Proof and ID proof to be attested by the Indian Consulate. If it is not in
English, Translation is needed.
PAN Card of the Indian Director
Board of Director Resolution from the Foreign Company
Procedures of inclusion
Apply for Name Approval
Obtain Digital Signature
Apply for DIN Number
Submission of MOA & AOA
Certification of Incorporation
Post Registration
Obtain a PAN Card
Issue Share Certificate
Filing of FCGPR
Another various procedural registrations needed after the lawful establishment of a subsidiary company based
on business
1. GST Registration
2. Registration under Karnataka Shops and Establishment Act
3. Profession Tax Registration
4. MSME/ Udyog Aadhaar Registration
5. Employee Provident Fund Registration (PF Registration)
6. Employee State Insurance Registration (ESI Registration)
7. STPI Registration or Non-STPI Registration
8. Import Export Code (IEC)
9. Trade License from BBMP
A foreign company can also switch on its operations in Bengaluru by ways of shaping up:
Liaison Office
Branch Office
Project Office.
Liaison Office
A Liaison office is simply an office of Representation in purpose to look upon and understand the
business and the climate of investment in the country or a city.
A Liaison office cannot uphold any commercial / trading / industrial operation directly or indirectly in
any manner. A Liaison office have to stabilize itself out of the incoming remittances obtained from parent
company through normal banking channels. It can be functioned only with the approval of the Reserve Bank
of India.
Branch Office
Branch office of a foreign entity can be set up in India only with the approval permission of the
Reserve Bank of India. A Branch office can generate revenue from the Indian operations allowed by the
Reserve Bank of India.
The Branch Offices can represent their holding companies and functioned under the following process :
Export/Import of goods including Professional Consultancy Services.
Take up operational research of the parent company.
Being in a role as Buying / Selling medium of the parent company.
Provide technical support to the products rendered by the parent company.
Offer services in the field of development of software and IT.
Aid technical or financial alliances between the parent company and other National companies.
Project Office
The Reserve Bank has allowed general permission to foreign companies to form Project Offices in India,
provided they have secured a contract from a National company to run a project in India in these ways:-
If the project is capitalized directly by in-going settlement from abroad.
If the project is financially supported by a bi or multilateral International Capitalizing Agency.
If the project has been absolved by a concerned authority.
If a company in India giving the contract that has been granted term loan by a Public Financial
Institution or a National bank for the purpose of the project
we hope you got some idea about Formation of a foreign subsidiary company, Thank you
