Checklist for Incorporation of Foreign Subsidiary in India

Checklist for Incorporation of Foreign Subsidiary in India

Incorporation of Foreign Subsidiary

Part B of the SPICe+ form deals with the incorporation of the company. On choosing to proceed after completion of Part A then only incorporation proceedings will start. SPICe+ form contains various columns which are required to be filled properly for the incorporation of the company.
  • Registration of Company
The applicant has to fill details and attach relevant documents of the company in an electronic form and apply the same through SPICE+ forms only. It includes various details such as the address of the registered office, the capital structure of the company.
  • Allotment of Director Identification Number (DIN)
DIN is a unique 8 digit identification number allotted to an individual who desires to become a director of a company. Any person who intends to become the Director of a new company is required to apply and fill SPICe+ form. Only the person who has DIN can act as a director of the company. 
  • Issuing of PAN Card
Permanent Account Number (PAN) is a unique ten-digit number which is issued by the Department of Income Tax. It is mandatory to apply for a PAN Card at the time of incorporation of the Company.
  • Issuance of TAN
Tax Deduction and Collection Account Number (TAN) is a unique ten-digit number which is issued by the Department of Income Tax.

Documents required for SPICe+

  • Memorandum of Association which is duly apostilled or notarized in a foreign nation;
  • Articles of Association  which is duly apostilled or notarized in a foreign nation;
  • Declaration by the first Director(s) and Subscriber(s) which duly apostilled or notarized in a foreign nation;
  • Digital Signature with only one subscriber;
  • NOC from the owner of the company;
  • DIR-2 declaration from directors along with proof of Identity;
  • Proof of office address;
  • Copy of utility bills which should not be older than two months;
  • A resolution passed by the promoter company;
  • Copy of body resolution of incorporation of foreign body and resolution of passed by the foreign company;
  • Proof of identity and residential address of subscribers;
  • Proof of identity and residential address of nominees.

Agile-Pro

Pursuant to section 38A of Companies (Incorporation) Rules, AGILE-PRO is required to be filed for application of registration of Goods and Services (GSTIN), Employee State Insurance Corporation (ESIC) registration, Employees Provident Fund Organisation (EPFO), Profession Tax Registration and Opening of Bank Account. It is mandatory to fill the AGILE-Pro form along with SPICe+ Form for the incorporation of a new company.
  • Issuance of EPFO registration
Employees Provident Fund Registration (EPFO) is compulsory for every organization which has more than 20 employees. EPF is a benefit which is provided to the employee by the organization at the time of retirement. EPF is governed by the Employees Provident Funds & Miscellaneous Provisions Act, 1952. SPICe+ form has made it mandatory for EPFO registration along with the incorporation of the company. 
  • Issuance of ESIC registration
Employee State Insurance Corporation (ESIC) is an autonomous body under the Ministry of Labour and Employment. This scheme provides medical and monetary benefit to employees by the employer. ESI is governed by the Employees’ State Insurance Act,1948. SPICe+ form has made it mandatory for the applicant to register at ESIC at the time of incorporation itself. 
  • Opening of Bank account for the Company
Companies are required to create a bank account at the time of incorporation itself. Only ICICI and Punjab National Bank have been integrated with AGILE-Pro.
  • Profession Tax registration (only for Maharashtra) 
Professional tax registry is compulsory for the companies which are registered in the state of Maharashtra.

Documents required for Agile-Pro

  • Proof of Principal place of business.
  • Proof of appointment of authorized signatory for GSTIN.
  • Proof of identity of authorized signatory for opening a bank account.
  • Proof of address of authorized signatory for opening a bank account.
  • Specimen signature of authorized signatory of EPFO.

Fill Details in INC-9

INC-9 is a declaration which is given by the director which is filed along with SPICe+ Form at the time of incorporation. An affidavit of the director is also filed along with INC-9.

Uploading Forms and Certificate of Incorporation

All the forms should be downloaded in PDF Format and DSC should be affixed. Once DSC is affixed then all the forms should be uploaded on the MCA website. Once the forms are uploaded it will be scrutinized by MCA. After scrutiny certificate of incorporation will be given. The certificate of Incorporation shall be issued by the Registrar in Form INC 11. 

Conclusion

India is considered as a lucrative market for doing business and many foreign companies want to establish themselves in India as it has a promising future. India offers a favourable business environment at the same time it is also important to understand the regulatory and procedural framework before incorporating a foreign subsidiary in India. Ease of doing business initiative has significantly eased the process of incorporation of a foreign company. A foreign company can set up its wholly-owned subsidiary in India if it follows the procedure mentioned in the article.



Created & Posted by Aashima
Accountant at TAXAJ



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