Company registration
As per Indian law there must be 2 directors to register a corporation in India.
One share to be nominated to some one here to start out the corporate registration which will be returned.
Digital signatures certificate application sorts of all persons, 2 directors and 1 nominee got to be submitted for company registration. i will be able to be submitting my form tomorrow or the day after.
* Proposed name of the corporate with 6 preferences so as .
* Address proof of the two Directors and 1 nominee (addresses out side India got to be attested by the Indian embassy).
* Letter from the Board of directors nominating one person with company share to try to to the corporate registration in India.
* Letter of no objection, if required, from the board of directors to use an equivalent name for the Indian Company.
IF PROMOTED BY FOREIGN COMPANY
It is better (to avoid unnecessary procedures and time delay) to urge subscription money from a corporation outside India instead of getting subscription from a private outside India.
For example:
IF THE AUTHORISED CAPITAL OF THE PROPOSED COMPANY IS RS.1,00,000 DIVIDED INTO 10,000 EQUITY SHARES OF RS.10 EACH, THEN it's ADVISABLE THAT ………………… FOREIGN COMPANY .CAN SUBSCRIBE 9999 SHARES AND REMAINING 1SHARE are often SUBCRIBED BY anybody INDIVIDUAL IN INDIA AS NOMINEE OF FOREIGN COMPANY.THEREUPON 100% OWNERSHIP are going to be HELD within the NAME OF THE FOREIGN COMPANY.
For incorporating the corporate within the above manner, only the board resolution (duly notarised by notary therein state) authorizing the person holding 1 share as nominee to include the proposed company and to hold out all related matters in reference to incorporation of above company is required to finish all the formalities to include a replacement company in India.
Taxation
Foreign nationals won't be responsible for the 40% tax for foreign investors as our industry doesn't come under this taxation. we might be taxed the traditional 33.66% as per any Indian company on profit annually on net income .
Some amount of this 33.66% are often offset with company expenses.
Operations
Administrative powers to be held by the management within the Indian company to be executed only on approval from the director(s).
Financial powers to be held by the administrators .
Director’s remuneration up to any amount are often repatriated subject to the 33.66% tax.
If the foreign Company and therefore the refore the Indian company is owned by Same promoter then the billing from the Indian company to the foreign company and the funds being directed back to foreign company could be a problem with the RBI (Reserve Bank of India) and also to possess no issues with transfer pricing, it's advised to bill all outsourced projects on to the clients. Any projects handled for foreign company shall be billed directly in order that the transfer pricing are often easily established also as funds being directed back to foreign Company won't be any issue.
FEMA Aspects:
ESTABLISHMENT OF PLACE OF BUSINESS IN INDIA BY FOREIGN ENTITIES.
Approval from RBI
No person resident outside India shall, without prior approval of the RBI, establish in India a liaison office. But as long as no approval shall be necessary for banking companies if such company has obtained necessary approval under the supply of the Banking Regulation Act, 1949.
Provided that no approval shall be necessary from RBI for a corporation to determine a unit in Special Economic Zone to undertake manufacture and repair activities
A person meaning to establish a liaison office in India shall make an application to order BANK, in FORM FNC 1.
Features:
The liaison office in India shall not carry any activity aside from the activity that approval has been granted by the RBI/IRDA.
The liaison officer in India shall not enter into any business contracts in its own name without prior permission of RBI/IRDA.
No commission or fees are going to be charged or the other remuneration received by the Liaison Office in India for liaison activities or the other service rendered by it in India either directly or indirectly, unless approved by the IRDA.
The entire expenses of the Liaison Office in India are going to be met exclusively out of the fund received from the aboard through normal banking channels.
The Liaison Office in India shall not borrow or lend any money from/ to a person in India nor shall it accept deposits in India.
The liaison office, in India shall not acquire, hold (otherwise than by way of leasing for the amount not exceeding of 5 years) transfer or eliminate any immovable property in India without obtaining the prior permission of the RBI under FEMA .
The Liaison Office, in India shall furnish to the IRDA, on an annual basis, a certification from the auditor that the Office complied with the subsequent terms and conditions stipulated within the letter of approval issued by IRDA/RBI which all the expenses are met by way of approval means.
For Liaison Office established with IRDA/RBI approval, the closure are going to be allowed by IRDA under the intimation to RBI
The Liaison office in India won't have signing powers, except to the extent required for normal functioning of the office, on behalf of the top office.
The Foreign insurance firm which has opened the Liaison Office in India under this general permission for maintain the accounts in their books of liaison office in India. Subject to the condition the Credit should represent the funds received from Head office for meeting expenses in liaison office and Debit represents the local expense in liaison office.
The activities of those offices could also be verified by IRDA/RBI/Government of India by completing a scrutiny as and when found necessary.
The Liaison office should obey the laws effective in India and no compromise for the ignorance of Indian system in any manner.
Activities undertaken by Liaison Office:
RBI permitted the liaison office in India to hold the subsequent activities hereunder:
(i) Representing in India the parent company/group companies.
(ii) Promoting export import from/to India
(iii) Promoting technical/financial collaborations between parent/group companies and corporations in India.
(iv) Acting as a channel between the parent company and Indian companies.
FUNDS LYING WITH LIAISON OFFICE IN INDIA OF FOREIGN COMPANIES
A branch in India of foreign companies were allowed to stay the funds temporarily in terms deposits with maturity period of three months with an equivalent branch of authorized dealer to whom the account was maintained and Later the RBI decided to increase the maturity period from 3 months to six months for the term deposits of branch in India of foreign companies. Authorized dealers were satisfied with the term deposits of temporary surplus funds and branch undertaking the maturity proceeds of the term deposits are going to be utilized for his or her business in three months of maturity. However. Such facility isn't extended to shipping or airline companies.
Remittance of Profit or Surplus:
A person resident outside India permitted by the RBI to determine a branch in India may remit outside India the Profit of the Branch of the project on its completion, net of applicable Indian taxes, on production of the subsequent documents, and establishing internet profit or surplus, because the case could also be , to the satisfaction of the authorized dealer through whom the remittance is effected.
For remittance of profit of a branch:
(a) certified copy of the audited record and profit and loss account for the relevant year:
(b) a Chartered Accountant’s certificate certifying:-
(i) the way of arriving at the remittable profit,
(ii) that the whole remittable profit has been earned by undertaking the permitted activities, and
(iii) that the profit doesn't include any profit on revaluation of the assets of the branch.
For remittance of surplus on completion of the project
(a) certified copy of the ultimate audited project account;
(b) a Chartered Account’s certificate showing the way of arriving at the remittable surplus.
(c) tax assessment order or either documentary evidence showing payment of tax and other applicable taxes, or a accountant certificate stating that sufficient funds are put aside for meeting all Indian tax liabilities; and
(d) Auditor’s certificate stating that no statutory liabilities in respect of the project are outstanding.
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