INCORPORATE A FOREIGN SUBSIDIARY COMPANY IN INDIA

A foreign subsidiary is a company in which majority of shares/voting rights are held by a foreign holding company. Incorporating a foreign subsidiary is one of the routes through which a foreign company can enter the Indian market. Due to continuous regulatory reforms and ever-increasing market size, this has been the most preferred option for carrying out the business in India.

Forms of a Foreign Subsidiary Company:

There are two forms in which a foreign subsidiary can be incorporated:

Private Limited Company: It can be formed with minimum 2 members and 2 directors. There is no restriction on minimum capital. However, a maximum of 200 members are allowed in a Private Company.
Public Limited Company: A Public Limited Company can be formed with minimum 7 members and 3 directors. There is no restriction on minimum capital to be deployed. Further, there is no limit on the maximum number of members for a Public Company.

Process of Incorporation of Foreign Subsidiary Company

Pass a board resolution by the foreign holding company which shall contain proposed names of the subsidiary company, number of shares proposed to be subscribed, name & address of the authorized representative, etc.
Make an application in Form SPICE+ Part A for reservation of name of the foreign subsidiary company.
Once the name is approved by the Ministry of Corporate Affairs (MCA), obtain the Digital Signature Certificate (DSC) of both the directors.
Arrange the notarized and apostilled copy of the foreign documents.
Fill the Form SPICE+ Part B along with Form AGILE and upload the same on MCA portal.
Once the form is correctly filed with all the necessary documents, the company is incorporated in due time.

Documentation Requirements:

A complete set of following documents are required to be uploaded for the incorporation of foreign subsidiary:

Sr No.	Documents	Notary & Apostille Requirements
1.	Memorandum of Association (MOA)	Yes
2.	Articles of Association (AOA)	Yes
3.	Consent to Act as Director in Form DIR-2	Yes
4.	Declaration from Subscribers and Directors in Form INC-9	Yes
5.	ID Proof of Foreign Director (Passport, Driving Licence)	Yes
6.	Address Proof of Foreign Director (latest bank statement, electricity bill or telephone bill)	Yes
7.	No PAN Declaration of Foreign Director	Yes
8.	ID Proof of Indian Director (Aadhar, PAN, Passport, Driving Licence)	No
9.	Address Proof of Indian Director (latest bank statement, electricity bill or telephone bill)	No

Conclusion:

Due to the favorable demographic situation and multiple reforms such as Digital Public Infrastructure, Make in India Initiative, well-settled GST transition, infrastructural developments and overall positive economic environment, India has emerged as the one of fastest economies in the world. Consequently, India has continuously witness a record amount of FDI over past few years. Considering these factors, incorporation of a foreign subsidiary provides a key platform for outside companies to enter the Indian market and grow their business.

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