India is among one of the fastest-growing economies in the world. It has plenty of new business opportunities that make it a preferred destination for foreign investments. From investments by Foreign Corporates, Foreign Nationals, and NRIs, there are many ways by which foreign investment can be done in India. However, one of the easiest ways to do this is by the registration of foreign company in India.

Foreign companies can register themselves in India in accordance with the rules laid down under the Companies Act, 2013. According to the Ministry of Corporate Affairs (MVA), if you’re a foreign entity setting up a business in India, you can either create a registered Indian company or open an offshoot of your parent company in India. Let us first understand what makes foreign entities eligible to be called foreign companies, their ways of businesses in India, and how to register for a company in India.

What is a foreign company?

As per the Companies Act, 2013, a foreign company means any entity or corporate body outside of India which has a place of business in India (either by itself or through an agent, physically or through electronic mode) and conducts any business activity in the India market in any other manner.

How can a foreign company do business in India?

Foreign companies can enter the Indian market via two ways. The first is to enter as an Indian company incorporated in India and the shares held by foreigners as a wholly-owned subsidiary (100% FDI), Joint venture, or a subsidiary company (49.99% Foreign Shares). The second is by registering the foreign company under the Companies Act, 2013 via a Liaison office, a Branch Office or a Project office to do foreign business in India.

In order to register a foreign company under the Companies Act, you need to select the type of your company. There are certain constraints on the type of company and Foreign Direct Investments (FDIs). Thus, whether private, public or LLP, you need to select your company type and then register as per the procedures for that company type. Let us now see how to register for a company in India.

Procedure of Registration of Foreign company in India

Step 1. Obtaining Digital Signature Certificate (DSC) and Director Identification Number (DIN)

The process towards Foreign Company Registration in India starts by applying for the DIN (Director’s Identification Number) and DSC (Digital Signature) of the Directors. DSC, as the name suggests, is required to sign electronic documents and forms digitally. They also serve to notify the Ministry of Corporate Affairs (MCA) of the existence of your business. Each Director (number depends on the type of company) must have a unique Director ID which can be obtained by applying for the SPICe (Simplified Proforma for Incorporating a Company).

Documents Required:

  • Proof of Identity (PAN for Indian Nationals and Copy of Passport for Foreign Nationals)
  • Copy of Driving License, Bank Statement or any utility bill (not older than two months)
  • Residence permits for foreigners if residing in India.
  • Passport size photograph

All the documents mentioned above for foreign citizens and NRIs should be notarized and consularized by the competent authority.

Step 2: Obtaining name for your company

Selecting a unique name for your company is one of the important steps in the whole process of incorporation. Once you have the DIN for your company, you must register as a new user, usually a business user on the MCA website. Your company’s name should be in accordance with the company’s object and should not be identical to existing entities or undesirable by law. You can apply to register for a particular company name by using the Reserve Unique Name (RUN) service available on the MCA website.

Step 3: Certificate of Incorporation

The certificate of incorporation is given to you when the company is incorporated according to procedures outlined in the Companies Act. This is the final step in the process of registration of foreign companies in India. It requires the filing of the articles and memorandum of Association of the Company digitally along with various other documents.

Documents Required:

  • Subscriber sheet of Articles of Association
  • Subscriber sheet of Memorandum of Association
  • Declaration by Director in form DIR 2
  • Declaration of Director in Form INC 9

The incorporation documents are generally required to be self-attested by Indian nationals. However, for foreign nationals, there are a few other compliances that need to be followed.

With the Certification of Incorporation, your company registration will be successful. You should, however, note that it could take up to 15 days to register your company, given you have all the documentation in place. You will also need certified accountants, company secretaries, and lawyers to accelerate the process and keep you in compliance with all of the major and minor details and laws for the registration of foreign company in India.