Introduction to India、
India borders Pakistan and Afghanistan to the northwest, China, Bhutan and Nepal to the north, Myanmar to the east, and the Indian state of West Bengal to the east is Bangladesh.
The Indian economy is dominated by farming, modern agriculture, handicrafts, modern industry and their supporting industries. India has a large population who are proficient in English. It is currently the world's leading producer of information services, an exporter of computer software, and the homeland of many software engineers in the 21st century.
Types of Company Registration in India
In India, businesses can be registered in several different forms. The choice of business structure primarily depends on the company's operational direction and the long-term development plans of its shareholders.
Liaison Office
- Chinese companies can establish a Liaison Office (LO) or Representative Office in India, which must be approved by the Reserve Bank of India (RBI).
- Such offices act as a communication channel between the Chinese company and Indian clients or suppliers. Typically, Chinese companies set up Liaison Offices to enhance brand awareness and conduct preliminary market research to prepare for long-term market expansion and improve business performance in India.
- Liaison Offices are not allowed to conduct any commercial activities or generate any income in India. All expenses must be covered by the parent company in China through international remittances.
Branch Office
1.Chinese companies can also establish Branch Offices (BO) in India, which are permitted to conduct limited commercial activities. These offices require approval from the Reserve Bank of India (RBI).
2.A Branch Office can engage in activities such as B2B sales, marketing, after-sales services, acting as a procurement or sales agent for the Chinese parent company, and providing technical support for the products sold by the parent/group company.
3.Generally, a Branch Office should operate in the same or similar business sector as its Chinese parent company.
4.However, Branch Offices in India face certain restrictions. For instance, they are not allowed to engage in retail trading, manufacturing, or processing activities.
5.Advantages of registering as a Branch Office include simplified operations and an easier closure process. However, due to strict foreign exchange control policies, a Branch Office may not be the most suitable structure for companies seeking business diversification or large-scale expansion in India.
6.Taxation: A Branch Office is treated as an extension of its Chinese parent company and is taxed at foreign corporate tax rates. Additionally, transfer pricing regulations apply to transactions between the Branch Office and its parent company.
Project Office
1.If a Chinese company has secured a contract with an Indian company for project execution, it can set up a Project Office (PO) in India without requiring prior approval from the Reserve Bank of India (RBI), provided it meets certain reporting requirements.
2.Project Offices must be directly funded through foreign remittances from the parent company.
3.Like a Branch Office, a Project Office is considered an extension of the foreign company and is taxed at foreign corporate tax rates.
Private Limited Company (Pvt Ltd) & Public Limited Company
1.Chinese companies can set up subsidiaries in India in the form of a Private Limited Company (Pvt Ltd) or a Public Limited Company. The key differences are:
Private Limited Company:
- Minimum 2 shareholders
- Minimum 2 directors
- Public Limited Company:
- Minimum 7 shareholders
2. Minimum 3 directors
3. Chinese companies can establish a Wholly Owned Subsidiary (WOS) or form a Joint Venture (JV) with an Indian partner.
4. Compared to Liaison Offices, Branch Offices, and Project Offices, a Limited Liability Company provides the highest level of operational flexibility for businesses in India. However, exiting the market involves a lengthy and complex process.
limited liability partnership
1. Limited liability partnership (LLP) is a new company form in India. It not only has the advantages of a limited liability company, but also has flexibility, allowing its members to conduct internal management and business organization according to the mutual agreement.
2. Currently, wholly foreign-owned limited liability partnerships can only be established in industries that allow 100% foreign ownership under the automatic licensing (automaticroute) policy.
3. A form of company and a legal entity that can exist forever and be independent of its partners. The liability of a partner is determined by the investment intention reached with the LLP.
How to Register a Company in India
1. Domestic preparation work - business document certification
The information of Chinese enterprises or individuals, such as business licenses, original signatures, etc., must be consularly authenticated by the Ministry of Foreign Affairs of China and foreign embassies and consulates in China before they can be used for company registration in India.
2. Complete process of Indian company registration
2.1 Obtain director identity code
Apply for Director Status Code from Ministry of Corporate Affairs, India
2.2 Electronic signature authentication
It is available from 6 agents designated by the Ministry of Corporate Affairs of India, such as Tata Consultancy Services.
2.3 Registered Indian Company Name Registration
2.4 Determine the registered address of the Indian company
If not, you can rent an office from a local Chinese company in India
2.5 Fill in the application form for preparation of application materials
Applicants are required to fill in the following form online on the Ministry of Corporate Affairs of India’s website:
e-form 1 e-form 18 e-form 32
2.6 Submit application, pay stamp duty, and obtain business license
2.7 Printing of Charter
Binding the business license (Certificate of Incorporation), Memorandum of Association (MoA) and Articles of Association (AoA) into a formal booklet
2.8 Seal production
Create a Common Seal and Director Seal with the company name
2.9 Obtain permanent account PAN (used for tax payment)
PAN applications can also be made online, but relevant paper documents still need to be submitted to the designated agency.
2.10 Obtain tax account number TAN
TAN can be applied online. After paying by credit card, the paper version of the application documents should be submitted to NSDL in time.
2.11 Bank account opening
The ones used more frequently by foreign-funded enterprises include Citibank, Deutsche Bank, HSBC, etc.
2.12 Funding your bank account
After the bank account is issued, shareholders need to transfer money to the bank account of the newly registered company according to the information in the Memorandum of Association (MoA); the company directors must apply to the bank for a "Foreign Inward Remittance Certificate ("FIRC")"; the company directors sign a collection statement and submit it to the Reserve Bank of India within 30 days.
2.13 Share certificate filing
The company issues share certificates printed on the contract paper (Stamped duty) and submits them to the Company Registry for filing.
2.14 Capital verification
The directors sign the FC-GPR form and submit it to the Reserve Bank of India within 30 days; and the share allotment must be completed within 180 days after receiving the foreign remittance.
2.15 Apply for subsequent tax code
Indian company registration process
Type 1: Register as a natural person as a shareholder
1) Notarization and certification of director’s ID card and passport
2) Application for director electronic signature DSC and director identity code DIN
3) Company name verification
4) Fill in the business license application documents and pay the registration fee and stamp tax
5) Obtain a business license
6) Apply for company tax card PAN&TAN
Second type: Register with an overseas company as a shareholder
1) Overseas company business license, company articles of association and directors' resolutions related to investment in India and other documents must be notarized and authenticated at the Indian Embassy in China in the country of residence of the company.
2) Application for director electronic signature DSC and director identity code DIN
3) Company name verification
4) Documents such as the Indian company’s director appointment letter, director’s statement letter, shareholder statement letter, equity subscription letter, overseas company’s director resolution on equity subscription, etc. must be notarized and authenticated at the Indian Embassy in China in the country of residence of the company.
5) Fill in the business license application documents and pay the registration fee and stamp tax
6) Obtain a business license
7) Apply for company tax card PAN&TAN
Indian company registration fees
Indian company registration fees will be quoted based on the actual situation
What information is required to register an Indian company?
Type 1: Register as a natural person
basic materials
1) At least two directors and two shareholders, the same natural person can serve as both director and shareholder
2) Select an Indian as resident director
The definition of resident director: he has stayed in India for 183 days in the previous calendar year and has a corresponding residence certificate. Although the company law does not clearly indicate the nationality of this resident director, he can be appointed by any foreigner who meets the above conditions. However, in actual registration, if the resident director is an Indian national, it will be easier to be approved during the entire registration process.
3) Indian consular double authentication of identity documents of all shareholders and directors, such as passport and ID card. 5 passport size photos, PAN card of Indian director, address proof documents such as Ration Card, Election Card, etc.
4) Any recent electricity/water/internet bill receipt for the registered address, and a no-objection certificate (NOC) issued by the landlord that he agrees to use this address as the registered place of your company.
5) Registered capital starts from 100,000 rupees, which is approximately 10,000 yuan
Option 2: Registration with a Foreign Company as Shareholder
Basic Requirements:
- At least two directors and two shareholders.
- The foreign company can own 99.99% of shares and authorize a representative to sign all registration documents.
- Alternatively, multiple foreign companies can jointly hold shares and authorize representatives accordingly.
- Appoint at least one resident director in India.
- Notarized and authenticated documents for all shareholders, directors, and authorized representatives, including:
- Five passport-sized photos.
- Notarized business license, Articles of Association (AoA), Memorandum of Association (MoA), and board resolutions of the foreign company.
- PAN card and address proof of the Indian resident director.
- Proof of the registered office address, including recent utility bills and a No Objection Certificate (NOC) from the landlord.
- Determine the registered capital, which should cover at least 3-6 months of basic operating expenses.
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