FAQs on Registration of Foreign Companies and Subsidiaries
Frequently Asked Questions (FAQs) on Registration of Foreign Companies and Subsidiaries in India
1. Form FC-1 – Registration of a Foreign Company
When is Form FC-1 required to be filed?
A foreign company establishing a place of business in India is required to file Form FC-1 with the Registrar of Companies (ROC/CRC) within 30 days from the date on which the place of business is established.
The filing is generally supported by documents such as the constitutional documents of the foreign entity, details of directors and secretaries, and the relevant authorisation, including a Board Resolution or Power of Attorney.
Is a fresh FC-1 required for every new project after obtaining an FCRN?
No. A new FC-1 is not required merely because the foreign company undertakes another project.
Subsequent projects or changes can generally be reported through Form FC-2. However, where a new project results in the establishment of a separate place of business in India, a fresh FC-1 may be required.
Does an extension of RBI approval for a Liaison Office require another filing?
Yes. Where the RBI extends the approval granted to a Liaison Office, the extension is required to be reported to the MCA through Form FC-2.
2. Annual Compliance of Foreign Companies
Which forms are applicable for annual filing by a foreign Branch Office?
A foreign company having a place of business in India is generally required to comply with the annual filing framework prescribed for foreign companies, including:
- Form FC-3 – submission of annual accounts and related documents; and
- Form FC-4 – annual return of the foreign company.
What information is required in Form FC-4?
Form FC-4 contains information relating to the foreign company and its Indian establishment. The filing may include particulars concerning the parent entity, directors, meetings and other prescribed corporate information.
3. Other MCA Registration-Related Matters
What should be done if the CIN needs to be changed from PTC to FTC after an Indian company becomes a wholly owned subsidiary?
An appropriate e-Form/Change Request Form is required to be submitted to the jurisdictional ROC for updating the company’s master data.
Is CSR-2 applicable to a foreign bank branch?
A foreign company is not automatically outside the scope of CSR provisions. Where the prescribed eligibility conditions under Section 135 of the Companies Act, 2013 are satisfied, the applicable CSR requirements need to be considered.
Should MCA approval be obtained before or after IFSCA approval for a Branch in GIFT IFSC?
Where a foreign company proposes to establish a Branch in GIFT IFSC, the requisite IFSCA approval precedes the filing of Form FC-1 with the MCA.
4. Permitted Activities of Different Types of Foreign Offices
The activities that may be undertaken depend upon the nature of the establishment and the approval granted by the relevant authority.
Liaison Office
A Liaison Office may undertake activities such as:
- Representing the foreign parent or its group entities in India;
- Facilitating exports from or imports into India;
- Promoting technical or financial collaboration between the foreign group and Indian entities; and
- Acting as a communication link between the foreign parent and Indian businesses.
The activity/NIC classification selected in the MCA filing should correspond with the activities permitted for the Liaison Office under the applicable RBI framework.
Project Office
A Project Office is generally restricted to activities connected with the specific project for which approval has been obtained.
Branch Office
Subject to the applicable approval conditions, a Branch Office may undertake activities including:
- Import and export of goods;
- Professional or consultancy services;
- Research activities in areas in which the parent company operates;
- Facilitating technical or financial collaborations;
- Representing the foreign parent in India and acting as its buying or selling agent;
- Information technology and software development services;
- Technical support for products supplied by the parent/group companies; and
- Activities of foreign airline or shipping companies, where permitted.
Activities Restricted for Branch Offices
A Branch Office is generally not permitted to:
- Carry out retail trading activities of any kind; or
- Undertake manufacturing or processing activities in India, whether directly or indirectly.
5. Validity of Different Foreign Offices
| Type of Office | General Validity |
|---|---|
| Liaison Office | Initial approval may be granted for up to 3 years, with further extensions subject to applicable conditions |
| Project Office | Generally linked to completion of the approved project |
| Branch Office | Generally permitted for an unlimited period, subject to applicable approvals |
| Other Office | As specified in the relevant RBI approval |
6. Name Reservation for an Indian Subsidiary of a Foreign Company
Why can a subsidiary’s proposed name be rejected even when it matches the foreign parent?
The proposed name must satisfy the name-availability and similarity requirements under the applicable provisions of the Companies (Incorporation) Rules, 2014.
The name of a foreign holding company may, where permissible, be used with an addition such as “India” or the name of an Indian State or city. However, simply adding “India” does not automatically make a name distinguishable from an existing Indian company.
What is the basic test for approval of a proposed name?
Two aspects generally need to be considered:
- The proposed name should be available in the MCA name database; and
- The name should not violate the restrictions relating to resemblance or similarity with an existing company or LLP.
Example
Suppose a US company named Techshine LLC proposes to incorporate Techshine India Pvt. Ltd., but an existing Techshine Pvt. Ltd. is already registered in India.
The ROC may require the foreign investor to choose another name because of the similarity. Alternatives could include names such as:
- Techshine Solutions India Pvt. Ltd.
- Techshine Digital India Pvt. Ltd.
- Techshine Innovations Pvt. Ltd.
The final approval remains subject to name availability and the applicable rules.
Does ownership of a trademark or authorisation from the foreign parent guarantee name approval?
No. Even where the foreign parent owns the relevant trademark or provides an authorisation letter, the proposed Indian company’s name must independently satisfy MCA name-availability and similarity requirements.
What if a third party owns a trademark identical to the proposed company name?
Where no similarly named company exists but an unrelated party owns a registered trademark, the ROC may require an NOC from the trademark proprietor, particularly where the proposed business activities overlap with the goods or services covered by the trademark.
Where the activities are unrelated, the proposed name may potentially be considered without such an NOC, depending on the circumstances.
7. Documents Required for Registration of a Foreign Company
The principal documents generally include:
- Charter documents, Articles of Association or equivalent constitutional documents;
- Certificate of Incorporation;
- Board Resolution or Power of Attorney;
- Approval from RBI, IFSCA, AD Bank or another relevant authority, wherever applicable;
- Identity and address proofs of directors and secretary;
- List of directors and secretary;
- Identity and address proof of the authorised representative in India, including PAN; and
- Proof of the Indian place of business along with the relevant NOC or agreement for use of the premises.
Documents originating outside India may also need to satisfy applicable notarisation, apostille or consularisation requirements.
Non-English documents should generally be accompanied by an appropriate certified English translation.
8. Apostille, Notarisation and Certification Requirements
What certification is required for documents of a foreign company?
Depending upon the country of origin and the nature of the document, copies of constitutional documents, incorporation documents, Board Resolutions/authorisations and identity/address documents may need to be notarised, apostilled or consularised in accordance with the applicable rules.
What happens when the foreign country is a member of the Hague Apostille Convention?
Documents originating from a Hague Apostille Convention country may generally be required to be apostilled, subject to the applicable requirements.
What if the document originates from a country where apostille is not applicable?
In such cases, the prescribed notarisation and consularisation process may apply.
The exact requirement depends on the jurisdiction where the document is executed and the applicable Indian rules.
9. Subscription Documents for Incorporation of an Indian Subsidiary
Can foreign subscribers sign the subscriber sheet?
Yes. Foreign subscribers may execute the relevant incorporation documents subject to the prescribed requirements.
Where a foreign national signs the documents outside India, the documents may need to undergo the appropriate notarisation, apostille or consularisation process applicable in the jurisdiction where the signing takes place.
Where signing is undertaken in India, the applicable MCA requirements for execution and electronic incorporation documents need to be followed.
Does the place where the document is signed matter?
Yes. The certification requirement generally depends on the jurisdiction in which the document is executed, rather than merely on the nationality of the person signing it.
For example, the requirements applicable to a US national signing documents in Malaysia may differ from those applicable to a South African national executing the same documents in the USA.
Are there additional requirements for subscribers from land-border-sharing countries?
Additional regulatory and security-related requirements may apply to individuals or entities connected with countries sharing a land border with India.
Depending upon the circumstances, prior approvals or clearances under the applicable FDI policy and government procedures may be required.
What is the requirement for a German parent company?
Where the relevant documents originate from Germany and apostille requirements are not applicable in the circumstances, the prescribed notarisation and consularisation process may apply.
What is required for a US parent company?
Subscription documents executed in the USA by a foreign corporate subscriber generally require notarisation followed by apostille, subject to the applicable incorporation requirements.
Does the foreign parent’s Board Resolution for name approval also need apostille?
Not necessarily. The prescribed notarisation/apostille requirements generally apply to documents such as the MoA/AoA subscription documents and identity/address proofs. A Board Resolution does not automatically require the same treatment unless specifically required under the applicable circumstances.
What about documents executed in Dubai?
Where apostille is not applicable, the prescribed notarisation and consularisation process may be required for documents executed in Dubai.
10. RBI, IFSCA and Other Regulatory Approvals
Is there a single-window approval for registering a foreign company?
There is no single approval mechanism that eliminates the need for sector-specific regulatory permissions.
The National Single Window System (NSWS) can assist applicants in identifying applicable approvals, but it does not replace MCA filings or approvals required from sectoral regulators.
Where applicable, Form FC-1 must be accompanied by the relevant regulatory approval, such as RBI approval under FEMA.
Can a foreign company establish an LO/BO/PO without RBI approval?
For a foreign entity establishing a Liaison Office, Branch Office or Project Office, the applicable RBI approval requirements must be considered.
For establishments in the IFSC framework, IFSCA may be the primary approving authority. However, specific categories, including certain entities from land-border-sharing countries and banking units, may require RBI approval before the IFSCA process.
Are additional approvals required where a UK company has Chinese shareholding?
The applicable requirements depend on the ownership and beneficial ownership structure.
For example, appointment of directors connected with land-border-sharing countries may involve security clearance through the prescribed e-Sahaj process. In addition, the applicable FDI policy may require prior government approval depending upon the ownership structure and sector.
Does MCA automatically share its information with RBI?
There is no assumption that filing or approval with one authority automatically satisfies the documentation requirements of another. MCA and RBI may have separate filing and documentation requirements.
11. NRI Investment Through NRE/NRO Accounts
Do FEMA/RBI provisions apply when an NRI invests through an NRE or NRO account?
Yes. Routing an investment through an NRE or NRO account does not by itself remove the applicable RBI/FEMA compliance requirements.
The nature of the investment and the status of the investor should therefore be evaluated under the applicable FEMA framework.
12. Resident Director and Authorised Representative Requirements
Is an Indian director mandatory when a foreign company establishes a place of business in India?
Not necessarily.
For a foreign company having a place of business in India, the applicable requirement is for one or more persons resident in India to be authorised to accept service of process and notices.
This should be distinguished from an Indian company incorporated under the Companies Act, for which the requirement of at least one resident director under Section 149(3) applies.
Does the authorised representative have to be an Indian citizen?
No. The requirement is based on residency and authority to receive notices/service of process, rather than necessarily on Indian citizenship or appointment as a director.
13. Foreign Nationals and Entities from China
Can Chinese nationals or Chinese entities establish a company in India?
They may be able to do so, subject to the applicable FDI policy, government approval requirements and security clearances.
Where applicable, prior security clearance through the prescribed e-Sahaj process may be required for directors from countries sharing a land border with India before DIN-related procedures can be completed.
Are there special restrictions for certain foreign countries?
Yes. Specific regulatory conditions apply to entities and nationals from certain countries, including countries sharing a land border with India.
For example, prior RBI permission may be required for certain entities from specified countries seeking to establish a place of business in India.
Additional restrictions may also apply to acquisition of immovable property. In certain cases, leasing property for a prescribed period may be permitted instead.
14. Is a Wholly Owned Indian Subsidiary a Foreign Company?
Does a 100% subsidiary of a foreign company have to register as a foreign company?
No.
If a foreign entity incorporates a company in India, that entity is incorporated as an Indian company. The fact that all its shares are owned by a foreign parent does not, by itself, make the Indian subsidiary a “foreign company” under Section 2(42) of the Companies Act, 2013.
What if an existing Indian company is acquired completely by a foreign company?
Acquisition of 100% of the shares by a foreign company does not automatically convert the Indian company into a foreign company.
The company continues to remain an Indian incorporated company, subject to applicable corporate, FDI and other regulatory requirements.
15. Branch Office – Legal Status and Employees
Can a Branch Office enter into contracts independently and employ staff in India?
A Branch Office does not constitute a separate legal entity from its foreign parent.
Consequently, contracts and employment arrangements entered into through the Branch Office are effectively undertaken on behalf of the foreign company, subject to the applicable laws and permissions.
16. CSR Compliance for Foreign Companies
How is CSR reporting handled by a foreign company?
Section 384(2) extends the applicability of Section 135 relating to CSR to foreign companies to the extent prescribed.
Where CSR provisions apply, the relevant reporting requirements need to be considered along with the annual filing framework applicable to foreign companies, including FC-3 and FC-4, as applicable.
17. Validity of Notarised and Apostilled Documents
Is there a fixed validity period for notarised or apostilled incorporation documents?
The Companies Act, 2013 and the relevant rules do not prescribe a universal fixed validity period for every notarised or apostilled document.
The validity may depend upon the document, the issuing authority and the requirements prescribed by the concerned regulatory authority.
18. Must Every Foreign Company Operate Through a Branch, Liaison or Project Office?
No.
The definition of a foreign company under the Companies Act is not restricted exclusively to the BO/LO/PO classifications under FEMA.
Where a foreign company’s Indian establishment does not clearly fall within these categories, the nature of the establishment and the applicable approval requirements may need to be examined with the ROC/CRC and other relevant authorities.
Where no specific regulatory approval is required, an appropriate declaration from the authorised representative may be required in accordance with the applicable provisions of the Companies (Registration of Foreign Companies) Rules, 2014.
