Advance authorization scheme for exports
Fema Experts
Incorporation & Registration Service
1. Incorporation of Liason Office
This service is applicable to Foreign company who want to do the business through Unincorporated mode.
A liaison office:
– Represents the parent company in the host country.
– Conducts market research, networking, and promotion.
– Does not undertake commercial activities like sales or earning income directly.
Liaison Office Restrictions
– No direct invoicing or revenue generation.
– Expenses are typically covered by remittances from the parent company.
– Operations are usually limited to specified activities like marketing, brand promotion, and liaison with clients or partners.
Services Covered-
– Consultation in relation to Liason office
– Determing the Route whether Automatic or Approval route
– Filing of Form FNC – 1
– Filing of Form FC-1 (with registrar of companies)
– Filing of PAN application
– Filing of TAN application
– Filing of Income tax return
– Filing of Annual Activity Certificate to Concerned AD Bank
– Filing of Form FC-4 and FC-3 (Annual Filing)
– Obtaining Digital signature
– Preparation and filing of Annual financial statements
Document to be submitted
Board Resolution, covering letter, Draft prescribed Form Part 1, Draft prescribed Form part 2 (Declaration), LO Application, Foreign direct investment eligibility and Source of Fund, RBI format as per KYC, Copy of Certificate of Incorporation, MOA, AOA, Applicants background details, List of Shareholder, List of Directors
Incorporation & Registration Service
2. Incorporation of Branch Office
This service is applicable to foreign companies looking to establish a physical presence in India can do so by registering a foreign branch office. Incorporating a liaison office involves establishing a representative branch of a foreign company in a specific country to facilitate communication and coordination without engaging in commercial trading or revenue-generating activities. The process and requirements vary by jurisdiction, but here’s a general guide –
A Branch Office:
– Can engage in commercial activities (e.g., sales, service delivery).
– Generates revenue and enters into contracts.
– Operates under the parent company’s name and governance.
– Does not have a separate legal identity from the parent company.
Limitations of a Branch Office:
-The parent company is fully liable for the branch’s debts and obligations.
– It is not a separate legal entity; lawsuits can directly affect the parent company.
– Activities are limited to those permitted by the registration.
Services Covered-
– Consultation in relation to Branch office
– Determing the Route whether Automatic or Approval route
– Filing of Form FNC – 1
– Filing of Form FC-1
– Filing of PAN application
– Filing of TAN application
– Filing of Income tax return
– Filing of Annual Activity Certificate to Concerned AD Bank
– Filing of Form FC-4 and FC-3
– Filing of Foreign Liability and Asset ( FLA ) Return
– Preparation and filing of Annual financial statements
Document to be submitted
Duly Filled Form FNC-1, Board Resolution, Certificate of Incorporation, Articles or Charter of parent company, Audited financial statements of 5 Years, Bankers Standing Report, List of Shareholders & Directors, KYC of all Directors, Proof of Registered Address of Branch Office (Utility bills / Rent Agreement / Lease Agreement / Property Tax Receipt), NOC From the Owner, Resident Indian representative KYC
Incorporation & Registration Service
3. Project Office Registration
This service is applicable to foreign company looking to establish a project office is a type of temporary office established by a foreign company to execute specific projects in a host country. It is commonly used in industries like construction, infrastructure, IT, and energy. Project offices are typically tied to the duration of the project and are subject to local regulations. Here’s a step-by-step guide for registering a project office:
Understand the Purpose of a Project Office-
– A project office is set up to oversee and execute a specific project.
– It operates as an extension of the foreign company.
– It is temporary and usually exists only for the duration of the project.
– Commercial activities are limited to those directly related to the project.
Limitations of a Project Office:
– It cannot undertake activities beyond the specified project.
– The parent company bears full liability for the project office’s operations.
– It is bound by the terms and duration of the project.
Services Covered-
– Consultation in relation to Project office
– Determing the Route whether Automatic or Approval route
– Filing of Form FNC-1 ( AD Bank)
– Filing of Form FC-1 ( Registrar of Companies)
– Filing of PAN application
– Filing of TAN application
– Filing of Income tax return
– Filing of Annual Activity Certificate to Concerned AD Bank
– Filing of Form FC-4 and FC-3 ( Filing of Annual return and Financial Statements to ROC)
– Filing of Foreign Liability and Asset ( FLA ) Return
– Preparation and filing of Annual financial statements
Document to be submitted
• Application Form: For registration with the relevant authorities.
• Parent Company Documents.
• Certificate of Incorporation (notarized and apostilled if required).
• Articles of Association or Charter.
• Audited financial statements of the parent company.
Project Details:
• Contract or agreement for the specific project.
• Duration and financial details of the project.
Board Resolution: Authorizing the setup of the project office.
• Parent Company Documents.
• Certificate of Incorporation (notarized and apostilled if required).
• Articles of Association or Charter.
• Audited financial statements of the parent company.
Project Details:
• Contract or agreement for the specific project.
• Duration and financial details of the project.
Board Resolution: Authorizing the setup of the project office.
Incorporation & Registration Service
4. Incorporation of Subsidiary of Foreign company
This service is applicable to Incorporating a subsidiary of a foreign company involves setting up a separate legal entity in a host country that is owned, wholly or partially, by the foreign parent company. Unlike branch or project offices, a subsidiary operates independently, with its liabilities typically limited to the local entity.
Understand the Purpose of a Subsidiary-
A subsidiary:
– Operates as a separate legal entity.
– Can engage in a wide range of commercial activities.
– Is distinct from the parent company in terms of liability, governance, and operations.
– Is taxed as a domestic company in the host country.
Determine the Legal Structure-
Select the appropriate legal structure for the subsidiary. Common options include:
-Private Limited Company: Popular for its limited liability and separate legal identity.
-Public Limited Company: Suitable for larger operations intending to raise public funds.
-Limited Liability Partnership (LLP): If the business involves partnerships.
-Joint Venture Company: If the subsidiary involves local partners.
As a foreign individual, you have only two options: a Private Limited Company or an LLP. As per FEMA, a foreigner can not do business as a Proprietor in India, and a foreign national can not set up a partnership firm in India. Though LLP Incorporation with FDI is permitted, the tax rate is high. We recommend establishing a Private Limited Company, as the process is straightforward.
In case of company FDI is 100% allowed in most sectors. However, limited FDI is allowed in strategic sectors such as Media, Housing, etc. and In case of LLP- FDI is allowed only in those sectors where 100% FDI is allowed.The corporate tax rate is 15% for manufacturing and 22% for new Companies.The Income Tax rate of the LLP in India is 30%
Research Local Regulations-
Understand the host country’s legal requirements for foreign-owned subsidiaries, such as:
– Minimum capital requirements.
– Restrictions on foreign ownership in specific industries.
– Permitted activities and licensing requirements.
– Tax obligations and incentives for foreign investments.
Incorporation Procedure-
– Name approval in RUN (Reserve your unique Name)
– Class 3 (2 No.)
– Filing of SPICe form
– Issue of Incorporation Certificate
– GST Registration application
– Includes Govt Fees & Stamp duty for Authorized Capital upto Rs. 1 Lakh except for the states of Punjab, Madhya Pradesh and Kerala
– Complimentary Expert Consultancy of 30 minutes around post incorporation
Document to be submitted
• Documents from Foreign Individual-
Passport, Address Proof, Colour Photo
• From Indian Resident Director- Aadhar card, PAN card, Colour Photo, Identity Proof, Address Proof
• Proof of registered office- Proof of Registered Office address should not be older than two months. The utility bill must have the full name and complete address. And Rent agreement
• From Indian Resident Director- Aadhar card, PAN card, Colour Photo, Identity Proof, Address Proof
• Proof of registered office- Proof of Registered Office address should not be older than two months. The utility bill must have the full name and complete address. And Rent agreement
Incorporation & Registration Service
5. Legal Identifier Registration
In India, obtaining a Legal Entity Identifier (LEI) is crucial for entities involved in financial transactions, particularly under regulatory requirements by the Reserve Bank of India (RBI) and other financial bodies. Here’s how to register an LEI in India:
Overview of LEI in India-
Mandate by RBI: LEI is required for:
– Over-the-counter (OTC) derivative transactions.
– High-value transactions in centralized payment systems (RTGS/NEFT).
– Non-derivative financial market transactions above a threshold.
– Indian LOU: The LEI system in India is overseen by the RBI and managed by Legal Entity Identifier India Ltd. (LEIL), a subsidiary of the Clearing Corporation of India (CCIL).
Steps for Registering an LEI in India-
Step 1: Prepare the Required Documents. To register for an LEI, you’ll need the following:
Entity Details:
– Name, legal structure, and type of entity.
– Registered and operational address.
– Corporate Identification Number (CIN) or equivalent registration ID.
Parent Entity Details (if applicable):
– Information on direct and ultimate parent companies.
Proof of Legal Existence:
– Certificate of Incorporation, Partnership Deed, or equivalent documentation.
Authorization Letter:
– Signed by the authorized signatory of the entity, specifying the requestor’s role in obtaining the LEI.
Step 2: Access the LEIL Portal
– Visit the LEIL official website: LEIL – Legal Entity Identifier India Ltd..
– Register by creating a user account for your entity.
Step 3: Complete the Application
Fill in the required information, including:
– Entity’s name, registration details, and address.
– Contact details of the authorized signatory.
– Upload scanned copies of the supporting documents.
Step 4: Submit the Application
– Review the form and documents before submission.
– Submit the application online via the LEIL portal.
Step 5: Pay the Fees
– Registration fees in India typically range from ₹4,000 to ₹6,000 (plus GST), depending on the entity type.
– Payment can be made online through the portal.
Step 6: Verification by LEIL
– LEIL will validate your application against the provided documents and the Ministry of Corporate Affairs (MCA) database.
– If there are discrepancies, LEIL may request additional information or clarification.
Step 7: Receive Your LEI
– Upon successful verification, you will receive your 20-character LEI code via email.
– The code will also be listed on the global LEI database maintained by GLEIF (Global Legal Entity Identifier Foundation).
Incorporation & Registration Service
6. Creation of Business user on RBI Portal
Creating a Business User account on the FIRMS (Foreign Investment Reporting and Management System) portal of the Reserve Bank of India (RBI) is a crucial step for entities engaged in foreign investment or foreign exchange transactions. The FIRMS portal is used to report transactions such as FDI (Foreign Direct Investment), ODI (Overseas Direct Investment), and LLP investments.
A Business User account is needed to:
– Report foreign direct investments (FDI), such as Form FC-GPR, Form FC-TRS, and others.
– Submit filings for External Commercial Borrowings (ECB).
– Comply with other FEMA-related reporting requirements.
Steps for Creating a Business User
Visit the FIRMS Portal:
Go to the FIRMS portal (https://firms.rbi.org.in).
Select ‘Business User’:
On the homepage, choose the option to register as a “Business User.”
Complete the Registration Form:
Fill in details like:
- Entity Name (Company, LLP, or other legal entities).
- Corporate Identification Number (CIN) or LLP Identification Number.
- Name and contact details of the Authorized Representative (e.g., CFO or Company Secretary).
- Valid email address and mobile number for communications.
Upload Supporting Documents:
Attach required documents, such as:
- Authority Letter: Issued by the entity authorizing the individual to act as the Business User. This letter should be signed by an authorized signatory (e.g., Managing Director).
- PAN or Registration Certificate of the entity.
- Identity and address proof of the authorized individual.
Submit the Application:
Once the form is completed and documents are uploaded, submit the application.
Verification by RBI:
The RBI reviews the application and supporting documents. This process may take a few business days.
Approval and Login Credentials:
Once approved, the RBI sends login credentials (user ID and password) to the registered email address. The Business User can now access the FIRMS portal to make filings.