Q&A about setting up foreign-owned Limited Liability Company in India

WFOE Registration, Work Permit, Special Industry Permit application according to New Delhi Regulations, we need to do KYC (Know your client) before engagement with your assignment.

Email: del4ww@evershinecpa.com
A-16, 1st Floor, Aruna Asaf Ali Marg, Qutub Institutional Area, New Delhi, 110067, India
Deputy Manager Henry Ko  ,  USA Oregon University Bachelor ,speak  in fluent  English. Skype: henryko

Drafted by Dale Chen 20230630 v1
R-in-llc
India Foreign-funded Limited Liability Company
R-in-llc-1
India – Organizational Structure of Foreign-funded Companies
R-in-llc-1-10
What are the types of Foreign-funded Companies in India?

1. Private Limited Company: A foreign company can set up a private limited company as a WOS in India. This is the most common type of business entity in India and offers limited liability to its shareholders.
2. Joint Ventures (JV): A joint venture is a partnership between a foreign company and an Indian company, where both parties contribute capital, technology, and expertise. The profits, risks, and management responsibilities are shared as per the agreed terms.
3. Liaison Offices: A liaison office is set up by foreign companies in India to facilitate communication between the parent company and Indian businesses. These offices are not allowed to undertake any commercial activities but can promote and represent the parent company’s interests.
4. Branch Offices: A branch office is an extension of a foreign company that carries out similar business activities as the parent company. It acts as a representative office and can engage in commercial activities in India.
5. Project Offices: Project offices are established by foreign companies for executing specific projects in India. These offices are temporary in nature and are typically set up for the duration of the project.
6. Limited Liability Partnerships (LLPs): LLPs are a relatively new form of business entity in India. Foreign entities can participate in LLPs by forming a Limited Liability Partnership with an Indian partner.
   Submit
   https://www.ecovis.com/global/setting-up-a-business-in-india-for-foreign-companies/

R-in-llc-1-15
What are the procedures for setting up the Foreign-funded Limited Liability Company in India?

1. Obtain Director Identification Number (DIN): The first step is to obtain a Director Identification Number (DIN) for the proposed directors of the company. DIN can be obtained by filing an online application with the Ministry of Corporate Affairs (MCA).
2. Obtain Digital Signature Certificate (DSC): All the proposed directors must obtain a Digital Signature Certificate (DSC) from government-approved certifying agencies. DSC is required for online filing of company registration documents.
3. Reserve Company Name: The next step is to reserve a unique name for the LLC. An application for name reservation must be submitted to the Registrar of Companies (ROC) along with the prescribed fee. The name should comply with the naming guidelines provided by the MCA.
4. Prepare and File Incorporation Documents: Once the name is approved, the company’s incorporation documents must be prepared, which include the Memorandum of Association (MOA) and Articles of Association (AOA). These documents outline the company’s objectives, shareholding structure, and internal governance rules. The incorporation documents, along with other required forms, need to be filed with the ROC. Also, identify the state in which the registered office will be situated.
5. Payment of Registration Fees: The registration fees for the LLC must be paid to the ROC at the time of filing the incorporation documents. The fees are based on the authorized share capital of the company.
6. Obtain Certificate of Incorporation: If all the documents and forms are in order, and the ROC is satisfied with the compliance, a Certificate of Incorporation will be issued. This certificate signifies the formation of the LLC.
7. Obtain Permanent Account Number (PAN) and Tax Registration: After obtaining the Certificate of Incorporation, the LLC needs to apply for a Permanent Account Number (PAN) from the Income Tax Department. Additionally, depending on the nature of the business, the company may need to register for Goods and Services Tax (GST) or other applicable tax registrations.
8. Foreign Investment Reporting: The LLC must comply with the reporting requirements of foreign investment to the Reserve Bank of India (RBI) or other designated authorities, if applicable.
   

   Submit

   https://cleartax.in/s/foreign-company-india-registration

R-in-llc-1-20
What are the requirements for holding a position of director, manager/ supervisor, company secretary, etc. in India’s foreign-funded companies?

1. Director:
   • Minimum Age: Directors must be at least 18 years old.
   • Director Identification Number (DIN): Every director must obtain a unique DIN from the Ministry of Corporate Affairs (MCA).
   • Disqualification: Certain individuals, such as undischarged bankrupts, convicted persons, or those declared mentally unfit, are disqualified from being directors.
   • Responsibilities: Directors have fiduciary duties towards the company, including acting in the company’s best interest, exercising due diligence, and complying with applicable laws and regulations.
2. Manager/Supervisor:
   • Qualifications and Experience: There are no specific qualifications required to hold a managerial or supervisory position in a foreign-funded company.
   • Roles and Responsibilities: Managers and supervisors are responsible for overseeing day-to-day operations, managing employees, implementing company policies, and achieving business objectives.
3. Company Secretary:
   • Qualifications: A company secretary must be a member of the Institute of Company Secretaries of India (ICSI) and hold a valid certificate of practice.
   • Responsibilities: The company secretary acts as a key advisor to the board of directors and ensures compliance with legal and regulatory requirements. They handle matters related to corporate governance, company filings, board meetings, and other legal and administrative functions.

R-in-llc-1-30
How long the share capital of a India Foreign-funded Limited Liability Company must be hold before it can be sold?

Subject to any restrictions specified in the company’s articles of association or shareholders’ agreement.
If the foreign-funded LLC falls under sector-specific regulations or has obtained approvals from regulatory authorities, there may be certain lock-in periods or restrictions on the transfer of shares.
For instance, in certain sensitive sectors such as defense, telecom, or aviation, there might be prescribed lock-in periods for foreign shareholdings.

R-in-llc-1-40
Is a Resident Shareholders required for incorporation of Foreign-funded Limited Liability Company in India?

There should be at least two members for a private limited company.
The NRIs and foreign nationals can have the shareholding in an Indian company, subject to the FDI guidelines in India.
Since RBI allows 100% FDI in various sectors under the automatic route in India, obtaining ownership of shares in an Indian company by an NRI and foreign national is simple.

R-in-llc-1-50
Is a Resident Director required for incorporation of Foreign-funded Limited Liability Company in India?

According to the Companies Act, 2013, and the Foreign Direct Investment (FDI) policy of India, every company must have at least one director who is a resident in India.
A private limited company is required to have at least 2 directors and at least one Resident Director is required.

R-in-llc-1-60
Is there a company secretary required for incorporation of Foreign-funded Limited Liability Company in India?

Yes, for the incorporation of a Foreign-funded Limited Liability Company (LLC) in India, the appointment of a company secretary is mandatory.
According to the Companies Act, 2013, and the rules and regulations prescribed by the Ministry of Corporate Affairs (MCA), every company, including foreign-funded LLCs, must have a company secretary.

R-in-llc-1-70
What are the qualifications of a legal representative in India Foreign-funded Limited Liability?
Can a foreigner act as a legal representative?
If yes, he/she need a place of residence in India?

1. Legal Capacity: The corporate representative should have the legal capacity to act on behalf of the company. This means they should be of a sound mind, not disqualified by law, and capable of entering binding contracts.
2. Authority and Authorization: The corporate representative must be authorized by the company to act on its behalf. This authorization can be granted through legal agreements, power of attorney documents, board resolutions, or other internal documents.
3. Knowledge and Expertise: The corporate representative should possess the necessary knowledge, skills, and expertise related to the specific tasks and responsibilities they are expected to fulfill. This may vary based on the nature of the representation, such as legal, financial, operational, or other specialized areas.
4. Fiduciary Duty: The corporate representative has a fiduciary duty to act in the best interests of the company and its stakeholders. They should exercise due diligence, honesty, and loyalty in carrying out their responsibilities.
   Yes, a foreigner can act as a corporate representative in India.
   It is generally advisable for them to have a place of residence in India.

R-in-llc-1-80
Is it possible to establish a India foreign-owned company through an offshore company as holding company?

Yes, it is possible to establish an India foreign-owned company using an offshore company as a holding company.
This structure is commonly known as an “offshore holding company structure” or “holding company subsidiary structure.”

R-in-llc-1-90
What are the special features of India wholly foreign-owned limited liability corporation (LLC)?

1. Full Foreign Ownership: A wholly foreign-owned LLC allows complete foreign ownership, wherein the entire shareholding of the company is held by foreign investors or a foreign parent company. This structure provides foreign investors with full control and ownership of the Indian entity.
2. Limited Liability: As an LLC, the liability of the foreign investors or the parent company is limited to their respective shareholdings or the extent of their investment in the Indian company. This means that the personal assets of the investors or parent company are generally protected from the liabilities of the Indian entity.
3. Independent Legal Entity: A wholly foreign-owned LLC is considered a separate legal entity distinct from its foreign parent company. It can enter into contracts, acquire assets, sue or be sued, and conduct business operations in its own name.
4. Compliance with Indian Laws: Despite being wholly foreign-owned, the LLC is required to comply with Indian laws, regulations, and governance requirements. It must adhere to Indian corporate law, tax obligations, foreign investment regulations, and any industry-specific regulations applicable to its business activities.
5. Ease of Operations: Setting up a wholly foreign-owned LLC in India can provide foreign investors with a relatively straightforward process for conducting business operations in the country. It allows for direct control and decision-making by the foreign investors, facilitating efficient management of the Indian entity.

R-in-llc-2
India Foreign investment: permitted industries, restricted industries (licensed industries) and prohibited industries.
R-in-llc-2-10
Are India foreign-investment industries and products be listed in a positive or negative list?
Or are there different approaches for foreign investment from different countries?

In India, foreign investment is regulated by the Foreign Direct Investment (FDI) policy, which is formulated by the Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry.
The FDI policy classifies industries and sectors into different categories based on the level of foreign investment allowed.
The classification is based on a “positive list” approach, which means that sectors and industries are listed where foreign investment is permitted up to certain limits or subject to certain conditions.
There are different approaches for foreign investment from different countries in India.
While the FDI policy provides a general framework for foreign investment, specific guidelines and conditions may vary based on the country of origin or bilateral agreements between India and the respective country.

R-in-llc-2-20
In the positive list, what are the industries that foreign investment is allowed to invest in, which are the industries that are restricted for foreign investment (licensed industries), and the industries that are prohibited to invest in by foreign investment?
Will the positive list be different for different countries?

1. Industries with Automatic Route: These are sectors where foreign investment is allowed under the automatic route, which means no prior approval is required from the government. Foreign investors can invest in these sectors within specified equity limits or conditions. Examples include sectors like information technology, renewable energy, manufacturing, construction, e-commerce (subject to certain conditions), education, and healthcare services.
2. Restricted Industries (Licensed Industries): Certain sectors are subject to restrictions, and prior government approval is required for foreign investment. These industries often require licenses or permits to operate. Examples include defense, broadcasting, telecommunications, banking, insurance, retail trading (beyond specific limits), and pharmaceuticals.
3. Prohibited Industries: Some industries are prohibited for foreign investment due to strategic or security concerns. These include sectors such as atomic energy, lottery, gambling, chit funds, and certain types of agricultural activities.
   There might be variations in the positive list for different countries based on bilateral investment agreements, free trade agreements, or specific preferences granted to certain countries.
   

   Submit

   https://www.investindia.gov.in/foreign-direct-investment

R-in-llc-2-30
In the negative list, what are the industries that foreign investment is allowed to invest in, the industries that are restricted to foreign investment (licensed industries), and the industries that are not allowed to invest in foreign investment?
Will the negative list be different for different countries?

India does not have a specific “negative list” for foreign investment.

R-in-llc-2-40
What are the restriction on foreign investment in India? For instance, what is the minimum share capital amount?
What are the rules for foreign shareholding ratio? Other?
Are they different for different countries?

1. Minimum Share Capital: The FDI policy in India does not set a specific minimum share capital requirement for foreign investment. The capital requirement may vary based on the nature of the business, industry-specific regulations, and other factors. However, it is important to note that the company’s share capital must be in compliance with the Companies Act, 2013, which governs company formation and capital requirements in India.
2. Foreign Shareholding Ratio: The FDI policy sets specific guidelines for foreign shareholding ratios in various sectors. The permitted foreign shareholding limits can vary depending on the sector, industry, and nature of the business. Some sectors may have sectoral caps on foreign shareholding, while others may allow 100% foreign ownership under the automatic route or subject to government approval.
3. Sector-Specific Regulations: Certain sectors, such as defense, broadcasting, telecommunications, banking, insurance, retail trading, and pharmaceuticals, have specific regulations and restrictions on foreign investment. These regulations may include equity caps, prior government approval requirements, and compliance with sector-specific guidelines.
4. Government Approval: In certain sectors or cases where the FDI policy requires prior government approval, foreign investment proposals need to be submitted to the relevant authorities for consideration. The approval process involves assessment based on factors such as national security, economic impact, and compliance with sector-specific regulations.
   FDI policy applies uniformly to all foreign investors, there may be variations in the extent of restrictions, conditions, or specific regulations based on bilateral investment agreements or free trade agreements signed between countries.
   
   Submit
   https://static.investindia.gov.in/2020-10/FDI-PolicyCircular-2020.pdf

R-in-llc-2-50
What are the licensed industries in India?
What is the difference between the industries that allow foreign investment, the industries that restrict foreign investment (licensed industries), and the industries that do not allow foreign investment?

1. Defense: Foreign investment in the defense sector requires prior government approval and compliance with specific guidelines.
2. Broadcasting: Broadcasting and cable services, including direct-to-home (DTH) and FM radio, require licensing and have specific foreign investment restrictions.
3. Telecommunications: Telecommunications services, including telecom infrastructure, internet service providers, and mobile services, have certain licensing requirements and foreign investment restrictions.
4. Banking and Insurance: Foreign investment in the banking and insurance sectors is subject to specific regulations and requires prior approval from regulatory authorities.
5. Pharmaceuticals: Foreign investment in the pharmaceutical sector is regulated and requires compliance with specific guidelines, including approval from the Foreign Investment Promotion Board (FIPB) or other relevant authorities.

The difference between industries that allow foreign investment, industries that restrict foreign investment (licensed industries), and industries that do not allow foreign investment is as follows:

1. Industries Allowing Foreign Investment: These are sectors where foreign investment is allowed under the automatic route, subject to certain conditions, such as equity caps or compliance with sectoral guidelines. Foreign investors can invest in these sectors without requiring prior approval, but they still need to comply with sector-specific regulations and guidelines.
2. Licensed Industries: These are sectors that require prior government approval or licensing for foreign investment. Foreign investors need to obtain specific approvals or licenses to participate in these industries. The government reviews foreign investment proposals in licensed industries based on factors such as national security, economic impact, and compliance with sector-specific regulations.
3. Prohibited Industries: Some industries are prohibited from foreign investment due to strategic, security, or other reasons. Foreign investment is not allowed in these sectors.

R-in-llc-3
India-Foreign-funded Limited Liability Company document certification.
R-in-llc-3-10
What are the relevant investment documents required to establish a Foreign-funded Limited Liability Company in India?
Are there different documents for different countries?

1. Memorandum and Articles of Association (MOA and AOA): These documents outline the company’s objectives, rules, and regulations, including the nature of business, shareholding structure, and internal governance.
2. Proof of Identity: Foreign investors are required to provide proof of identity, such as passport copies or identification documents of the individuals or entities involved in the investment.
3. Proof of Address: Documents demonstrating the registered address of the foreign investor, such as utility bills or lease agreements, may be required.
4. Board Resolution: A resolution from the foreign investor’s board of directors or governing body approving the investment in the Indian LLC is typically required.
5. Power of Attorney: If the foreign investor appoints a representative in India to act on their behalf during the incorporation process, a Power of Attorney document granting the representative authority is necessary.
6. Shareholder Agreement: In the case of multiple foreign investors, a shareholder agreement may be required to outline the rights and responsibilities of each investor.
7. Foreign Inward Remittance Certificate (FIRC): This document is issued by the authorized bank and certifies that the inward remittance of funds has been received from the foreign investor.
   Specific documentation requirements may vary based on the nature of the investment, the country of origin of the foreign investor, and any bilateral investment agreements or treaties between the countries involved.

R-in-llc-3-20
What are the procedures for the certification of documents related to the investment of Foreign-funded Limited Liability Company in India?
Are there different document authentication procedures for different countries?

1. Notarization: The documents need to be notarized by a notary public in the home country of the foreign investor. This involves the notary verifying the authenticity of the document and the signature of the signatory.
2. Apostille or Consular Attestation: Depending on the country of origin of the investor, the notarized documents may need to undergo apostille or consular attestation. Apostille is a simplified form of authentication used for countries that are party to the Hague Apostille Convention. Consular attestation involves getting the documents attested by the consulate or embassy of the investor’s home country in India.
3. Translation: If the documents are in a language other than English, they may need to be translated into English by a certified translator. The translated documents should be notarized as well.
4. Indian Consulate Attestation: Once the documents have been notarized, apostilled, or consularly attested, as applicable, they may need to be further attested by the Indian Consulate or Embassy in the home country of the investor. This step is typically required to authenticate the documents for use in India.
   The specific document authentication procedures can vary depending on the country of origin and the requirements of the Indian authorities.

R-in-llc-4 India – Bank Account Opening of Foreign Subsidiaries
R-in-llc -4-10
What is the sequence steps of set up a Foreign-funded Limited Liability Company in India with share capital paid in place and opening a bank account? Which one should come first?

1. Payment of Share Capital: Once the LLC is incorporated, the share capital can be paid by the foreign investors as per the agreed terms. The funds can be transferred from the foreign investors’ bank accounts to the Indian bank account of the LLC.
2. Obtaining the Certificate of Capital Import: After the share capital is paid, the LLC can apply for the Certificate of Capital Import from an authorized bank in India. This certificate certifies the inflow of foreign capital into the company.
3. Opening a Bank Account: With the Certificate of Capital Import in hand, the LLC can proceed to open a bank account in India. The bank account can be opened with any authorized bank in India, and the necessary documents, including the Certificate of Incorporation, MOA and AOA, and identification documents, will be required.

R-in-llc-4-20
What are the usual KYC regulations when opening a bank account with a Foreign-funded Limited Liability Company in India?

1. Company Documents: The LLC is required to provide the following company documents:
   • Certificate of Incorporation or Registration
   • Memorandum and Articles of Association (MOA and AOA)
   • PAN (Permanent Account Number) Card of the Company
   • GST (Goods and Services Tax) Registration Certificate (if applicable)
   • Board Resolution authorizing the opening of a bank account.
2. Authorized Signatories: The bank will require identification documents and KYC information of the authorized signatories who are authorized to operate the bank account on behalf of the LLC. This may include:
   • Passport or other identification documents
   • Address proof documents, such as utility bills or bank statements
   • PAN Card or Aadhaar Card (if applicable)
3. Proof of Address: The LLC needs to provide proof of its registered office address in India. This can be in the form of utility bills, lease agreement, or any other valid document establishing the address.
4. Foreign Inward Remittance Certificate (FIRC): The FIRC certifies the inflow of foreign capital into the company. It may be required as part of the KYC process to evidence the source of funds.
5. Other Documents: Depending on the bank’s requirements and the specific circumstances, additional documents such as the company’s Business Plan, Bank Reference Letters, or the Power of Attorney (if applicable) may be requested.

R-in-llc-4-30
Will the bank require a India local director when opening a bank account for a India wholly foreign-owned limited liability company (LLC)?

Some banks in India may have their own internal policies that require the presence of a local resident director or a representative for certain types of accounts or transactions.
These policies aim to ensure compliance with local regulations and enhance due diligence.

R-in-llc-4-40
Will the bank require foreign legal representative have to be physically present for the bank interview, when opening a bank account with a Foreign-funded Limited Liability Company in India?

The bank may require the foreign legal representative or authorized signatory to be physically present for the bank interview when opening a bank account with a Foreign-funded Limited Liability Company (LLC) in India.
The purpose of the bank interview is to verify the identity and credentials of the representative and to ensure compliance with KYC (Know Your Customer) regulations.

R-in-llc-5 India – Staff Work Permit, Visa, and Residence
R-in-llc-5-10
Can a Foreign-funded Limited Liability Company in India send expatriates to India as the Investor’s role?
What are the application requirements, documents and procedures for the work permit, visa, and residence permit?
Are there differences in different countries?

Can.

1. Work Permit: A business visa (‘B’ Visa) for foreign nationals who wish to visit India to establish industrial/ business venture or to explore possibilities to set up industrial/ business venture in India. This typically involves the company sponsoring the expatriate and applying for the appropriate work permit category, such as an Employment Visa or an Employment Authorization Document (EAD).
2. Visa: The expatriate will need to apply for a business visa. The company may need to provide supporting documents, such as a valid travel document and a re-entry permit, proof of financial standing and expertise in the field of intended business.
3. Residence Permit: Once the expatriate arrives in India, they may need to apply for a residence permit or a residential visa extension depending on the duration of their stay. This may require submitting additional documents such as a rental agreement, proof of address, and medical clearance.
   Specific requirements and procedures for work permits, visas, and residence permits can vary among different countries.
   

   Submit

   https://www.mha.gov.in/sites/default/files/work_visa_faq.pdf

R-in-llc-5-20
Can a Foreign-funded Limited Liability Company in India send expatriates to India as the employee role?
What are the application requirements, documents and procedures for the work permit, visa, and residence permit?
Are there differences for different countries?

Can.

1. Work Permit: The LLC would need to obtain a Employment Visa (‘A’ Visa) for the expatriate to work in India. This typically involves the company sponsoring the expatriate and applying for the appropriate work permit category, such as an Employment Visa or an Employment Authorization Document (EAD).
2. Visa: The expatriate would need to apply for a Employment Visa based on the purpose of their visit and intended duration of stay in India. This may include applying for an Employment Visa or a Business Visa. The company would usually provide supporting documents such as an offer letter, employment contract, and proof of financial capacity.
3. Residence Permit: Once the expatriate arrives in India, they may need to apply for a residence permit or a residential visa extension depending on the duration of their stay. This may require submitting additional documents such as a rental agreement, proof of address, and medical clearance.
   Specific requirements and procedures for work permits, visas, and residence permits can vary among different countries.
   

   Submit

   https://www.mha.gov.in/sites/default/files/work_visa_faq.pdf

R-in-llc-5-30
What are the evaluation factors or requirements for a Foreign-funded Limited Liability Company in India when applying work permit, visa, and residence permit?
What is the relationship with the salary, capital, and turnover of Foreign-funded Limited Liability Company?
Are there differences for different countries?

1. Job Role and Qualifications: The expatriate’s job role, qualifications, and experience are typically assessed to ensure that the position cannot be filled by a suitable Indian candidate. The company may need to provide evidence that the expatriate possesses specialized skills or expertise that are necessary for the role.
2. Salary and Compensation: The salary and compensation package offered to the expatriate may be evaluated to ensure that it meets or exceeds the prevailing standards in India for similar roles. The company may be required to provide proof of the salary offered, such as employment contracts or salary statements.
3. Capital Investment: The capital investment of the Foreign-funded LLC may be taken into consideration to assess the financial standing and commitment of the company. This can include the initial capital infusion into the company or ongoing capital investments.
4. Turnover and Financial Viability: The turnover and financial viability of the Foreign-funded LLC may be assessed to determine its ability to sustain the employment of expatriates and comply with financial obligations. This can involve reviewing financial statements and other relevant documents.
5. Economic Impact: The potential economic impact of the expatriate’s employment on the Indian economy may be evaluated. This can include factors such as job creation, technology transfer, and contribution to the local economy.
   The Indian government’s immigration policies and regulations may consider these factors differently for expatriates from different countries.

R-in-llc-6
India- Registered Address and Operating Address of Foreign-funded Limited Liability Company in India.
R-in-llc- 6-10
What are the regulations on the registered address during the company registration and future operating address of a Foreign-funded Limited Liability Company in India?

Registered Address:

1. Requirement: A company is required to have a registered office within 30 days of its incorporation and the office must be maintained at all times thereafter.
   Within this period, the company must send a notice of the location of its office, along with any other prescribed documents of the premises, to the Registrar of Companies’ to vertify its incorporation.
   A change of the registered office outside the local limits of any city, town or village where the office is situated will require the authority of a special resolution passed by the company.
2. Proof of Address: The company needs to provide documentary proof of the registered address, such as a lease agreement, rent receipt, or utility bill. The proof should establish the legal right of the company to use the premises as its registered office.
3. Verification: The registered address may be subject to verification by the authorities during the registration process. They may conduct physical inspections or request additional documents to verify the authenticity of the address.
   Future Operating Address:
4. Flexibility: While the registered address is fixed and must be provided during registration, the operating address can be different. The operating address is the location where the company carries out its business activities, such as its office, factory, or other operational facilities.
5. Reporting: Any changes to the operating address must be reported to the relevant authorities within a specified timeframe. This ensures that the authorities have up-to-date information about the company’s location and can communicate with the company effectively.

R-in-llc-6-20
What are the specific regulations or requirements of a registered office address for a permitted industry of an LLC in India?

1. Physical Presence: The registered office must have a physical presence in India. It can be leased or owned premises, but it must be a physical location where the company can receive official correspondence and notices.
2. Documentation: The company needs to provide documentary proof of the registered office address, such as a lease agreement, rent receipt, or utility bill. The documents should establish the legal right of the company to use the premises as its registered office.
3. Accessibility: The registered office should be accessible to the public and government authorities during working hours. It should be a place where official documents, registers, and records can be maintained and made available for inspection.
4. Compliance with Local Laws: The registered office address should comply with local laws and regulations, including zoning and building regulations applicable to the specific location.
5. Reporting Changes: Any change in the registered office address must be promptly reported to the Registrar of Companies (RoC) and updated in the company’s records.
   Specific industries may have additional requirements or regulations based on sector-specific laws and regulations.

R-in-llc-7
Amount of investment, registered capital, and government fees for Foreign-funded Limited Liability Company in India.
R-in-llc-7-10
Are there any regulations on authorized share capital, registered share capital and paid-up share capital of a Foreign-funded Limited Liability Company in India?
Is there any requirement for minimum funds to be in place within a certain period?

Authorized Share Capital:
• Authorized share capital refers to the maximum value of shares that a company is authorized to issue to its shareholders.
• The authorized share capital is mentioned in the company’s Memorandum of Association (MoA) and represents the total value of shares that the company is permitted to issue over its lifetime.
• The authorized share capital can be increased or decreased by following the prescribed procedures and obtaining necessary approvals from the authorities.
Registered Share Capital:
• Registered share capital, also known as nominal share capital, is the amount of share capital that is mentioned in the company’s MoA during its registration.
• The registered share capital represents the initial amount of capital with which the company is incorporated.
Paid-up Share Capital:
• Paid-up share capital refers to the portion of the authorized share capital that has been paid for by the shareholders and received by the company.
• It represents the actual funds contributed by the shareholders towards the company’s share capital.
• The paid-up share capital may be less than or equal to the registered share capital, depending on the contributions made by the shareholders.
Minimum Capital Requirement:
• As per the Companies Act, 2013 in India, there is no minimum capital requirement for LLCs. The minimum capital requirement was removed, and companies can be incorporated with any amount of capital.

R-in-llc-7-20
What is the relation between government fees with authorized share capital, registered share capital, and paid-up share capital of a Foreign-funded Limited Liability Company in India?

Government fees for incorporating an LLC in India may be influenced by the authorized share capital.
In some cases, the registration fees or stamp duty charges may increase as the authorized share capital increases.
The exact fee structure and the relation with the authorized share capital may differ depending on the state in India where the company is being incorporate.
The registered share capital and paid-up share capital, which is mentioned in the company’s Memorandum of Association (MoA) during registration, does not directly impact government fees.

R-in-llc–8
Application of Certificate Number for a Foreign-funded Limited Liability Company in India
R-in-llc-8-10
What are the company certificate numbers needed to apply with the relevant legal entities for a foreign-funded Limited Liability Company in India?

1. Certificate of Incorporation: This is the certificate issued by the Registrar of Companies (RoC) upon the registration of the company. It contains important details such as the company’s name, registration number, date of incorporation, and registered office address. The Certificate of Incorporation serves as proof of the company’s legal existence.
2. Permanent Account Number (PAN): PAN is a unique identification number assigned to the company by the Income Tax Department. It is required for various tax-related purposes, such as filing tax returns and conducting financial transactions.
3. Tax Deduction and Collection Account Number (TAN): TAN is an alphanumeric code assigned to the company for deducting and collecting taxes at source. It is required for compliance with tax deduction and collection regulations.
4. Goods and Services Tax Identification Number (GSTIN): If the company is engaged in the sale of goods or services, it may need to obtain a GSTIN. GSTIN is a unique identification number for Goods and Services Tax (GST) purposes.

R-in-llc-8-20
What are the certificate application for the Foreign-funded Limited Liability Company in India as a tax entity?

1. Permanent Account Number (PAN): The LLC needs to apply for a PAN from the Income Tax Department. PAN is a unique identification number used for various tax-related purposes, including filing tax returns, opening bank accounts, and conducting financial transactions.
2. Tax Deduction and Collection Account Number (TAN): If the LLC is required to deduct or collect taxes at source, it needs to apply for a TAN. TAN is a unique alphanumeric code used for compliance with tax deduction and collection regulations.
3. Goods and Services Tax Identification Number (GSTIN): If the LLC is engaged in the sale of goods or services in India, it needs to register for GST and obtain a GSTIN. GSTIN is a unique identification number used for compliance with Goods and Services Tax (GST) regulations.
4. Tax Residency Certificate (TRC): If the LLC wishes to claim benefits under a tax treaty between India and another country, it may apply for a TRC. The TRC certifies the tax residency status of the LLC in its home country.

R-in-llc-8-30
What are the certificate application for Foreign-funded Limited Liability Company in India in relation to withholding tax on salary and employee benefits?

1. Tax Deduction and Collection Account Number (TAN): TAN is required for deducting and remitting taxes on salaries and other employee benefits. The LLC needs to apply for a TAN and use it for withholding taxes from employee salaries.
2. Tax Residency Certificate (TRC): TRC is a certificate that establishes the tax residency status of the LLC in its home country. It may be required to avail the benefits of a tax treaty between India and the home country of the LLC. TRC helps in claiming tax benefits, such as reduced withholding tax rates, if applicable.
3. Form 15CA and Form 15CB: These forms are used for reporting and certifying foreign remittances. If the LLC is making any payments to non-resident employees or service providers, it may need to submit Form 15CA (declaration) and Form 15CB (certificate from a chartered accountant) to the tax authorities.
4. Form 16 and Form 16A: These forms are related to the issuance of salary and other income certificates. The LLC is required to issue Form 16 to its employees, which provides details of the salary and tax deducted at source (TDS). Form 16A is issued for other payments subject to TDS.

R-in-llc-8-40
What are the other independent certificate numbers or application, or declaration related to the government’s jurisdiction for Foreign-funded Limited Liability Company in India?

1. Import-Export Code (IEC): If the LLC is involved in importing or exporting goods in India, it may need to obtain an Import-Export Code (IEC). This code is issued by the Directorate General of Foreign Trade (DGFT) and is required for customs clearance and international trade transactions.
2. Environmental Clearances: Depending on the nature of the LLC’s business activities, it may require environmental clearances or approvals from the relevant authorities. This is especially applicable to industries that have potential environmental impacts.
3. Industrial Licenses and Approvals: Certain industries in India require specific licenses or approvals from regulatory bodies or government departments. For example, industries such as telecommunications, pharmaceuticals, defense, and aviation may require sector-specific licenses or approvals.
4. Certificates for Specialized Activities: Depending on the business operations, the LLC may need to obtain specialized certificates or approvals. This can include certifications related to food safety, quality standards, intellectual property, data protection, or specific industry certifications.
5. Declarations for Statutory Compliance: The LLC may need to submit various declarations or forms to comply with statutory requirements. These could include declarations related to labor laws, environmental regulations, tax compliance, and other legal obligations.

R-in-llc-8-50
To summarize: Which of the following certificate numbers do Foreign-funded Limited Liability Company in India need to apply for?
National (federal) company certificate number, provincial (state) company certificate number, national (federal) tax certificate number, provincial (state) tax certificate number, national value-added tax certificate number, provincial (state) value-added tax certificate number, social insurance card number, medical insurance card number, pension certificate number, other funds such as housing fund certificate number, labor union certificate number, import and export certificate number, and franchise industry certificate number.

1. National (federal) company certificate number: This would typically be the certificate of incorporation or registration issued by the Ministry of Corporate Affairs at the national level.
2. Provincial (state) company certificate number: This would be the certificate of incorporation or registration issued by the respective state’s Registrar of Companies.
3. National (federal) tax certificate number: This refers to the Permanent Account Number (PAN) issued by the Income Tax Department at the national level.
4. Provincial (state) tax certificate number: This could be the state-level tax registration number, such as the State Goods and Services Tax (GST) Registration Number.
5. National value-added tax certificate number: GST is registered at state-level.
6. Provincial (state) value-added tax certificate number: This would be the state-level GSTIN obtained for compliance with state-level goods and services tax regulations.
7. Social insurance card number: This refers to the unique identification number issued to employees for social insurance contributions, such as the Employee Provident Fund (EPF) number.
8. Medical insurance card number: This would be the identification number associated with the company’s medical insurance coverage for employees.
9. Pension certificate number: This could be the unique identification number related to the company’s pension scheme for employees.
10. Other funds such as housing fund certificate number: This would depend on the specific funds or schemes applicable to the company, such as the Employee State Insurance (ESI) scheme or housing fund contributions.
11. Labor union certificate number: This would be applicable if the company is registered with a labor union or trade association.
12. Import and export certificate number: This refers to the Import-Export Code (IEC) issued by the Directorate General of Foreign Trade (DGFT) for import and export operations.
13. Franchise industry certificate number: This would be relevant if the company is operating in a franchise industry subject to specific licensing or regulatory requirements.

R-in-llc-9
Incorporation procedures of India-Foreign-funded Limited Liability Company and key matters
R-in-llc-9-10
What are the procedures of setting up a Foreign-funded Limited Liability Company in India? Documents required? Competent Government unit? Websites?

1. Obtain Digital Signature Certificate (DSC): The first step is to obtain a DSC for the proposed directors or authorized representatives of the company. This is required for online filing of documents.
2. Obtain Director Identification Number (DIN): Each proposed director of the LLC needs to obtain a DIN from the Ministry of Corporate Affairs (MCA). This can be done by filing an online application.
3. Name Reservation: Choose a unique name for the company and submit an online application for name reservation with the MCA. The name should comply with the naming guidelines and should not be identical or similar to existing company names.
4. Prepare Incorporation Documents: Prepare the necessary incorporation documents, including the Memorandum of Association (MOA) and Articles of Association (AOA). These documents outline the company’s objectives, rules, and regulations.
5. File Incorporation Application: Submit the incorporation application, along with the required documents and fees, to the Registrar of Companies (ROC) through the MCA’s online portal.
6. Obtain Certificate of Incorporation: If the ROC is satisfied with the application, they will issue a Certificate of Incorporation, officially establishing the LLC as a legal entity.
7. Obtain Permanent Account Number (PAN): Apply for a PAN with the Income Tax Department. PAN is necessary for tax-related purposes.
8. Register for Goods and Services Tax (GST): Depending on the nature of the business, the LLC may need to register for GST with the relevant tax authorities.
9. Register for other applicable licenses: Depending on the industry and activities of the LLC, additional licenses or registrations may be required from the respective government departments or regulatory authorities.
   The competent government unit for company incorporation and registration in India is the Ministry of Corporate Affairs (MCA).
   The MCA has an online portal called “MCA21” through which various company-related filings and registrations can be done.
   For detailed information, the official website of the Ministry of Corporate Affairs (MCA) can be accessed at www.mca.gov.in.
   The website provides guidance, forms, rules, and other resources related to company incorporation and compliance in India.

R-in-llc-9-20
What are key consideration matters of when deciding to set up foreign-funded limited liability company in India?

1. Market Potential: Assess the market potential and demand for your products or services in India. Consider factors such as target market size, growth prospects, competition, and regulatory environment.
2. Legal and Regulatory Framework: Understand the legal and regulatory framework governing foreign investment and company formation in India. Research the applicable laws, regulations, and policies to ensure compliance and understand the obligations and rights of foreign investors.
3. Investment Policy: Review the Indian government’s investment policy, including any sector-specific policies or incentives that may apply to your industry. Consider the ease of doing business, investment protection, and repatriation of profits.
4. Business Structure: Evaluate the most suitable business structure for your operations in India. The LLC structure provides limited liability protection and flexibility in management.
5. Capital Requirements: Determine the required capital investment for setting up the LLC and ensure adequate funding for the initial setup and future operations.
6. Market Entry Strategy: Develop a market entry strategy that aligns with your business goals and objectives. Consider factors such as distribution channels, sales and marketing strategies, and partnerships or collaborations with local entities.
7. Intellectual Property Protection: Assess the intellectual property protection regime in India and consider measures to safeguard your intellectual property rights.
8. Taxation and Financial Considerations: Understand the tax implications and financial considerations of operating in India. Consult with tax professionals to understand the applicable taxes, incentives, and reporting requirements.
9. Human Resources: Consider the availability of skilled talent in India, labor laws, and regulations related to employment, and any specific requirements for expatriate employees.
10. Cultural and Language Factors: Consider the cultural and language differences when entering the Indian market. Consider local customs, business practices, and the need for localization in marketing and operations.

Contact Us

New Delhi Evershine BPO Service Limited Corp.
Email: bom4ww@evershinecpa.com
A-16, 1st Floor, Aruna Asaf Ali Marg, Qutub Institutional Area, New Delhi, 110067, India
Deputy Manager Henry Ko  ,  USA Oregon University Bachelor ,speak  in fluent  English. Skype: henryko
or
For investment structure relevant to multi-national tax planning and Financial & Legal Due Diligence for M&A (Merge and Acquisition), send an email to HQ4del@evershinecpa.com
Dale Chen, Principal Partner/CPA in Taiwan+China+UK will be accountable for your case.
Email address:dalechen@evershinecpa.com
Linkedin address: Dale Chen

Additional Information

Evershine has 100% affiliates in the following cities:
Headquarter, Taipei, Xiamen, Beijing, Shanghai,
New York, San Francisco, Houston, Phoenix
Tokyo, Seoul, Hanoi, Ho Chi Minh, Bangkok,
Singapore, Kuala Lumpur, Manila, Dubai,
New Delhi, Mumbai, Dhaka, Jakarta,
Frankfurt, Paris, London, Amsterdam,
Milan, Barcelona, Bucharest,
Melbourne, Sydney, Toronto

Other cities with existent clients:
Miami, Atlanta, Oklahoma, Michigan, Seattle, Delaware;
Berlin, Stuttgart; Prague; Czech Republic; Bangalore; Surabaya;
Kaohsiung, Hong Kong, Shenzhen, Donguan, Guangzhou, Qingyuan, Yongkang, Hangzhou, Suzhou, Kunshan, Nanjing, Chongqing, Xuchang, Qingdao, Tianjin.

Evershine Potential Serviceable City (2 months preparatory period):
Evershine CPAs Firm is an IAPA member firm headquartered in London, with 300 member offices worldwide and approximately 10,000 employees.
Evershine CPAs Firm is a LEA member headquartered in Chicago, USA, it has 600 member offices worldwide and employs approximately 28,000 people.
Besides, Evershine is Taiwan local Partner of ADP Streamline ®.
(version: 2022/03)

Please send email to HQ4del@evershinecpa.com

More Cities and More Services please click  Sitemap