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Foreign Company (F)

Foreign companies

In India, a foreign company is mandatory to follow certain special provisions as compared to a domestic company. For instance, a foreign company at the time of making investment in India or setting up an office is required to comply with the Foreign Exchange Management Act (FEMA). Similarly, if the foreign company is involved in selling of goods or providing services then it is required to comply with the Indian tax laws.

A ‘foreign company’ is an entity which is incorporated outside India, but has a place of business in India or conducts any business activity in India in any other manner. The accurate definition of foreign company is given under the Companies Act, 2013.

Having an established entity to run a compliant payroll and make all required tax and statutory withholdings

Eliminating the need to pay either local or expat workers remotely

Avoiding immigration problems with overuse of business visas, since the local entity will be in a position to secure valid work permits

Cost of establishing and termination of an entity

Compliance risk

Business practices and cultural barriers

Managing international employees – HR and payroll obligations

Certified copy of the charter, statutes, or memorandum and articles of the company or other instrument constituting or defining the constitution of the company (Mandatory).

List of directors and secretary of the foreign company (Mandatory).

Power of attorney or board resolution in favor of the authorized representative(s) (Mandatory).

Reserve bank of India approval letter (It is mandatory to attach attested copy of such approval).

All about Foreign Companies.

Foreign Companies

The term ‘foreign company’ is clearly state that under Section 2 sub-section 42 of the Companies Act, 2013 (New Act). A foreign company is any company or body corporate incorporated outside India which,

  1. has a place of business in India whether by itself or through an agent, physically or through electronic mode; and
  2. conducts any business activity in India in any other manner.[4]

In order to be considered a ‘foreign company’, one has to fulfil both the abovementioned criteria. Hence, this new definition has a wider scope compared to the earlier Act.

Disadvantages of the Foreign Companies 

  • The expense and time required for setting up a full local company may not be worth it in a market with unknown potential
  • There is an increased risk of triggering “permanent establishment” and exposure to corporate tax liability
  • Some types of business entities may be limited in the scope of employee activity, undermining the very reason to set up a company in the first place

 

Basic

INR 1,500/-

One Time Fee

  • GST Registration
  • MSME Registration
  • Bank A/c.

Service Provide Within 7 Days

Standard

INR 11,999/-

One Time Fee

  • GST Registration
  • Shop & Establishment Registration
  • MSME Registration
  • Trade Mark Registration
  • Logo Design
  • Opening Bank A/c.

Service Provide Within 15 Days

Premium

INR 11,999/-

Yearly Fee

  • Yearly GST Compliances
  • Income Tax Return

Services Provided Before the Due Date

Frequently Asked Questions

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