What is Subsidy Company
A subsidiary company is the one whose majority of the shares are owned and controlled by another Company. The company that holds the majority of the shares are called the Holding Company or Parent Company. The subsidiary company is also called as the Sister Concern or Daughter Company.
Wholly owned and partly owned
There are two types of subsidiary companies; The first one is Wholly owned Subsidiary company, where the parent company holds 100% of the shares of the subsidiary company and Partly owned subsidiary company is the owe where the parent company holds the majority of the shares.
What is Foreign subsidiary company in India
A foreign subsidiary company is the one which is Incorporated in India and the majority of the shares are owned by a foreign company. The holding company should have its head quarters outside India. The Foreign Parent Company works as per the law of that foreign country and the Indian Subsidiary Company bound by the Indian Laws. Separate book of accounts to be maintained by the Subsidiary Company.
There are two ways of investment in India. The first one is Investment under automatic route and the second one is Investment under Government Approval. The automatic rough does not require any prior approval from RBI or GOI for investment on equity share in a Indian Company.
Requirements for Forming a Foreign Subsidiary Company in India
- Two directors
(One director must be an Indian National)
- ID Proof & Address Proof
- Indian National – Aadhar Card, Driving Licence, Voter ID etc
- Foreign National – Address Proof and ID proof to be attested by the Indian Consulate. If it is not in English, Translation
- PAN Card of the Indian Director
- Board of Director Resolution from the Foreign Company
- Apply for Name Approval
- Obtain Digital Signature
- Apply for DIN Number
- Submission of MOA & AOA
- Certification of Incorporation
- Post Registration
- Obtain a PAN Card
- Issue Share Certificate
- Filing of FCGPR
Foreign Direct Investment
In India, 100% FDI is allowed in many sectors. But however FDI is not allowed in the sectors like Agriculture, Real Estate, Chit fund etc.