Indian Subsidiary – Foreign Parent

Brief Introduction

  • There is a lot of interest among foreign companies to start their operations in India and tap into one of the largest and fast growing market, and have access to some of the best human resources in the world.
  • A Foreign National (other than a citizen of Pakistan or Bangladesh) or an entity incorporated outside India (other than entity incorporated in Pakistan or Bangladesh) can invest and own a Company in India by acquiring shares of the company, subject to the FDI Policy of India.
  • In addition, a minimum of one Indian Director who is an Indian Director and Indian Resident is required for incorporation of an Indian Company along with an address in India.

Benefits of an Indian Subsidiary of a Foreign Company

  • It is a Separate Legal Entity and enjoys wide legal capacity
  • It can own a property, incur debts, raise funds, etc.
  • Company is not affected by death or unsoundness, unlike humans. Thus, it is having an uninterrupted existence until it gets dissolved. It remains to live irrespective of changes in its membership
  • 100% Foreign Direct Investment (FDI) is allowed in many of the sectors through Company type business entity without any prior Government approval. FDI is not allowed in Proprietorship or Partnership, LLP requires prior Government approval.
  • Shares of the Company can easily be transferred to any other person.