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Subsidiary Company | Branch Office | Liaison Office | Holding Company

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India is labeled as an emerging economy with low labour costs and a population that makes business an extremely exciting proposition over here.

If you are a foreign company and are desirous of establishing a presence in India, then read on.

You can enter the market chiefly in three ways:

Start a Subsidiary Company | Branch Office | Liasion Office | Holding Company

  • Subsidiary: An entity formed under the Companies Act, 1956 which can either be private limited or public limited.
  • Branch Office: Companies involved in manufacturing or trading activities are allowed to set up a branch office with the prior approval of RBI.
  • Liaison Office: It is not allowed to undertake any business activities in India and can only perform liaison activities (act as a channel of communication between Head Office abroad and parties in India).[i]
  • Holding Company: A holding company is a company which in itself does not work like a company but mere owns the shares of other companies.

Subsidiary Company | Branch Office | Liasion Office | Holding Company: Registration Formalities

  • Subsidiary: Governed by the Companies Act, 1956 the registration formalities will be regulated by the Act and the relevant rules. To give a brief idea the requirements would include a minimum capital, minimum directors and shareholders etc.
  • Branch office: The activities that a branch office can undertake are specified in the master circular issued by the RBI. In order to set up a branch office FNC-1[ii] needs to be filled. This form requires information of the activities of the applicant, capital and value of goods imported etc.
  • Liaison office: There are specified activities that a liaison office can undertake as specified in the Master Circular No. 7/2012-13.The same FNC-1 form needs to be filled for setting up a liaison office.
  • Holding company: Fill-up the form on the right to get vakilsearch’s expert advice in how to set-up a Holding Company.

References:

[i] Master Circular on Establishment of Liaison / Branch / Project Offices in India by Foreign Entities: [Click Here]

[ii]Application for Establishment of Branch/ Liaison Office in India:  [Click Here]

The above mentioned points only provide a basic idea, dependent on the mode that you wish to choose one requires tax compliance, importer exporter code etc.

You can fill up the simple form on this page to learn more about setting up a Subsidiary Company, a Liaison Office, a Holding Company or a Branch Office!

Our team will send you an email instantly and follow that up with a 1-to-1 call, if required.