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Foreign Subsidiary refers to a business that is located in a country other than the parent company. A subsidiary company is controlled by its parent or holding company. The parent company may be the majority shareholder of the subsidiary company or it has a greater representation on its board of directors. The foreign subsidiary organizations are obligatorily required to keep up consistency according to the Income Tax Act, Companies Act, exchange evaluating rules and FEMA rules. Thus, keeping up consistency for an outside auxiliary organization would incorporate documenting of wage expense form with the Income Tax Department, yearly come back with the Ministry of Corporate Affairs and different filings with specialists like Reserve Bank of India or Securities and Exchange Board of India (SEBI). At long last, similar to all organizations, outside auxiliaries would likewise need to follow other Indian duty directions like TDS controls, GST controls, VAT/CST directions, Service Tax controls, ESI directions and others. The consistence prerequisite for an outside backup organization would differ in view of the business, condition of fuse, number of workers and deals turnover.

foreign subsidiary

Benefits of Foreign Subsidiary

Here are some advantages of Foreign Subsidiary are like;

  1. Presence Abroad
  2. Lesser Investment
  3. Decreased Costs
  4. Limited liability

Reasons to Establish a Foreign Subsidiary

These are some reasons behind to establish a Foreign Subsidiary.

  1. Opening up access to new markets for products and services.
  2. Enhance Brand Recognition.
  3. More Cost-Effective Production and Manufacturing.
  4. Access to technical skills / regional knowledge.
  5. Customer Service Centers.
  6. Part of a Global Expansion Plan.
  7. Use of Free Trade.
  8. Participating in Local Economic Opportunities.

Procedure of Foreign Company Registration in India

There are some steps mentioned in the process of the registration of Foreign Company:

  1. Obtaining DSC and DIN.
  2. Name Approval is also essential.
  3. Incorporation Application.

Documents Required for Incorporation

These are the essential documents which are mandatory for Foreign Subsidiary.

  1. Certificate of incorporation of the parent company.
  2. An extract from the Registrar of Companies that shows the current registered address and directors of the parent company.
  3. A corporate resolution authorizing a specific individual to sign necessary subsidiary documents on behalf of the parent company.
  4. Passport particulars and residential address details of individuals who will act as directors of the Singapore subsidiary company.
  5. Signed Consent to Act as Director by each proposed director.
  6. Registered address details of the Singapore subsidiary company.
  7. Memorandum & Articles of Association for the Singapore subsidiary company.

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