Foreign Company Registration in India

FOREIGN COMPANY REGISTRATION IN INDIA WITH GREENVISSAGE

Start Your Overseas Business in India with ease

Our executives are experienced professionals
who understand the challenges involved
in registration of overseas companies.

Overseas Companies

TYPES OF FOREIGN COMPANY REGISTRATION IN INDIA

INBOUND INVESTMENTS

The global flow of capital, investment and trade in fast changing world today requires businesses to respond quickly to meet international competition and to exploit emerging opportunities. When the multinationals look at business opportunities beyond the boundaries of their countries, they are faced with crucial question of structuring. It has to be structured properly to claim tax reliefs, minimise tax and avoid double taxation. So, it is very important for all the companies to understand the rules and regulations of overseas company registration and set up in India that are incorporated under the companies act 1956.Greenvissage helps you in all areas of the foreign company registration with a well-planned tax structures to make your process easier and comfortable

A substantial chunk of foreign direct investment has gone into IT and ITES industries. Most of the companies set up for IT services and BPOs enjoy a tax holiday under section 10A/10B. In order to claim these benefits, there are certain conditions attached to it and hence need to be planned accordingly. Our team of professional accountants help the investors to make up with foreign company registration in India throughout the guide and assist them to make the perfect plan accordingly.

Apart from structuring and tax incentives, the companies also need to be legally compliant. To garner full company satisfaction, we offer the key services of foreign company registration in India which make our organization a one-stop solution for all your inbound investment and legal service needs. With the professionals who are well aware about the regulatory approval process in different jurisdiction, we also provide assistance on entity and capital structuring for the inbound investments. Current exchange control regulations require an Indian company, which is not eligible to avail of the automatic route for accepting investments from foreign entities, to obtain approval of the Reserve Bank of India (“RBI”) every time it receives investments from overseas companies. However most of industry sectors are covered under automatic route and do not need approval from RBI. Certain set of compliances have to be done while accepting investments from overseas companies.

Global companies are facing increasing government scrutiny and complex reporting requirements. Hence awareness of local laws, regulations, taxes and practices is of paramount importance. We help companies in guiding them a structure which is tax optimum and legally compliant. Our services with regard inbound investments include following:

1.       Advise on approach to India entry.
2.       Advise on entity structure for optimal entry – whether branch office, liaison office, subsidiary, LLP, project office, etc.
3.       Advice on capital structure keeping in mind the taxation as well as foreign exchange policies to ensure optimum repatriation.
4.       Assistance in obtaining regulatory approvals from FIPB, RBI, etc. and also assisting in related compliances.
5.       Advise on tax implications, tax incentives, registration and licensing requirements, industry specific restrictions, etc.
6.       Advising to optimise repatriation.

Today every business needs leadership. We manage your business, while you are busy building it… leading it.

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OUTBOUND INVESTMENTS

Outbound investments also referred to as Overseas Direct Investments (ODI) is a natural progression for firms who seek for better business opportunities available abroad. Necessary development in most of the major and important sectors of commerce and economy, and liberal FDI policies of governments, in countries of all around the world, have opened the door to extensive investments (domestic as well as foreign direct investments) in diverse profitable and financially secure sectors. Outbound investments from India have undergone a considerable change not only in terms of magnitude but also in terms of geographical spread and sectorial composition. So, there is an essential need to understand interplay of cross-border taxes and regulatory challenges in making up with outbound investments. The main sectors for investment includes manufacturing, Financial, Insurance and business services, Transport, storage, communication services, agriculture and mining, wholesale, retails, restaurants and hotels, social, personal services and many others. Our professional team will handle all your outbound investment services with key strategies by offering end to end financial and business solutions.

Current exchange control regulations require an Indian company, which is not eligible to avail to the automatic route for investing in foreign entities, to obtain approval of the Reserve Bank of India (RBI) every time it makes investments in ventures overseas. Automatic approval is available for investments in subsidiaries/joint ventures upto maximum of USD 100 million in one-year subject to certain conditions.

There is increased government scrutiny and complex reporting requirements. Hence due care need to be taken to legally compliant. Our outbound services include following:

1.       Assistance in obtaining approvals & compliance with various requirements of RBI/ FEMA.
2.       Advisory on outbound structuring, i.e. choice of appropriate jurisdiction, structuring of investments, etc.
3.       Assistance in regular FEMA compliances as per statutory provisions like filing of form/returns, etc.
4.       Advise on tax implications and tax compliances.

TRANSACTION ADVISORY

It is the vision of a company’s leadership which decides whether the company grows at a pace from its own business activities or chooses to grow more rapidly by considering opportunities through successful mergers, acquisitions and joint ventures. Mergers and acquisitions can provide advantages like increase in market share, additional skills and expertise of new staff and meeting higher capital needs. There are many challenges to be overcome before and after these business transactions are planned.

We at Greenvissage make the deals work by partnering with the companies from the evaluations of the opportunities, finalising the strategy to the successful integration of the business. Our subject experts work in the background for collection of data with respect to the entities, conducting benefit analysis, deciding on the legal stability, accounting aspects, regulatory framework, management capabilities and general culture of the entities whether compatible. At the forefront, our experts guide in negotiations, identifying the tax issues and implications, conducting due diligence at the site, handling any complexities arising in the course of the transaction. Our team is involved at each and every stage of transaction advisory process followed by post-transaction until the client is organised for the final handover.

Our approach is methodological in achieving the desired results within specified time frame. We ensure that everything runs smoothly by collaborating with the client and the involved team members. Transaction advisory is all about addressing the problems before they occur and this is precisely what we do. Our team understands every transaction to be unique which helps them in getting innovative solutions.

Our services include:

Due Diligence – This is a process undertaken by an acquiring firm in order to assess the target company’s business, assets, capabilities and financial performance. We conduct administrative due diligence, financial due diligence, asset due diligence, human resources due diligence, environmental due diligence, taxes due diligence, intellectual property due diligence, legal due diligence, customer due diligence and strategic due diligence.
Business Valuations – This is a process and set of procedures used to determine the business worth. Business valuation can be required for different reasons like selling the enterprise, capital gains tax computations, obtaining a listing, etc. Various approaches to business valuation include asset based approach and income based approach. The valuation may be required for complying with the Acts in force like the Income Tax Act and Rules, Companies Act or Foreign Exchange Management Act.
Transaction Structuring – Our approach is to provide alternative possible routes for achieving the goal laying down the advantages and disadvantages for each. An initial review with the client for all the options will help in selecting the top three alternatives for detailed analysis. We help the client from choosing one solution to implementing it.

Complete Procedure for Foreign company registration in India

Foreign companies need to follow some of the guidelines and procedures in respect to the Companies Act 2013, RBI and others, to register a company in India. With a professional team, Greenvissage helps you with foreign company registration in india by executing all the procedures in quick and easy way.

Foreign company registration with Greenvissage

Known for inexpensive company registration services, Greenvissage helps you with your foreign company registration in a flexible and reliable manner. The company registration process can be completed within few weeks subject to timely submission of documents. We ensure that all the registration process is handled in a professional way to create the desired result.

ECB

What is ECB?

External commercial borrowing is a loan obtained by an Indian entity (eligible borrower) from a non-resident entity (eligible lender). Such loan should confirm the parameters such as minimum average maturity, permitted end-use, all-in-cost ceiling etc. The loan should meet all the parameters in totality and not on standalone basis. The ECB has been divided into different frameworks based on the type of borrower, average maturity and currency. This again has impact on its all-in-cost ceiling and end use, which we will see in detail now. ECB is typically governed by the Master Director issued by Reserve Bank of India (RBI) as updated time to time.

Why ECB is important?

Due to lesser cost of funds from external sources ECB is an attractive way of obtaining funds. Indian companies can usually borrow at lower rates from outside India as interest rates are lower there compared to the home country, India.

ECB is just a form of a loan and may not be of equity nature or convertible to equity. Hence, it does not dilute stake in the company and can be done without giving away control because debtors do not enjoy voting rights.

Process for availing ECB:

In order to obtain ECB it is required to first ascertain the following:

Eligible lender
Eligible borrower
Maturity period
All-in-cost
End-use of ECB

Further, the ECB is available under the following route:

Automatic route: under the automatic route the cases are approved by the Authorised Dealer Category-I (AD Category-I) banks.

Approval route: under the approval route, the requests have to be sent to the RBI through the Authorised Dealer bank for examination.

While the regulatory provisions are mostly similar, there are some differences in the form of amount of borrowing, eligibility of borrowers, permissible end-uses, etc.

The following form of ECB can be raised under automatic route:

Loans including bank loans;
Securitized instruments (e.g. floating rate notes and fixed rate bonds, non-convertible, optionally convertible or partially convertible preference shares / debentures);
Buyers’ credit;
Suppliers’ credit;
Foreign Currency Convertible Bonds (FCCBs);
Financial Lease; and

Foreign Currency Exchangeable Bonds (FCEBs) have to be raised under Approval route only.

Eligible Borrowers

Corporate registered under Companies Act, 1956/2013

Recognized Lenders

Supplier of equipments
Foreign collaborators
Foreign equity holders [other than erstwhile Overseas Corporate Bodies (OCBs)]
ECB from indirect equity holders is permitted provided the indirect equity holding in the Indian company by the lender is at least 51 per cent.
ECB from a group company is permitted provided both the borrower and the foreign lender are subsidiaries of the same parent.

Criteria for Foreign Equity Holder:
The term foreign equity holder for the purpose of ECB means:

(a) Direct foreign equity holder with minimum 25% direct equity holding by the lender in the borrowing entity,
(b) Indirect equity holder with minimum indirect equity holding of 51%, and
(c) Group company with common overseas parent.

Maximum amount in a financial year

The maximum amount of ECB which can be raised by corporate in miscellaneous services sector is USD 500 million or its equivalent during a financial year^$.
^$ECB proposals beyond aforesaid limits will come under the approval route

Maturity

ECB up to USD 50 million or its equivalent with minimum average maturity of three
ECB above USD 50 million with a minimum average maturity of five years
ECB above USD 50 million with a minimum average maturity of one year (manufacturing sector only)

All in cost ceiling (Interest and other processing charges for availing ECB)

All-in-cost includes rate of interest, other fees, expenses, charges, guarantee fees whether paid in foreign currency or INR but will not include commitment fees, pre-payment fees / charges, withholding tax payable in INR.

Average Maturity Period	All-in-cost Ceilings over 6 month LIBOR*
Three years and up to five years	350 basis points per annum
More than five years	450 basis points per annum
1 year of ECB upto USD 50 million or its equivalent for companies in manufacturing sector only	450 basis points per annum

*or applicable bench mark for the respective currency

For ECB’s denominated in INR the all-in-cost should be in line with the market conditions. But there is no clarity on the term ‘market conditions‘ hence one can follow above mentioned conditions as all-in-cost ceiling.

End Use

For eligible (as we are) entities, the ECB proceeds can be used for all purposes excluding the following:

Real estate activities
Investing in capital market
Using the proceeds for equity investment domestically;
On-lending to other entities with any of the above objectives;
Purchase of land

ECB is also allowed for general corporate purpose (working capital) (including working capital) provided the ECB is raised from the direct / indirect equity holder or from a group company for a minimum average maturity of 5 years and no pre-payment.

In case the ECB is raised from direct equity holder, aforesaid individual ECB limits will also subject to ECB liability: equity ratio requirement. The ECB liability of the borrower (including all outstanding ECBs and the proposed one) towards the foreign equity holder should not be more than seven times of the equity contributed by the latter. This ratio will not be applicable if total of all ECBs raised by an entity is up to USD 5 million or equivalent.

We follow a multi-pronged approach in addressing our client needs:

Standardise

We identify your standard recurring expenses and forecast and budget for it in your expense projection.

Systematise

While making relevant provisions for it on an annual / monthly basis, we also help you design and frame policies that seek to improve efficiencies within your business unit.

Supervise

We set in motion a proactive follow-and-update process on accruing regulatory changes that saves you the ordeal of chasing us.

Simplify

Our deep insight enables us to visualise issues or challenges and give you sufficient buffer time to act on it.

Single point of contact

Along with our accounting services we also closely co-ordinate with several agencies such as bankers, auditors, insurers, lawyers, directors etc.