Brief Overview:

MCA has provided clarity on certain registration and compliance framework applicable to foreign companies, liaison offices, project offices, branch office and foreign-owned subsidiaries in India. Some of the key points on which clarity is provided includes: (a) practical issues relating to foreign parent-subsidiary structures, (b) approval and filing requirements, (c) regulatory framework including for key filings and approvals involving other regulatory authorities, (d) CSR obligations, and (e) documentation and apostille requirements.

Technical Details:

Key clarifications are set out below:

1) Foreign subsidiary ≠ “foreign company”: An Indian company remains an Indian company even if it is 100% owned by a foreign entity and is not required to register as a foreign company.

2) No single-window clearance: The National Single Window System may help identify approvals, but it does not replace sectoral approvals or MCA filing requirements.

3) Foreign company filings: Form FC-1 is to be filed within 30 days of establishing a place of business in India; every subsequent project does not necessarily require a fresh FC-1 filing. IFSCA approval shall precede if the foreign company is set up in GIFT IFSC.

4) Approvals and regulatory positioning: FAQs also clarify that a foreign company need not fall exclusively under foreign exchange regulations and, where no approval is required, an appropriate declaration may be furnished.

5) CSR Requirement: Foreign companies are not exempt from complying with CSR requirements if the same apply to them.

6) Execution matters: Notarisation, apostille and consularisation requirements depend on the place of execution of the document, and not on the signatory’s nationality or jurisdiction of incorporation.

Takeaways:

The FAQs do not introduce any change in law; rather, they provide clarity on several recurring practical questions that the investors and foreign companies may generally have when entering India.

For further details, please see:

MCA FAQs – Registration of Foreign Companies / Subsidiary of Foreign Body Corporate

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