How to register a company in India from USA
In this article, we will discuss How to Register a Company in India from the USA. We will discuss various steps needed to register a company in India while you continue to stay in the USA, which entities you can form, and the documents required for registration.
Starting a business in India is a great idea. As you might be aware that India is the second-largest country in terms of population which provides a big market and massive scope for sales. India is also one of the fastest-growing economies in the world. India has been recognized across the globe as an industry leader in various sectors like IT, Jewellery, Gems & Stones, Handicrafts, agri-products, etc. This certainly helps foreign nationals to establish their companies in India and generate good revenues and profits. This is also coupled with an easy registration process under the Companies Act, 2013 for the companies intending to start operations in India. Thus, you might be curious to know the process of registration in India. So, let’s start…
Which form of the company should be registered in India by a US resident?
Starting a business in India by a foreign national depends on the scale of business they want to achieve. In case of limited marketing & research objectives, establishing a branch/ liaison office is sufficient. But if you intend to carry out business activities a large scale, there are the following options for you:
- Registering a Private Limited Company
- Registering an LLP (similar to LLC in USA)
Though there are other options too like a partnership firm but we would advise only private limited company or LLP as preferred options due to relaxed foreign remittance rules in the two options.
What are the benefits of private limited company registration in India for foreign nationals?
The procedure of incorporation of a private limited company is very easy in India where the entire process is online and a company can be registered hassle-free within 7-10 days after complete documentation. You would be glad to know that the Indian Government promotes foreign direct investment (FDI). Thus, FDI of up to 100% into a private limited company is allowed under the automatic route, wherein no Government permission is required. This provides a massive opportunity to foreign nationals and foreign companies intending to explore the Indian markets.
Conditions for registering a company in India from USA
To start a company in India requires a minimum of two persons and an address in India. This is due to the fact that a private limited company in India must have at least two directors and a minimum of two shareholders (who can be an individual or any entity).
The preferred legal structure for foreign companies is to establish a company with three directors, two being foreign nationals from the parent country and one local director (who is an Indian citizen). Having a local director is not a concern as there is no requirement of having shares in the company to become a director of the said company. Therefore, you can appoint a local director in your company who is an Indian resident without diluting any shareholding/ ownership control. ‘Taxwink’ team can help you out in arranging a local director for the smooth incorporation of your company.
Further, you would need an address in India that will serve as the registered office of the company. The address of the company is important to decide legal jurisdiction under the Companies Act as well as Goods & Service Tax (GST). The preferred cities are major metros like Mumbai, Delhi, Bangalore, and Hyderabad and semi-metros like Jaipur, Pune, Chandigarh, etc. Taxwink team can help you out in getting an address for your company incorporation.
Pre-requisites for registering a company in India
- You need to have at least one Indian director who is a resident of India
- You must have all proper documents and KYC of directors & shareholders to get a valid digital signature (DSC) and Director’s Identification Number (DIN)
- You must ensure that all the documents required for company incorporation are duly notarized and apostilled by the approved authorities in your country.
- It is also important to check whether your business sector falls in the category of ‘Automatic Route’ or not. In case your business does not fall in the Automatic FDI route, you will need prior permission from the relevant Ministry of Central Government or RBI to start a company.
- You need to apply for a suitable name for your company and also prepare a Memorandum of Association (MOA) and Article of Association (AOA) which serves as a charter of the proposed company.
Documents needed for registering a company in India from USA
You need to submit the following documents:
- A copy of a valid passport
- A copy of the Driving license (DL) from the issuing country
- Voter ID of the issuing country
- Social Security Number
- Bank Statement of your Bank
- Photographs
- A resident permit that is issued by the Indian embassy
- A copy of a valid business visa that is issued to the foreign national
The documents required in case of a foreign company initiating a company in India are:
- Certificate of incorporation that proves that the company has been legally incorporated
- Board Resolution of the foreign company
- Valid Address Proof of the foreign company
Cost for Registering a Company in India
The costs of registering a company in India are relatively inexpensive as compared to other countries. The registration process may take some time due to the process of collecting and notarizing the documents and KYC. But the entire process is online and hassle-free. Following registrations are voluntarily given by the Government of India along with a company incorporation certificate which saves your cost:
- Permanent Account Number (PAN)
- Tax Deduction Account Number (TAN)
- Employee State Insurance (ESI) registration
- Provident Fund (PF) registration
- Professional Tax registration (in the state of Maharashtra)
Post Incorporation Formalities
After registration of the company in India, you can open a bank account for the company in India. Once the bank account is opened, you can bring funds in your Indian bank accounts with minimum compliances with RBI which can be easily done by a legal or accounting professional. For running business activities in India, you also need to take the following registrations additionally:
- Import Export Code (for import/ export business activities)
- Goods & Services Tax Registration (GST)- subject to threshold turnover limits of INR 20 Lakhs/ 40 Lakhs
- Shop Act Registration (one-time process)
Please note that for all the above compliances, you need the services of a professional to get the above registrations done. ‘Taxwink’ has a team of experienced professionals who cater to all your accounting and legal requirements and perform the company incorporation process on your behalf in the minimum time period. So, if you are set to register a company in India, get in touch with us. We will be glad to assist you and serve your purpose in India. Contact Taxwink team: +91-9660930417.
