ESDM & FDI QUERIES
Citizens / Entities of Pakistan, Bangladesh, Sri Lanka, Other Forms: Afghanistan, Iran, and China can establish a branch or a liaison office or a project office or any other place of business with the approval of the Reserve Bank of India which takes a decision on the application in consultation with the Government of India.
General permission( No prior approval required) has been provided to project / branch office which satisfies few conditions and is not from the countries mentioned above or is not under the government route. The details can be on the following linkhttp:// www. rbi. org. in / scripts / BS _ CircularIndexDisplay. aspx? Id = 7312
Section II
Queries relating to setting up
Given below are rules and regulations relating to setting up of: |
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Company |
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Extension of foreign entity( Liaison / Branch / Project office) |
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Limited Liability Partnership |
Information on starting a company in India is not a private company. A subsidiary of Indian public company is also treated as a public company. A public company is required to have a minimum paid-up capital of INR 500,000 with minimum of 7 shareholders and 3 directors.
Private limited company: The key features of a private limited company in India are as follows:
Q-8 What are the rules and regulations for setting up a company in |
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It requires a minimum of two shareholders and two |
India? |
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directors( both of them can be foreigners). |
A foreign corporate can invest and start its operations in India |
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It can be formed with a minimum capital of INR 100,000. It |
by incorporating a wholly-owned subsidiary under the |
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can raise loans from banks, financial institutions, etc. |
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provisions of Companies Act 1956. It is treated at par with a domestic company and all rules and regulations applicable to an Indian company equally apply to wholly owned subsidiaries.
Another option is to enter into a joint venture with an Indian by forming a company. The management and running of the JV is influenced by the terms stated in the shareholders agreement.
A company set-up in India can either be private limited or public limited.
Public limited company: A public company is defined as one that
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The number of shareholders cannot exceed 50. It cannot invite the public to subscribe to its shares or debentures. n
It can raise debt in foreign currency in the form of external commercial borrowings.
Generally for foreign investors opening a private limited company is considered as the most popular mode of entry.
Process for setting up a private limited company in India by foreigners: The brief steps required for setting up a company are as follows:
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Phases
FAQs on various aspects related to Foreign Direct Investment in ESDM sector
Activity Steps
Limited Liability Partnerships
Government Route
Only in sectors in which 100 % FDI is permitted under the automatic route and there are no FDI linked performance conditions.
For example: In ESDM 100 % FDI is allowed in LLP under the government approval route except in manufacturing of defence electronics & brownfield investments in medical devices manufacturing in which FDI in LLP is not allowed.
I
Obtaining Director’ s Identification Number #( DIN) & Digital Signature( DSC) for the proposed directors a. Obtaining the proof of identity and proof of address from the proposed directors( notarized and apostiled in case of foreign directors) b. Filing of DIN for the proposed directors and obtaining DSC c. At the time of incorporation of company, it is mandatory to submit particulars of registered office.
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Filing of name approval |
a. Filing of form for seeking name availability with Registrar of Companies( In case there are corporate shareholders, the company would have to draft a board resolution for seeking name approval. The board resolution and powers to incorporate a company). b. Obtaining name approval |
III
Filing of charter, location of registered office and details of directors a. Drafting of charter of company( memorandum and articles of association) and other forms for filing with ROC. b. Sending the subscriber ' s sheet for execution & authentication, in case of non-. resident shareholders c. Filing of forms with ROC d. Obtaining Certificate of Incorporation
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Post incorporation formalities |
a. Obtaining permanent account number( PAN), opening the bank accounts, tax |
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deduction account number( TAN) for the company. |
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b. Filing with Reserve Bank of India for the subscriber( initial) capital. |
Spotlight on Indian Electronics 2016 | 46