Types of Entities
Liaison office: Setting up of a liaison office requires prior approval from Reserve Bank of India (RBI). Approval is usually granted for a period of three years and can be renewed thereafter.
Branch office: A prior approval from RBI is required. RBI closely examines the proposed activities to be carried out in India.
Subsequently, a certificate of establishing place of business in India is required to be obtained from Registrar of Companies.
Project office: In specified cases, a project office is allowed to be set up under automatic route otherwise a prior approval is required from RBI. As in case of branch office, a certificate of establishing place of business in India is required to be obtained from Registrar of Companies.
Incorporation of a company: For registration and incorporation, an application has to be filed with Registrar of Companies. Once a company has been registered and incorporated in India, it is subject to laws and regulations as applicable to other domestic companies in India.
Following steps are required to incorporate a company:
- Obtaining DIN (Director Identification Number)
- Applying for name availability
- Drafting Memorandum of Understanding (MOU) and Articles of Association (AOA)
- Court stamping of MOU and AOA
- Signing of MOU and AOA by first subscribers
- Filing with Registrar of Companies (ROC)
- Vetting of MOU and AOA by ROC
- Obtaining certificate of incorporation
Immediate Business compliances:
Following registrations would be required to be done, depending on nature of business:
- PAN (Permanent Account Number): All income tax payers are required to obtain an income tax registration number i.e. PAN
- TAN (Tax Deduction Account Number): While running a business, certain payments will require the payee to withhold tax. A new business is required to obtain Tan from income tax department.
- Service tax: A person/company providing specified services needs to obtain service tax registration within 30 days of providing the services.
- VAT (Value Added Tax): VAT is levied on sale of goods. Any business proposing to carry out a works contract or trade in goods needs to register for VAT.
- Excise registration: Excise is an indirect tax levy on manufacture of goods.
- FRRO (Foreigners Regional registration Office): Foreigners coming to India on employment need to register with FRRO within 14 days of their arrival.
- IEC (Import Export Code): Prior to carrying out any export or import activities, it is mandatory to obtain an IEC from Directorate General of Foreign Trade.