foreign company - subsidiary in india

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 July 2010 A foreign company wants to open a branch office in India( to market its products here). Can the company be formed as subsidiary of the foreign company? If so should the company be formed under the companies Act and will it be given a separate Identity number?

Rasesh

Rasesh (Expert)
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15 July 2010 No need to form a seperate subsidiary company. The foreign company can open a branch office in India which can be registered with the MCA and the foreign company gets registered as such.

Querist : Anonymous

Querist : Anonymous (Querist)

15 July 2010 Will the company be given a separate CIN for identification in India or else the GLN of the foreign company will be used?
kinldy clarify

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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25 July 2024 Yes, a foreign company can establish a subsidiary in India to market its products or conduct business operations. Here’s how it typically works:

### Formation of Subsidiary in India

1. **Company Formation**: The subsidiary in India would need to be incorporated under the provisions of the Indian Companies Act, which is currently governed by the Companies Act, 2013. This involves registering the subsidiary as a private limited company or any other suitable form under Indian law.

2. **Separate Legal Identity**: Once incorporated, the subsidiary in India will have a separate legal identity from its foreign parent company. It will be registered with the Ministry of Corporate Affairs (MCA) in India and will be issued a unique Corporate Identity Number (CIN). The CIN is a distinct identifier used for legal and administrative purposes within India.

3. **Ownership and Control**: The foreign company (parent company) will typically hold shares in the Indian subsidiary. The extent of ownership and control will depend on the shareholding structure agreed upon during incorporation.

4. **Compliance**: The Indian subsidiary must comply with all Indian laws and regulations applicable to companies, including taxation, corporate governance, reporting requirements, and any sector-specific regulations.

### Use of GLN (Global Location Number) vs. CIN

- **CIN**: The Indian subsidiary will be assigned a CIN upon incorporation, which is used for identification within India. This number is necessary for legal and regulatory filings, tax purposes, and other official documentation in India.

- **GLN**: A Global Location Number (GLN) is typically used for global identification purposes and may be assigned to the foreign parent company. It is not a substitute for the CIN of the Indian subsidiary. The GLN is used internationally to identify legal entities and locations within the global supply chain context, but it does not replace the requirement for a CIN under Indian law.

### Clarification

To summarize, yes, the foreign company can establish a subsidiary in India under the Indian Companies Act. The subsidiary will have a separate legal identity, and it will be issued a unique Corporate Identity Number (CIN) by the MCA in India. This CIN is essential for its identification and compliance within India's legal framework. The GLN, if used by the foreign parent company, serves a different purpose and does not substitute the need for a CIN in India.