Foreign subsidiary of indian company incorporated in usa
This query is : Resolved
14 June 2016
We are a Public Limited Company, we have recently set up an INC in USA as a 100% subsidiary. What are the compliance requirements in terms of :
1. Reporting to ROC?
2. Reporting to RBI?
3. Any other compliance to be adhered to?
1. Reporting to ROC?
2. Reporting to RBI?
3. Any other compliance to be adhered to?
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15 June 2016
If a 100% subsidiary is set up, Companies Act will be applicable. However, for all the foreign currency transactions, RBI guidelines has to be complied. Further, FEMA regulations are also needed to be taken into consideration.
15 June 2016
Mam i need to know, if ROC has to be informed regarding the incorporation of INC in USA as a 100% subsidiary of a Public Limited Company incorporated in India?
15 June 2016
please resolve my query in detail
25 July 2024
Setting up a 100% subsidiary in the USA as a Public Limited Company (PLC) involves certain compliance requirements both in India and the USA. Here's an overview of the typical compliance requirements:
### 1. Reporting to ROC (Registrar of Companies) in India:
Since your Indian PLC has established a subsidiary in the USA, you need to comply with the following reporting requirements in India:
- **Board Resolution:** You would need to pass a board resolution in your Indian company approving the incorporation of the subsidiary in the USA and authorizing any directors or officers to act on behalf of the Indian company.
- **Intimation to ROC:** Generally, within 30 days of incorporation of the subsidiary, you need to inform the Registrar of Companies in India about the incorporation of the subsidiary. This is usually done by filing a Form FC-GPR (Foreign Collaboration - General Permission Route) with the ROC.
- **Annual Filings:** Although the subsidiary is in the USA, your Indian PLC will still need to comply with the annual filing requirements under the Companies Act, such as filing annual financial statements and annual returns with the ROC.
### 2. Reporting to RBI (Reserve Bank of India):
- **Form FC-GPR:** As mentioned earlier, within 30 days of incorporation of the subsidiary in the USA, you need to file Form FC-GPR with an AD Category-I bank (Authorized Dealer Category-I) in India. This form is required for reporting the incorporation of the subsidiary and the initial investment made by the Indian PLC.
- **Annual Return on Foreign Liabilities and Assets (FLA):** Your Indian PLC is required to submit an annual return on FLA to RBI by July 15th every year, reporting its assets and liabilities outside India, including those of its subsidiaries.
### 3. Other Compliance Requirements:
- **Tax Compliance:** Ensure compliance with tax obligations both in India and the USA. This includes transfer pricing regulations, if applicable, between your Indian PLC and its US subsidiary.
- **Legal and Regulatory Compliance in the USA:** Compliance with local laws and regulations in the USA where the subsidiary is incorporated, such as filing annual reports, maintaining local registrations, compliance with state laws, etc.
- **Corporate Governance:** Follow corporate governance practices applicable to your Indian PLC and ensure they are extended to the subsidiary as per the laws of the USA.
- **Transfer Pricing:** If your Indian PLC and its US subsidiary engage in transactions, ensure compliance with transfer pricing regulations under both Indian and US laws to avoid any tax implications.
### Note:
- It's advisable to consult with a professional tax advisor or a corporate lawyer who specializes in international business to ensure all compliance requirements are met accurately and timely.
- Compliance requirements may vary based on the specific circumstances, the nature of business activities, and changes in regulatory frameworks. Therefore, it's crucial to stay updated with legal and regulatory changes in both India and the USA.
By adhering to these compliance requirements, your Indian PLC can effectively manage its subsidiary in the USA while ensuring legal and regulatory compliance in both jurisdictions.
### 1. Reporting to ROC (Registrar of Companies) in India:
Since your Indian PLC has established a subsidiary in the USA, you need to comply with the following reporting requirements in India:
- **Board Resolution:** You would need to pass a board resolution in your Indian company approving the incorporation of the subsidiary in the USA and authorizing any directors or officers to act on behalf of the Indian company.
- **Intimation to ROC:** Generally, within 30 days of incorporation of the subsidiary, you need to inform the Registrar of Companies in India about the incorporation of the subsidiary. This is usually done by filing a Form FC-GPR (Foreign Collaboration - General Permission Route) with the ROC.
- **Annual Filings:** Although the subsidiary is in the USA, your Indian PLC will still need to comply with the annual filing requirements under the Companies Act, such as filing annual financial statements and annual returns with the ROC.
### 2. Reporting to RBI (Reserve Bank of India):
- **Form FC-GPR:** As mentioned earlier, within 30 days of incorporation of the subsidiary in the USA, you need to file Form FC-GPR with an AD Category-I bank (Authorized Dealer Category-I) in India. This form is required for reporting the incorporation of the subsidiary and the initial investment made by the Indian PLC.
- **Annual Return on Foreign Liabilities and Assets (FLA):** Your Indian PLC is required to submit an annual return on FLA to RBI by July 15th every year, reporting its assets and liabilities outside India, including those of its subsidiaries.
### 3. Other Compliance Requirements:
- **Tax Compliance:** Ensure compliance with tax obligations both in India and the USA. This includes transfer pricing regulations, if applicable, between your Indian PLC and its US subsidiary.
- **Legal and Regulatory Compliance in the USA:** Compliance with local laws and regulations in the USA where the subsidiary is incorporated, such as filing annual reports, maintaining local registrations, compliance with state laws, etc.
- **Corporate Governance:** Follow corporate governance practices applicable to your Indian PLC and ensure they are extended to the subsidiary as per the laws of the USA.
- **Transfer Pricing:** If your Indian PLC and its US subsidiary engage in transactions, ensure compliance with transfer pricing regulations under both Indian and US laws to avoid any tax implications.
### Note:
- It's advisable to consult with a professional tax advisor or a corporate lawyer who specializes in international business to ensure all compliance requirements are met accurately and timely.
- Compliance requirements may vary based on the specific circumstances, the nature of business activities, and changes in regulatory frameworks. Therefore, it's crucial to stay updated with legal and regulatory changes in both India and the USA.
By adhering to these compliance requirements, your Indian PLC can effectively manage its subsidiary in the USA while ensuring legal and regulatory compliance in both jurisdictions.
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