ANNUAL COMPLIANCES THAT FOREIGN COMPANY MUST COMPLY THROUGHOUT THE YEAR

What is a Foreign Company?

Foreign Company means any company or a corporate body incorporated outside India which has its place of business in India whether by itself or through an agent/physically/through electronic mode

A Foreign Company can start its business through 3 modes:

• Liaison/Representative Office
• Project Office
• Branch Office.

Strategies to be followed by a foreign company to start a business in India:

• The provisions with regard to Foreign Company are contained in Section 380 to Section 386, Section 392, and Section 393 of the Companies Act, 2013 and also in Companies (Registration of Foreign Companies) Rules, 2014.
• Foreign companies can start its business operation through a wholly-owned subsidiary Company in sectors where the government allowed 100% FDI.
• A Foreign Company can start its business operation by entering into a Joint Venture with an Indian person having expertise as required in sectors where the government does not allow 100% FDI.

DOCUMENTS REQUIRED:

Documents that need to be filled with the registrar of the company by foreign companies are:

• Rules 3(3) of the Companies (Registration of Foreign Companies) Rules, 2014, provides that the Foreign Company is required to file Form FC-1 (Along with approval from the RBI) or declaration that no such approval is required to be submitted.
• Rules 3(4) of the Companies (Registration of Foreign Companies) Rules, 2014 provides that an alteration can be done in the documents submitted in Form FC-2 within a period of 30 days.
• Copy of Memorandum of Association and Articles of Association of the company, the documents shall be in the English language.
• Complete address of the registered office of the Company
• Details of directors and Company Secretary of the Company
• Name and other details of an authorised representative of the Foreign Company appointed by the Foreign Company who must be an Indian
• Timing of office i.e., opening, closing and holidays
• Declaration on the fact that the director of the company or authorized representative were never convicted or debarred

COMPLIANCES:

1. ACCOUNTS NEED TO BE PREPARED BY FOREIGN COMPANY:

According to section 381 In, Accordance with Indian Law every Foreign Company is required to prepare the financial statements and should file it within a period of 6 months from the end of every financial year.

The documents must be in the English language. The accounts to be audited by a Practicing CA firm. The Foreign Company is also required to file the financial statement with a list of places of its business only in Form FC-3. The same is to be filed along with the statutory fees.

2. DETAILS OF FOREIGN COMPANIES TO BE FURNISHED:

According to section 182, It is mandatory for the Foreign Company to display its name and other details as provided under the Act exhibit outside its office, on its business communication.  The letter of the name must be clear.

3. SERVICE ON FOREIGN COMPANY:

According to the section, any notice or document is served to the Foreign Company it must be clearly addressed and the name of the person to which it is addressed must be written.

4. ANNUAL FILING:

The annual return is to be filed by the Foreign Company in Form FC-4 within 60 days from the end day of the financial year to the Registrar of Companies.

There are other Compliances to also be complied by the foreign company.