The term “offshore company” refers to a corporation established in a nation other than the one where its headquarters are located. Offshore companies are those established or expanded by a firm owner in a different nation. There will be a geographic separation between the company’s headquarters and the offshore subsidiary.
Company Registration Requirements for Foreign Entities
In order to set up an offshore company registration in India, a foreign firm owner must meet the following requirements:
- Directors and stockholders
Two shareholders and two directors are required for a private limited company to be founded in India. Seven shareholders and three directors are required to create a public limited company in India. LLPs need a minimum of two authorized partners when operating abroad. One of the firm or LLP’s board members must be an Indian citizen, as well.
- Approved Funding
The offshore company must have been incorporated in India with an approved share capital of at least Rs.1,00,000. Having a certain amount of money in the bank is unnecessary to start a business.
- Terms and conditions of the organization’s association (MOA and AOA), as well as its bylaws (AOA)
According to the Companies Act and Rules, a foreign company’s MOA and AOA must be prepared by the company’s foreign owner. The name registered office, purpose, liability, and capital clauses all need to be included in the MOA for it to be valid. The AOA for offshore company registration must include specifics on how the company’s shares, capital, directors, voting rights, financial statements, and audits are handled, among other things.
- Office Location
It is possible for an offshore corporation to be set up in India and to have its headquarters outside of India. A registered office in India and a local registered agent must set up an offshore business. Official communication between India and the registered office takes occurs at this location.
The process of registering an offshore company
Indian residents and foreign nationals alike need to apply for the Director Identification Number (DIN) with the MCA before setting up an offshore firm. Every Indian company’s director must have a valid DIN issued by the MCA.
If you are a director or subscriber of the MOA or AOA, you must get a Digital Signature Certificate (DSC). Subscribers to the MOA and AOA are required to include their DSC on the electronic versions of the documents, which the MCA will receive together with their application for incorporation. By affixing their Digital Signature Certificate (DSC) to the e-forms, the firm’s directors and authorized signatories must submit company forms on the MCA site.
The name of the firm must be reserved in the SPICe+ form by the offshore corporation for offshore company registration. Firm registration will be denied if the new company’s name is too close to the name of an existing company or a trademark. When a SPICe+ form is rejected, a new one must be submitted and paid for via the MCA site.
To submit the SPICe+ form, foreign investors and owners must first sign up for an account on the MCA site in order to do so electronically. As a result, the SPICe+ form may be filled out online and sent to the MCA site to create an offshore business.
The offshore firm must upload all the necessary papers, such as the e-MoA and e-AoA, proof of Indian office address, director identification, and address, etc., with the SPICe+ forms.
If the Registrar of Companies verifies the application and is satisfied that it conforms with the terms of the Companies Act, the Certificate of Registration for an offshore company in India will be issued.
According to the rules and regulations of the nation where the offshore company is incorporated, it is subject to those laws and regulations, not those of its founders/owners. As a result, many business owners opt to set up an offshore corporation with the help of IT-Offshore in a foreign nation, where it may take advantage of a wide range of advantages.