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Subsidiary Company

Foreign companies setting up branch offices and liaison offices require prior approval of the Reserve Bank. In India, branch offices must be registered with the RoC of the respective Indian state. No approval of the Reserve Bank is required for foreign companies to establish branch offices/ units in SEZs to undertake manufacturing and service activities, subject to satisfaction of certain conditions.

A branch office may enter into contracts on behalf of the non-resident parent company and may generate income. However, the activities of a branch office is restricted to representing the parent company, exporting/ importing goods, rendering professional or  Guide on Doing Business in India.

Following works can be carried by the branch office or Liaison office:

  • Consultancy services,
  • Carrying on research work in which the parent company is engaged,
  • Promoting technical or financial collaborations between Indian companies and the parent or overseas group company,
  • Representing the parent company in India and acting as buying/ selling agent in India,
  • Rendering services in information technology and development of software in India,
  • Rendering technical support to the products supplied by parent/group companies and foreign airlines/ shipping companies.


Following works cannot be carried by a branch office:

  • Retail trading activities of any nature,
  • Manufacturing or processing activities in India, whether directly or indirectly.
  • The scope of the activities may be further curtailed by conditions in the approval granted by the Reserve Bank.

Following works can be carried out by a liaison office:

  • Restricted to representing the parent company/group companies,
  • Promoting export from/to India,
  • Promoting technical/financial collaborations between parent/group companies and companies in India,
  • Gathering information for the parent company and acting as a
  • Communication-channel between the parent company and Indian companies.


The expenses of liaison offices are to be met entirely through inward remittances from the Head Office outside India. A project office is usually set up for execution of large projects such as major construction, civil engineering, and infrastructure projects.




Subsidiary Company, Uncategorized
Every business continues to explore various geographical segments to experiment with the strongly believed products, if we are talking about the fast growing economy, India is the land of opportunities, which is phenomenally pine. This article is crafted for all you NRI planning to start a business in India, have a clear and quick checklist of all the Legal and Accounting Compliance one may start planning for.
  1. Entity Types: You have two options, LLP and Pvt Lt company.
  2. Directors and Shareholders: it is not legally required that directors be residents of India, many service providers will recommend that the subsidiary initially have at least one local director and one local shareholders to efficiently complete the incorporation process. This structure avoids administrative time-delays, such as requirements that non-India residents have incorporation documents notarized in an Indian consulate in the United States(say), and enables the U.S. company to establish the subsidiary more quickly. Drafting a shareholder?s agreement for the same will not take more than 5 days.
  3. Incorporation: Having all the documents ready. Checking of name availability and name reservation. Prepare and file charter documents (Memorandum of Association and Articles of Association), with registration fee and stamp duty, Appointment of initial directors, Issuance of shares to initial shareholders, print share certificates, register company and pay registration and filing fees. Time consumed to incorporate the same will not exceed 30 days.
  4. FCGPR Compliance: Since Company will be one of the major shareholders and hence the initial capital comes from the Foreign Company, as per FEMA Act, FCGPR Compliance must be followed by the Subsidiary. RBI should be kept informed about the filing of FCGPR.
  5. Open bank account: Having a Current account for the subsidiary in India would be mandatory. This will not take more than 10 days.entity-types-1
  6. Operations related Compliance: Subsidiary company operational relationship must be carefully documented and monitored to maintain the separate legal status of each company. There must be intercompany and other agreements between the companies to have the intended effect for tax, isolation of liability and other business purposes. Drafting agreements covering the same would take a maximum of 7 days.
  7. Post Incorporation Registrations: Application for permanent account number and TAN. This will not take more than 20 days.
  8. Tax Registration: Registrations under the professional tax, sales tax and Shops and Establishment laws for your operations in India. This will not take more than 30 days. GST Registration depending on the busienss model.
  9. Currency Exchange Regulations: The government of India regulates the movement of funds out of India and approval may be required before cash may be transferred out of India. There is an exemption from the Indian currency restrictions for the exercise of stock options for employees based in India.
  10. Exporting- Importing Business: Approval of Customs Dept. for bond and facility license, and import/export codes. Ideally, the time consumed for this is 45 days. SIP Registration is optional.
  11. Intellectual Property Ownership: Intellectual property protection is implemented in India both by statutory compliance and by written agreement. Copyright and patent protection are the primary types of statutory protection. Trademark and service mark statutory protections also exist. Trade secret protection is implemented by agreement
  12. Employee Contracts: Agreements with employees (and contractors) need to be completely covering moral rights and other matters.
  13. R&D Agreement: There should be a research and development agreement between the U.S. company and the subsidiary.

Wazzeer is vouched by Entrepreneurs as the most reliable Legal and Accounting Partner. We would be super excited to see your startup kick starts seamlessly. Let’s Connect!

Business Formation, Subsidiary Company, Uncategorized
There is much vibe in IOT space, startups are just banging this opportunity, which is super cool. Getting out the product in the tech-savvy market is strategic and a reasonable idea. You will agree with me, some of our Indian IOT startups, patenting in India (creating a solid competitive edge in home country), having the tech team over here in India, and the management team (may or may not) in the US. Incorporating a Subsidiary in the USA involves a system of procedures and eligibility criteria that business having plans to expand in the USA must know. 

1. For getting registered: You should inform the secretary of state’s office to register. Whether it is a company with limited liability or corporation, that will depend upon the nature of your entity.

2. Registration: You can either incorporate your entity as an incorporation or LLC. If at all you choose to incorporate in Delaware as a C Corp, You don?t have to be present in the USA for the incorporation. 

Quick checklist for incorporating in USA  Complete list of documents for incorporating your USA subsidiary
3. Along with Incorporation, get EIN: This is similar to the Social Security Number. Each business has a unique tax ID number called Employer Identification Number that you will have to register for. Having an EIN is essential to deal with banks and pretty much everything else in the USA.

4. You will need a US Address: To receive business documents(like billing and other stuff) and for tax compliance, it is mandatory that you have a US Address.

5. A US Bank Account: You would require a bank that allows remote processing of account opening and operations. Guys, before applying for a bank account, it’s mandatory you have an EIN.

6. A Business Credit Card: A secure credit card is nothing but a credit card with a spending limit secured by the money in your bank account/deposit.

7. A US Phone Number: You can either get a number for company or get a toll free number from any of the service providers like etc,

8. Set up a Distributor License: That assigns an exclusive license to the US company, to host and sell your products in the USA. The Indian entity now holds the entire Intellectual Property (IP), by providing a hosting and distribution license to US companies for a 20% price cut per customer.

9. Terms of Service owned by subsidiary: All the legal recourse should be made available to your US entity.

10. Earnings and transfer of money: You can retain 20% of the revenue earned by the US entity and transfer 80% of the revenue back to your parent company as a license fee.

11. Tax Compliance: You will be liable to pay taxes on the profit made on the 20% margin after all the operational costs are subtracted. Remember that you will have to pay other taxes such as State tax, etc., irrespective of the margin you make.

Wazzeer is trusted by Startups as a reliable Legal and Accounting partner, we would be glad to get you in touch with our Wazzeer Professional Network in the USA.

For any Legal and Accounting support, Happy to help you, let us talk

Business Formation, Subsidiary Company, Uncategorized
Singapore is now a popular place to raise international funding. Companies leverage its operational and legal convenience to set up a base or regional headquarters. There are close to 6000 Indian companies registered in Singapore, of which 2000 are active, says George Abraham, CEO of Singapore Indian Chamber of Commerce & Industry.  If you have plans for a Subsidiary company in Singapore, then this is article will give you all the guidance.

Singapore with its 3.5 lakh Indian Diaspora (9.1% of the population) is far more socio-culturally accepting and geographically closer. And with 199 flights a week from India, it’s easier and cheaper to fly to Singapore from anywhere in the country.   A Singapore subsidiary can be wholly owned by a foreign parent company and is considered a separate legal entity from the parent company. It is important to note that under the FEMA Act, the intention to stay outside or inside India for an uncertain period is important. This is different from the provisions of section 6 of Income Tax Act. To be a resident under Income Tax Act, an individual has to only stay in India for a specified number of days. So, an individual may be nonresident under Income Tax Act during a year and may be resident as per the FEMA Act, during the same year.  For any Legal and Accounting support, happy to help you, let us talk


 Wazzeer is vouched by Entrepreneurs as the most reliable Legal and Accounting Partner. We would be super excited to help you. Let’s Connect! 🙂