Legal Advice on Incorporation, Government Licenses & Permits for Foreign Direct Investments (FDI) in India-Clothing & Apparel Industry: Best FDI Attorney in India
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“Foreign Direct Investment in India or FDI in India and especially in the clothing and apparel industry has been welcomed by the foreign investors. A lot of emphasis is given for the exports and setting up of big corporations and manufacturing units across India. The FDI inflows in India in the last past two years has seen a magnanimous jump. The government has also tweaked the business laws or the corporate laws in India. Further, tax sops are also given in few developing states. “
Introduction: India’s textile and garment business is currently one of the country’s most competitive and prosperous economic sector. This industry is responsible for roughly the same percent of India’s total exports year after year. This garment business is well-positioned to prosper in the next years, due to strong local and international demand.
Incorporation of Company by Foreign Investors: By submitting eForm FC, any foreign corporation can open a business in India. The company is responsible for filling out this information. The eForm must be signed digitally by a foreign company’s authorised representative. For foreign business directors, there is no requirement to apply for and receive a DIN. However, the DSC of the authorised agent of the foreign firm must be registered using the MCA portal’s associate DSC service. When a foreign firm invests 100 percent of its FDI in an Indian business enterprise through the automatic route, the Indian company will become the foreign company’s Wholly Owned Subsidiary Company. It’s a company whose entire share capital is held by a foreign corporation. It might be a private limited company, limited by share or by guarantee, or it can be a firm with unlimited liability.
Documents required for Incorporation of a Company by a Foreign National in India
Some documents are mandatory for a foreign company or an Indian company to invest in India and be a subsidiary company.
1) For both Indian and foreign investors- Proof of address, if office is rented then the most recent electricity bill would also work.
2) Trademark Registration
3) Trade License
4) In case of a manufacturer, Pollution and Factory License
5) Shop Establishment license.
6) For foreign investor-
• Photograph ID proof (it should contain name, date of birth and phone number)
• Address Proof
• Passport
All these documents must be certified by the Indian Consulate or the consular.
7) For Indian investors
• Photograph ID (Driving license, Aadhar or passport)
• Address Proof
• PAN Card
Procedure for Incorporation of a Company by a Foreign National in India
A minimum of two shareholders and directors is required. All directors must get a DIN (Director Identification Number) as well as a digital signature certificate. Further the Company’s name must be applied for using the Form INC-1. The investing company must first have a MOA and AOA, and then shareholders and appropriate individuals must subscribe to the MOA. When the registrar of companies ratifies the application, the applicant must file forms INC-7, which is an application for Incorporation of the Company, DIR-12 (Special provisions for the appointment of key managerial personnel, directors, and any modifications in them), and INC-22, which is a notice for the location or any amendment in the address of the company’s registered office), together with MOA and AOA. The payment of ROC and stamp duty costs should be paid online in accordance to the company’s authorised capital. All of the paperwork are reviewed by the registrar, and both the forms are approved, as well as INC-7. A certificate of incorporation is sent after the registrar is confident with the materials. A Fill out an application for a PAN card and a business bank account should be filed. Capital documentation must be presented for FDI compliance following the subscribing of shares.
Government Licenses and Approvals required to set up a Textile Company of a Company by a Foreign National in India
If any individual or any company is planning to set up a textile company in India then they should have to get the below mentioned approvals and licenses:
• GST Registration
• Factory license as per the Factories Act of 1948
• License under or any other registration mentioned under Provident Fund Registration
• MSME Certificate
• Business Registration, it is done by forming a Limited liability company or a Private limited company
• License under or any other registration mentioned under Shops and Establishment Act
• Approvals as required under Labour laws
• Registration of Trademark for logo and names
• Fire Safety license
• Trade license
• Lease or Rent Agreement for the incorporated company.
The process of registration of a company in India by a foreign national is also tweaked and the entire process has undergone changes. Things have been made a bit simple but the expert legal advice of a reputed FDI Attorney cannot be ruled out.
Conclusion
The filing of an FDI report is simple and occurs when the funds have been received. As a result, Foreign Citizens and Non-Resident Indians will have a far easier way establishing a business in India without much procedure involved. The government also supports and promotes incorporation of foreign companies in India as part of “Make in India” initiative.
Authored By: Adv. Anant Sharma & Afsana Khan