Offshore Company Registration

Offshore Company Registration

Registering a company in any foreign country other than the country in which Head Office/Main Branch is incorporated is known as Offshore Company. In simple terms, opening a second branch to promote the company in other countries is known as Offshore Company Registration. Offshore Company Registration process includes various mandatory compliances and benefits. In this blog, we will discuss everything about an Offshore Company including its requirements and registration process.

What is Offshore Company?

The process of registering a company outside or in a foreign country other than its head office country is known as Offshore Company Registration. Offshore Company is governed by Companies Act, 2013 and FEMA (Foreign Exchange Management Act), 1999. One can start its offshore company as a private limited or public limited company. Also, Offshore Company allows Foreign Direct Investment other than the sectors restricted by the Government. Additionally, any foreign company can start their offshore company as a Joint Venture with an Indian Company, Wholly-Owned Subsidiary Company, Project Office, Branch Office, etc.

Requirement to Start Offshore Company

To start an Offshore Company (Foreign Subsidiary Company) in India there are certain requirements or eligibility criteria which should be followed. Following is the list of these requirements:

• Number of Shareholder/Director: To start an offshore company as a Private Limited Company in India, a minimum of two directors and two shareholders are required. For a Public Limited Company, 7 shareholders and 3 Directors are required; however, for a Limited Liability Partnership, 2 Designated Partners are required. Also, make sure one Director/Designated Partner must be an Indian Resident who stays 182 days or more in India.

• Capital: There is no minimum paid-up capital required for starting an offshore company. Usually, people start their company with ₹50,000 or ₹1 lakh of paid-up capital.

• MoA & AoA: For starting an offshore company, a Memorandum of Association and Article of Association is mandatory. The MoA must include all the required clauses including the name clause, object clause, etc. Also, the AoA must include all the rules and responsibilities of each individual within the company.

• Registered Office Address: The company must have a registered office address in India and a local registered agent for the registration process of the Offshore Company.

Registration Process for Offshore Company

For registering an Offshore Company in India, an entity needs to follow certain basic steps. These steps are as follows:

• Step 01: Reserve Company’s Name: Reserve the unique name for your company through the MCA Portal. Make sure to check the name availability before applying for the registration process. Once you check the name, don’t forget to reserve it.

• Step 02: Obtain DSC: Next, apply for the Digital Signature Certificate (DSC) for all the Directors/Designated Partners. For DSC, certain documents are required along with details including Aadhaar Card, PAN Card, Passport Size Photographs, Email ID, and Phone Number.

• Step 03: File Incorporation Form: Fill the incorporation form (SPICe+ Form) with all the required details and upload the necessary documents.

• Step 04: Fee Payments: Once you fill the form and upload the documents, pay the required fee to the Government along with the Stamp Duty.

• Step 06: Certificate of Incorporation: After submitting the application, government verification will be completed. Upon final approval, your Incorporation Certificate will be issued.

Major Compliances for Offshore Company

Offshore Companies must comply with all the legal provisions set by the Government. However, there are some mandatory compliances which should be fulfilled for day-to-day operations:

• Major Provision: Offshore Company must comply with the Income Tax Act, 1961 and Companies Act, 2013.

• Yearly AGM: The company must arrange an Annual General Meeting (AGM) every year. To hold the AGM, companies must hire an auditor to ensure that all financial records are maintained properly.

• Yearly Records: Maintain yearly documents including Balance Sheet, Profit & Loss Account, Auditor’s Report, and Director’s Record.

• Maintain Register: Companies must also maintain registers for Directors, Members, Secretaries, Share Ledger, and Share Transfers.

Benefits of Offshore Company

Starting an Offshore Company offers several favorable benefits, including:

• Reasonable Corporate Tax: Offshore companies are subject to a corporate tax rate of 30% along with incentives to IT & ITES Companies.

• Low Authorized Capital: Offshore Company offers a low and minimal authorized capital. Individuals can start with as little as ₹1 lakh of authorized capital.

• Double Taxation: Offshore companies offer benefits under double taxation treaties, helping avoid paying taxes twice on the same income.

• Technology Infrastructure: India offers excellent technology infrastructure with global IT hubs in cities like Bangalore, Pune, and Hyderabad.

• High Skill Professionals: India has a vast pool of highly skilled professionals, making it an ideal location for starting an Offshore Company.

Why Bizfoc?

Registering an offshore company requires multiple paperwork which might seem difficult for an individual. Hiring a consultant who can register an Offshore Company on your behalf will help reduce your workload. Bizfoc is one of the top consultants with a team of experienced professionals who can register your offshore company at a minimal rate. We ensure that the entire registration process is smooth and secure while providing ongoing support based on your compliance needs. Register your Offshore Company Now!

Frequently Asked Questions (FAQs)