HOW A DUBAI BASED COMPANY CAN OPEN A COMPANY IN INDIA
FOREIGN COMPANY 2(42)
Any entity that has been incorporated outside India, which:
(a) Has a place of business in India whether by itself or through an agent, physically or through electronic mode and
(b) Conduct any business activity in India in any other manner.
Pre-requisites of starting a private co. in India:
- Minimum two directors (One of them should be an Indian Resident)
- Minimum Two shareholder
- No Minimum Requirement of Share Capital
- Business Place in India (Can be rented or virtual Business place)
- Permissible Business Activity
Approval by company from RBI:
Under the Automatic Route, Foreign Company does not require any prior approval from the RBI for making direct investments in India.
Under the Approval Route, Foreign Company require prior approval from the RBI for making direct investment in India.
Foreign Company should make sure not to invest in prohibited sectors, these are as follow:
(1) Lottery business including government/private lottery, online lottery
(2) Gambling and betting including casinos
(3) Chit fund (except for investment made by NRIs and OCIs on non-repatriation basis)
(4) Nidhi Company
(5) Trading in Transferable Development Rights (TDR)
(6) Real Estate Business or Construction of Farm Houses
(7) Manufacturing of Cigars, cheroots, cigarillos and cigarettes, of tobacco or tobacco-substitutes
(8) Sectors not open to private sector investment like atomic energy and railway
(9) Foreign technology collaboration in any form is also prohibited for lottery business and gambling and betting activities
Comply with all the applicable provisions of FEMA and FDI policy of government of India these are as follow:
(1) Eligible investor:
Non-resident entity can invest in India subject to the FDI policy except in those sectors which are prohibited.
Bangladesh and Pakistan (citizen and entity) can invest in India only through government approval route.
(2) Eligible investee:
Indian Company (as article relates only to companies, but other entities are also mentioned there like LLP, Partnership/Proprietorship, Investment vehicle, Startup –company there are some conditions which one needs to fulfill to receive FDI for mentioned entities)
(3) Caps on investment:
Investment can be made by non-resident entity only upto amount specified in FDI policy (hence before investing check sectoral caps of industry in which one wants to invest)
(4) Fulfill entry condition (like lock in period of investment, minimum capitalization etc.) and other sector specific conditions applicable to the industry etc.
After above formality has been complied with, the foreign co. to authorize a director by board resolution for opening a company in India and take shareholder’s approval if required.
Process for opening a company:
Step 1: Decide the name for the company.
Step 2: Collect all the Documents.
(a)Digital signature certificate (DSC).
(b)Director identification number (DIN).
(c)Declaration that at least one director is resident in India.
(d)Declaration that no director is found guilty of any offence under any law.
(e)Declaration that investment is not for prohibited activities.
(f)Photograph of all the Directors and shareholders.
(g)PAN Card of all the Indian Directors and shareholders.
(h)Apostille ID Proof of all the Directors (Driving License/Passport/Voter ID).
(i)Electricity Bill or any other utility bill (not older than 2 months) of owned/rented premises for the address proof of the Registered Office.
Step 3: Drafting of AOA and MOA for the Company
Step 4: Application for registration in the prescribed form i.e. SPICe+ Form:
Spice+ form is divided in two-parts:
Part A: Apply for the name reservation of the company in Part A of the Spice+ Form. It can be used for taking the name approval of the proposed Company and also for filing Company registration in one go.
Part B: In Part B of the Form Spice+, apply for the following services:
Incorporation
DIN allotment
Issue of PAN
Issue of TAN
Issue of EPFO registration
Issue of ESIC registration
Issue of Profession Tax registration (Maharashtra)
Opening of Bank Account for the Company and
Allotment of GSTIN (if so, applied for)
Step 5: Open a Bank Account in India
HOW AN INDIAN COMPANY CAN OPEN A COMPANY IN DUBAI
By following the below mentioned procedure an Indian Company can open a company in Dubai:
Firstly, reserve a name for company and submit the registration application to the Department of Economic Development Dubai (DED).
Before registering a company, one must obtain preliminary approvals from the DED for the business activities, trade name, and identity of members.
Notarize the company’s Memorandum of Association, the applicant notarizes the MOA at DED that provides a standard MOA.
File company’s documents with the DED and obtain trade license and the Dubai Chamber of Commerce and Industry (DCCI) membership.
To obtain the Trade License and Commercial Registration Certificate, the Company must submit the following original documents to the Commercial Registry at DED, Trade License and Commercial Registration Department:
(1) The application form, signed by the director or their legal representative
(2) The memorandum of association (an original and a copy)
(3) A letter issued by the DED, approving the name of company
(4) The original letter of business approval, issued by the DED (Committee of Limited Liability Companies)
(5) Passport copies of each member
If officials find the documentation to be in order, the company name will be entered into the Commercial Register. Within 3 days after the date the company is entered in the Commercial Register, the documents will be released.
After-that, the DED forwards the following documents to the Federal Ministry of Economy for publication:
(1) Notarized memorandum of association
(2) The application for entry of the company name in the Commercial Register
(3) Extract of the entry of the company name in the Commercial Register.
After the publication, the Ministry of Economy issues its approval letter.
After the notary public notarizes the memorandum of association, a license application form is completed, signed by the authorized signatory and filed with the DED in duplicate. The DED files one copy and forwards the other to the UAE Federal Ministry of Economy.
The trade license application must be filed with the fee and the following documents with DED:
(1) The prescribed form for setting out the proposed company name
(2) The original lease for the company’s office premises
(3) The prescribed form for obtaining the Dubai Municipality Building Department’s clearance on suitability of the office premises
All business activities fall into three categories of licenses:
(1) Commercial licenses, covering all kinds of trading activity,
(2) Professional licenses, covering professions, services, craftsmen, and artisans; and
(3) Industrial licenses, establishing industrial or manufacturing activity.
Upon the conclusion of this procedure, the DED issues the original Trade License and Commercial Registration certificates.
Upon presentation of the receipts showing payment to the Ministry, publication fee and the Chamber of Commerce membership fee, the DED will issue the original trade license and certificate of commercial registration for the company and the DCCI membership.
Apply for establishment card at the Ministry of Labor UAE.
Register native workers with the Ministry of Labor UAE.
The documents required to bring along at the time of this registration are:
(1) 3 copies of employment contract
(2) A copy of employer’s passport
(3) A copy of the trading license
(4) A confirmation that the worker is a UAE citizen,
Register native workers with the General Authority for Pension and Social Security Authority UAE. Registration requires submitting the native workers’ updated salary certificates or labor contracts.
