NBFC To make a foreign Co. its WOS

Hi Mayuri,

Dont know exact procedure for NBFC, I have pointed out some general points hope this will add some help to your efforts,

 Establishment of Wholly Owned Subsidiary                      

Procedure to be followed:                          

1.  Conduct a Board Meeting:                    

-- pass a resolution authorizing a director to sign the MOA of WOS                          

-- Appoint a Attorney/Consultant to incorporate a company as per the host country Laws.          

-- Ensure the amount to be invested in WOS as applicable by the Indian company            

After Incorporation of WOS:                      

-- Open a Bank Account in the name of the company (WOS) in the host country                               

-- Establish Registered Office                     

-- Indian party Investment 100%, which has been subscribed to the MOA of WOS, shall be deposited in the Account opened in host country.              

2. Conduct a Board Meeting:                     

     Pass a resolution for submission of ODA to RBI through AD to remit the funds

     Ensure the FEMA regulations have been complied with i.e.                             

                1 Only Private/Public Limited companies are permitted to establish WOS in host country

                2 Investment is by way of Equity directly subscribing to the MOA of the subsidiary Company

                3 Remittance can be by way of cash  or export of goods and services

                4 Dividends, royalties etc. should be repatriated to India (to the Indian Company)

                5 Investment shall not exceed USD 50 million in a block of three financial years

                6 Same core activity shall be carried on by the WOS in the host country

                7 The Indian party has earned net profits preceding 3 financial years

                8 Investment can be made out of EEFC Account Funds or drawing Forex from AD

                9 To submit Form ODA duly completed to the AD for onward transmission to RBI

3.  Obligations of Indian Party:                   

-- Receive share certificate as an evidence of Investment in foreign entity to the satisfaction of RBI          

-- Repatriate to India all dues/receivable like dividend, royalties technical fees etc.,        

-- Submit to the RBI every year an annual performance report in Form APR in respect of  WOS outside India as stipulated by RBI        

-- Pledge of shares of WOS as security for availing of funds for itself/WOS from an AD or Public financial institution in india is allowed.          

Thanks

Jaideep Pandya    

hey,

Thanks a lot jaideeep