MCA Updates the Process of Registration of Foreign Companies Operating in India

Introduction

Through a recent gazette notification[1] dated 13th August 2024, the Ministry of Corporate Affairs has updated the process of registration of foreign companies in India by encapsulating them in the Companies (Registration of Foreign Companies) Amendment Rules, 2024 and further amending the Companies (Registration of Foreign Companies) Rules 2014.

Coming into effect from 9th September 2024, Rule 3(3) of the amendment mandates the foreign companies to file a Form FC – 1 with. The Registrar, Central Registration Centre within a period of thirty days from the date of establishing a business in India. Secondly, the filing in this regard must be accompanied by the necessary and relevant documents along with an attested copy of the approval from the Reserve Bank of India as per the provisions of Foreign Exchange Management Act (FEMA) or a declaration stating that there is no need for such an approval. Additionally, coming into effect from 9th September 2024, for the word ‘Registrar’, the words ‘Registrar, Central Registration Centre’ have been substituted.

The Companies (Registration of Foreign Companies) Amendment Rules, 2024 has also inserted a new proviso under Rule 8 sub rule (1) which has provided that the documents for registration by a foreign company referred to in sub – rule (3) of the Rule 3 shall be delivered in form FC – 1 to the Registrar, Central Registration Centre. The form shall also be accompanied with such fee as prescribed under the Companies (Registration Offices and Fees) Rules, 2014 along with the documents required to be delivered for registration by a foreign company in accordance with the provisions of Sub – Section (1) of Section 380 and the application shall also be supported with an attested copy of approval from the Reserve Bank of India.

Conclusion

The present notification of the Ministry of Corporate Affairs is a significant step towards improving the ease of doing business in the country wherein the foreign entities planning to setup their businesses in India can register themselves through a simplified procedure. Additionally, this would also impact the entities who shall have to seek less approvals from the regulating entities such as RBI in order to setup their businesses in India.

Overall this step is a welcomed update in improving the ease of doing business and economic and corporate framework of the Indian laws.

A copy of the official gazette notification can be accessed here.

[1] https://www.mca.gov.in/bin/dms/getdocument?mds=nKOST6cNFJSgJGLOIBu6Yg%253D%253D&type=open