Foreign Company Registration in India: Complete Compliance Guide for FC-1, FC-2, Subsidiary Incorporation and FEMA Requirements

Foreign entities seeking to establish a presence in India must navigate a layered regulatory framework spanning the Companies Act, 2013, the Companies (Registration of Foreign Companies) Rules, 2014, the Companies (Incorporation) Rules, 2014, and the FEMA regime. The following FAQ-style guide consolidates key compliance positions, documentation requirements, authority-related queries, and practical clarifications for professionals advising foreign companies and subsidiaries of foreign body corporates.

FC-1: Filing Timelines and Scope

When must Form FC-1 be filed?

A foreign company that establishes a place of business in India is required to file Form FC-1 with the Registrar of Companies, CRC within 30 days of such establishment. The statutory basis for this obligation lies under Section 380 of the Companies Act, 2013, read with Rule 3(3) of the Companies (Registration of Foreign Companies) Rules, 2014.

Is fresh registration under FC-1 required for every new project?

No. Where a foreign company already holds a Foreign Company Registration Number (FCRN), subsequent projects or changes are to be reported through Form FC-2. A fresh FC-1 becomes necessary only in situations where a new project results in the creation of a distinct and separate place of business in India.

Supporting documents at the time of FC-1 filing:

  • Charter documents of the foreign company
  • List of directors and secretary
  • Board resolution or power of attorney authorising the filing
  • Relevant sectoral approvals (e.g., RBI approval under FEMA) where applicable

Note: The National Single Window System (NSWS) assists in identifying required sectoral approvals but does not substitute MCA filings. Form FC-1 must be supported by approvals from the relevant regulatory authority wherever applicable.

FC-2: Reporting Subsequent Changes

Is Form FC-2 required every time the RBI extends approval for a Liaison Office?

Yes. Whenever the Reserve Bank of India extends the approval period for a Liaison Office, the foreign company is required to intimate such extension through Form FC-2. This is a mandatory compliance obligation and not a discretionary filing.

Annual Filings for a Foreign Branch

What annual forms are applicable to a foreign branch in India?

Foreign companies having a place of business in India are required to file:

  • Form FC-3 — Annual Accounts of the foreign company
  • Form FC-4 — Annual Return, linked to Section 384(2) and Rule 7 of the Companies (Registration of Foreign Companies) Rules, 2014

What information does FC-4 require?

FC-4 captures details pertaining to the parent company that has established the branch or liaison office in India, including particulars relating to board meetings, AGM, and directors of that parent entity. It is important to note that FC-4 is an annual return filed by the foreign company in respect of its place of business in India — not a return of the branch as a standalone entity.

What if shares of the foreign parent have no par value?

The Companies Act, 2013 does not permit the face value or par value of shares to be stated as zero. Accordingly, the nominal value field in FC-4 must be populated in accordance with the applicable share-capital framework of the parent company.

CSR Obligations for Foreign Companies

Is Form CSR-2 mandatory for a foreign bank branch operating in India?

Yes. Foreign companies are not exempt from Corporate Social Responsibility obligations if they satisfy the eligibility criteria prescribed under Section 135 of the Companies Act, 2013. CSR reporting by foreign companies is linked to their annual filing framework under FC-3 and FC-4. Section 384(2) extends Section 135 to foreign companies to the extent specified. The relevant form for CSR reporting is Form CSR-2, governed by the Companies (Corporate Social Responsibility Policy) Rules, 2014.

GIFT IFSC Branch: Sequencing of Approvals

Should a foreign company apply to MCA before or after obtaining IFSCA approval when setting up a branch in GIFT IFSC?

When a foreign company intends to establish a Branch Office in GIFT IFSC, IFSCA approval must precede the filing of Form FC-1 with MCA. IFSCA is the primary approving authority for entities operating from IFSCA, subject to specific exceptions:

  • Branch offices from land-border-sharing countries — RBI approval precedes IFSCA approval
  • Banking units — RBI approval likewise precedes IFSCA approval

Permissible Activities Under FC-1

Liaison Office

A Liaison Office is permitted to carry out only the following activities as approved by the Reserve Bank of India:

  • Representing the parent company or group companies in India
  • Promoting export and import between India and the parent/group
  • Facilitating technical or financial collaborations between Indian companies and the parent/group
  • Acting as a communication channel between the parent company and Indian companies

Important: The NIC code selected in the form must correspond strictly to activities permitted for a Liaison Office as approved by the Reserve Bank of India.

Project Office

The permissible activities for a Project Office are those specifically mentioned in the approval letter issued by the relevant authority. Activities are strictly confined to the scope of the approved project.

Branch Office