Foreign Subsidiary

Foreign subsidiary. On the other hand with foreign corporations the finances of the foreign subsidiaries and the parent company are separate. This means that should the company incur losses the assets of the parent company will be untouched. A partially or wholly owned company that is part of a larger corporation with headquarters in another country. There is a broad category of compliances for the foreign subsidiary company in india i e.

A subsidiary is an independent company that is more than 50 owned by another firm. In cases where a parent company owns a foreign subsidiary the subsidiary must follow the laws of the country where it is incorporated and operates. Foreign subsidiary companies are incorporated under the law s of the country it is located. The foreign subsidiary acquired by a company is a legal entity separate from that of the parent or holding company.

However this rule does not always apply in all countries depending on local laws. Setting up a foreign subsidiary can often take significant time and money which often bars many foreign companies from making this investment. For example in singapore. Annual periodic and monthly return.

The subsidiary has limited liability. For example if the foreign subsidiary is a partnership the income from the partnership will flow to the parent company. A foreign subsidiary is a company in a form of private limited company that has non resident body corporate shareholder holding more than 50 of the paid up capital of such company. Of directors required are 2 out of which 1 shall be indian resident.

A subsidiary is a company with voting stock that is more than 50 controlled by another company usually referred to as the parent company or the holding company. Foreign subsidiaries located in india are essentially required to make maintain additional compliances as compared to those required from indian owned companies. The paid up capital requirement varies by country and industry but sometimes it is quite substantial.