Compliance Requirements for Foreign Companies in India
The Companies Act, 2013, and the Companies (Registration of Foreign Companies) Rules, 2014, contain specific provisions to regulate the operations of companies incorporated outside India that have a business presence in India. These regulations are crucial for ensuring compliance and maintaining transparency in their operations within the Indian jurisdiction.
What is the Foreign Company as per Companies Act 2013?
Foreign Company [Section 2(42)]: “Foreign company” means any company or body corporate 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) conducts any business activity in India in any other manner.
Compliance for Foreign Companies
Form FC-1
This form is for filing information with the Registrar within 30 days of the establishment of a place of business in India, as required by Section 380(1) of the Companies Act, 2013.
Once the FCRA registration is granted, the validity is for a five year period. Nevertheless, it is to be noted that an application for the renewal of the FCRA registration has to be made 6 months prior to the date of expiry.
Form FC-2
This form is for filing a return containing the particulars of any alteration made or occurring in the documents delivered to the Registrar under Section 380. This return must be delivered to the Registrar within 30 days of such alteration.
Form FC-3
- This form is for filing a list of all the places of business established by the foreign company in India as on the date of the balance sheet, along with the financial statement. The form requires companies to provide detailed financial information, including:
- Balance sheet
- Profit and loss account
- Notes to accounts
- Auditors’ report
Due date for filing FC-3 form is Within 6 months of the end of the financial year
Form FC-4
- This form is for filing an annual return with the Registrar within 60 days from the last day of its financial year. The form requires companies to provide information on:
- Company details
- Business activities
- Shareholding pattern
- Directors and key managerial personnel
- Financial performance
Consequences of Non-Compliance
Failure to comply with the provisions of the Companies Act, 2013, can lead to penalties for the foreign company and its officers. These penalties may include fines and additional fines for continuing offenses.
The Companies (Fee for filings with Registrar of Companies) Rules, 2014
Normal Fees for Form FC-3 and FC-4
Rs. 6,000
Additional Fees
Period of delays | Fee applicable |
Up to 30 days | 2 times of normal fees |
More than 30 days and up to 60 days | 4 times of normal fees |
More than 60 days and up to 90 days | 6 times of normal fees |
More than 90 days and up to 180 days | 10 times of normal fees |
More than 180 days | 12 times of normal fees |
