- Form a Company and the parent Company will hold 100% of Shares in the Company.
- The Company can take up any business in India.
- NO RBI permission.
- Will be treated as Domestic Company
- Tax Rate Slab will be 30%
Approval / Incorporation
The Company is required to obtain a Certificate of establishment of place of business in India from the Registrar of Companies (ROC).
- Can be independently promoted by Parent Company
- Can be promoted by any two people in India and then the holding of this person can be purchased by the Parent Company. (If this is the case, intimation about the transfer of share is required to be informed to Reserve Bank of India).
Typical Points about 100% Subsidiary
- The profit earned in India can only be taken away by parent Company in the form of dividend after payment of dividend tax.
- No easy exit.
- Transfer pricing issues if purchases made from sister concern.