Control and regulation of foreign companies in india
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Regulation of foreign companies doing business in India under Companies Act, 2013

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HSBC office in Kolkata. Photo credits: Drgarga
This article is written by Megha Bhatia, a student of Amity Law School, Noida.
Foreign companies which undertake business activities in India or invest in Indian businesses need to comply with certain Indian laws. For example, at the time of making an investment in India or setting up an Indian office, the foreign company needs to comply with the Foreign Exchange Management Act (FEMA). FEMA also requires foreign companies in India to comply with certain procedural and filing requirements on a periodic basis when they conduct operations in India. Similarly, if the company sells products or services in India and has an office in India, it will have to comply with Indian tax laws. Similarly, it will be required to comply with local regulations if it has an office (such as a Shops and Establishment Registration).
Does the Companies Act apply to such companies, considering they are incorporated outside India?
A foreign company is a company which is incorporated outside India but having its place of business (including a share transfer or an office registered with a regulatory authority) in India. Under the Companies Act 2013, a foreign company means any company or body corporate incorporated outside India which has a place of business in India, either of its own or if it conducts business through an agent, physically / electronically or any other manner. However, all foreign companies are not required to comply with the Companies Act, it is only applicable to foreign companies where 50% or more of the paid-up share capital (calculated by including preference shares) is held by Indian entities.
Foreign companies must comply with the provisions of the Companies Act, 2013 in respect to the business as if it were a company incorporated in India.
Answer:
A foreign corporation exists as a term used in the United States to represent an existing corporation that conducts business in a state or jurisdiction other than where it existed initially incorporated.
Explanation:
“foreign company” represents any company or body corporate incorporated outside India which,— (a) includes a place of business in India whether by itself or through an agent, physically or via electronic mode; and. (b) conducts any business activity in India in another way.
Foreign companies which undertake business actions in India or invest in Indian businesses require to comply with certain Indian laws. For example, at the time of creating an investment in India or setting up an Indian office, the foreign company requires to comply with the Foreign Exchange Management Act (FEMA). FEMA also needs foreign companies in India to comply with certain procedural and filing requirements periodically when they conduct operations in India. Likewise, if the company sells products or services in India and has an office in India, it will have to concede to Indian tax laws. Similarly, it will be required to comply with local laws if it has an office (such as a Shops and Establishment Registration).
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