In today’s global economy, businesses often look beyond their home countries to expand operations, access new markets, and optimise taxes. Setting up an offshore company is one common way to achieve this.
In simple terms, an offshore company is a business entity registered in a country different from where its owners reside or conduct most of their operations. For example, a U.S. resident might register a company in India to access the Indian market or tap into the country’s tech ecosystem.
Offshore companies operate under the laws of the country where they are registered, not the country where their owners live. Many businesses choose this structure for benefits such as legal advantages, tax efficiency, easier cross-border operations, and access to international markets.
In this blog, we’ll explain offshore company registration, the legal framework in India, the process, compliance requirements, and the key benefits to help you make an informed decision.
Table of Contents
Which Acts Govern Offshore Companies in India?
If you are looking to register an offshore company in India, here are the key laws that will apply:
- Companies Act, 2013: Governs company incorporation, management, and reporting.
- Foreign Exchange Management Act (FEMA), 1999: Governs foreign investment, repatriation of profits, and forex dealings.
When foreign nationals or companies set up operations in India, they must comply with these acts.
Permissible structures for offshore companies in India include:
- Joint Ventures (JV) with an Indian partner.
- Wholly-owned subsidiaries (common in sectors like IT and services).
- Branch Offices (used by foreign companies to conduct business directly in India).
- Project Offices (for executing specific projects in India).
Requirements for Registering an Offshore Company
To legally register an offshore company in India, certain legal and structural requirements must be met:
- Company type: Choose between Private Limited Company, Public Limited Company, LLP Company, or Branch/Project Office.
- Minimum members:
- Private Limited – 2 shareholders and 2 directors (at least 1 Indian director).
- Public Limited – 7 shareholders and 3 directors (at least 1 Indian director).
- LLP – 2 designated partners (at least 1 Indian resident).
- Authorised capital: No minimum paid-up capital required for a Private Limited Company, but authorised capital must be declared.
- Local presence: Offshore companies must maintain a registered office in India and appoint a local agent if required (esp. for branch or project offices).
Related Read: Find Out Which Company Type to Register for your Business
Offshore Company Registration Process
Registering an offshore company in India typically involves the following steps:
Step 1: Obtain DSC
DSC (Digital Signature Certificate): Required to digitally sign incorporation documents.
Related Read: How to apply for a Digital Signature Certificate in India
Step 2: Reserve Company Name
File SPICe+ Part A on the Ministry of Corporate Affairs (MCA) portal to reserve the desired company name. Ensure the name complies with the Companies Act, 2013 guidelines and is not identical or too similar to existing trademarks or companies.
Step 3: Prepare Documents
Draft the following key documents:
- Memorandum of Association (MOA)
- Articles of Association (AOA)
- Declaration by Directors and Subscribers (Form INC-9)
- Consent to Act as Director (Form DIR-2)
- Identity and Address Proofs of all directors and subscribers
Have these documents duly signed and notarised (where required).
Step 4: File Incorporation Application
- Complete SPICe+ Part B on the MCA portal.
- Upload all prepared documents along with:
- Proof of registered office address in India.
- PAN and TAN application forms.
- Pay the required fees.
Step 5: Verification and Approval
- The Registrar of Companies (ROC) reviews your application and documents.
- Upon successful verification, the ROC issues the Certificate of Incorporation (COI), officially registering your offshore company in India.
Compliances by an Offshore Company in India
Once registered, offshore companies in India must follow key compliance requirements:
- Annual General Meetings (AGMs): Conducted as per the Companies Act.
- Auditor appointment: Mandatory appointment of a qualified auditor.
- Financial records: Maintain proper books of accounts and file Annual Returns (MGT-7) and Financial Statements (AOC-4).
- Tax filings: File annual Income Tax returns under the Income Tax Act.
Mandatory Registers:
- Register of Directors and Key Managerial Personnel
- Register of Members (Shareholders)
- Register of Share Transfers
- Register of Charges
- Register of Debenture Holders (if applicable)
Benefits of Registering an Offshore Company in India
India is becoming a popular choice for offshore company registration due to several advantages:
- Low capital requirements: No mandatory minimum paid-up capital for Pvt Ltd companies.
- Attractive tax regime: Corporate tax rate of ~30%, with incentives for sectors like IT/ITES.
- Double Taxation Avoidance Treaties (DTAA): India has DTAAs with 70+ countries, helping avoid double taxation on global income.
- Skilled workforce: India offers a large pool of English-speaking, technically skilled talent- ideal for tech, services, and product-based companies.
- Strong infrastructure: Cities like Bengaluru, Hyderabad, Pune, and Gurugram offer world-class tech parks, incubators, and infrastructure.
- Growing economy: India’s rapidly growing economy offers huge market potential for both B2B and B2C businesses.
Conclusion
India offers a dynamic and supportive environment for offshore company registration. It combines cost-effectiveness, a large pool of skilled talent, and a fast-growing domestic market.
In today’s connected world, businesses are no longer bound by borders. If you’re looking to expand globally, diversify your operations, or tap into India’s thriving economy, setting up an offshore company here can be a smart move. From IT services to manufacturing to eCommerce, India offers countless opportunities across industries.
Frequently Asked Questions
Frequently Asked Questions
What is offshore registration?
Offshore registration refers to the process of incorporating a company in a country other than the one where its primary operations or owners reside. It is often done to benefit from favorable tax laws, business-friendly regulations, or global expansion.
Which country is the easiest to open an offshore company?
Some of the easiest countries to open an offshore company include the British Virgin Islands (BVI), Cayman Islands, Singapore, and the UAE. These jurisdictions offer streamlined incorporation processes, low tax rates, and minimal regulatory hurdles.
What are the benefits of an offshore company?
Offshore companies offer several benefits including tax optimization, asset protection, enhanced privacy, access to international markets, and ease of global business operations.
What is the meaning of offshore company?
An offshore company is a legal business entity established in a foreign jurisdiction, typically to take advantage of local benefits such as tax efficiency, confidentiality, and ease of doing international business.
