Shelf company/turnkey solutions for India in 2024
Setting up a new company in India can take up to 5 months due to Indian Government bureaucracy, resulting in business inconvenience for Clients who urgently need a local entity for closing a deal or signing new contracts.
In order to satisfy the needs of such Clients, Healy Consultants is pleased to offer two alternative solutions to start doing business in India within shorter timeframes: the shelf company and the nominee company. Our Clients can opt to i) purchase a ready-made dormant Indian resident company with a pre-existing corporate bank account number and a corporate tax number (PAN) or ii) register a new company with Healy Consultants acting as the nominee directors and shareholders for 3 months.
Any of the above solutions will enable our Client to begin Indian operational activities within 2 months and have access to a i) company registration number ii) local multi-currency corporate bank account number and iii) tax registration number. The table below summarizes costs and timelines for each solution:
| Summary | Fast nominee company | Shelf company | New company |
|---|---|---|---|
| Our recommended order of preference | 1 | 2 | 3 |
| Estimated total cost of this engagement | US$39,465 | US$26,795 | US$27,300 |
| How soon can the company issue invoices and sign legal contracts? | Within 2 months | 1 week* | After 2 months |
| How soon can the company hire local staff? | Within 2 months | 1 week* | After 2 months |
| How soon can we provide our Client a bank account number and tax number? | Within 2 months | 1 week | Within 3 months |
| Estimated time frame to change the corporate structure? | 2 months | 3 months | 0 |
| Paid up share capital required? | US$1,065 | US$1,065 | US$1,065 |
| Resident director required? | Yes | Yes | Yes |
| Physical office required to be leased? | No | No | No |
| Draft invoice | View invoice PDF | View invoice PDF | View invoice PDF |
*: The existing directors and shareholders will need to consent the use of the company before the legal transfer of shares through a Power of Attorney to the new proposed owners.
Advantages and disadvantages of a fast corporate structure solution
| Advantages | Turnkey solution | Nominee company | |
|---|---|---|---|
| 1 | Compared to new company registration, your Firm will be able i) invoice customers faster and collect receivables ii) minimize red tape and bureaucracy iii) hire local staff faster iv) sign legal contracts; | Yes | Yes |
| 2 | Our Client does not have to travel to India for company registration and multi-currency corporate bank account opening; | Yes | Yes |
| Disadvantages | |||
| 3 | It is an expensive solution; | Yes | Yes |
| 4 | It will be necessary to amend the business activity of the company and submit the Articles of Association to the Ministry of Corporate Affairs for approval; | Yes | No |
| 5 | There is a 20% probability the bank will close down the account of the company. | Yes | Yes |
Shelf company – corporate bank account considerations
- Currently, the corporate bank account is registered in the name of the shelf company. However, if requested, Healy Consultants will assist with officially changing the company name with the ROC and thereafter, updating the bank records;
- Prior to changing the bank account signatory, Healy Consultants will disclose the following details to the bank officer: i) the company business activity ii) the corporate structure iii) the beneficial ownership and iv) expected inflows and outflow of funds;
- There is a 20% probability the new bank account signatory will be required to travel to India to meet the bank officer. However, Healy Consultants will negotiate aggressively on our Client’s behalf to secure a travel exemption;
- Healy Consultants will request our Client to submit 100% of the due diligence documents. Only after we have received all these documents via courier, will we proceed to change the bank account signatory;
- Realistically and so you can plan your business, our Client will be able to log into e-banking within 11 weeks from the time Healy Consultants supplies the corporate bank account number to you, as outlined in the table in the section below:
| Task | Time | Comment |
|---|---|---|
| Our Client signs the forms i) appointing them as the bank account signatory and ii) modifying the corporate structure and company name. Thereafter, the signed documents are couriered to Healy Consultants India office; | Week 2 | The new bank account signatory will need to visit the local bank branch for signature witnessing by a bank officer. |
| Healy Consultants will disclose the following information to the bank i) the new business activity of the company ii) the expected account inflows and outflows iii) the new corporate structure and iv) the beneficial ownership details. After receiving this information, the bank’s internal Legal and Compliance Department will commence their detailed due diligence check; | Week 4 | Depending on our Client business and nationality, there is a 25% probability the bank will reject the appointment of the new bank signatory. |
| The new bank signatory is approved by the bank’s Legal and Compliance Department. This process may take up to 4 weeks, depending on the Client’s nationality and the nature of the business; | Week 8 | After the DD check has been completed by the bank, Healy Consultants will receive confirmation affirming the appointment of our Client as the sole signatory. |
| The bank officer setups internet banking for the Client’s account and thereafter, couriers the e-banking tokens to our office. Using these devices, Healy Consultants immediately activates the internet banking; | Week 10 | Generally, the bank needs two weeks to generate the new passwords and tokens for the signatory. Most of our Clients request Healy Consultants to activate the tokens on their behalf. |
| Healy Consultants activates the e-banking and sends a courier to our Client’s preferred address; | Week 11 | Generally, it takes about 4 days for the courier to reach the Client’s preferred address. After receiving the token, our Client may ring us so we can guide them to login to the internet banking. |
| After bank signatory is changed, Healy Consultants changes the company name (if required). Our Client signs the new bank forms and couriers to Healy Consultants India office. | Week 11 | Healy Consultants officer informs the bank of the impending change to the company name. |
| Healy Consultants appoints the preferred shareholders and directors to the company. | Week 12 | Healy Consultants emails our Client and the bank the extract of the India public register. |
| Healy Consultants couriers our Client a complete company kit comprising original corporate documents. | Week 14 | The Client engagement is complete. |
Inventory of Indian shelf companies
| Price | Ownership | Company | Details | Advantages |
|---|---|---|---|---|
| US$18,540 | 100% | Consultancy services | Technical management consultancy and business consultancy including the business of legal, industrial, management, financial, cost accounting, recruitment, personnel management, inventory control, import and export; | Dormant since incorporation Bank account: DBS India |
| US$18,540 | 100% | IT services | Consultancy services addressed to business process engineering, services related to Web-Technologies, Internet and, Web-site designing, Web based and Web enabled services and applications. | Dormant since incorporation Bank account: DBS India |
| US$18,540 | 100% | General management | Technical management including industrial, management, financial, cost accounting, recruitment, personnel management, inventory control, import and export; | Dormant since incorporation Bank account: IndusInd Bank |
