INVESTMENT IN GERMANY THROUGH NEWLY INCORPORATED INDIAN COMPANY.

[Akhil Goyal]

Dear Professional's,

We had a client who want to do restaurant business in Germany and for that he want to incorporate a company in India.( he/she will either infuse own capital in company in the form of shares or either take loan to buy share in company initially)

After the Incorporation he/she want to invest in the Hotel Business in Germany, Either by Incorporating a subsidiary or Limited liability partnership over their to further invest in the Hotels and restaurants in Germany.

 

And for that we have initiate the process, Now we want to understand is their any kind of legal and regulatory changes came in our way. What points should we kept in mind while going through this process.

Regards, 

Adv. Akhil Goyal.

[Deepanshu Mittal]

Incorporation in India

No specific restrictions for a German client incorporating an Indian company (Pvt Ltd or LLP), even via loan-funded shares, as long as FDI norms are met if the client is foreign. Ensure compliance with Companies Act 2013, including DIN for directors and SPICe+ filing. Post-incorporation, route ODI through proper FEMA channels.

German Entity Setup

Prefer a GmbH subsidiary (minimum €25,000 share capital, €12,500 paid upfront) requiring notarized articles, German address, and commercial register entry. LLP equivalent is GmbH & Co. KG, but GmbH suits control. Non-EU shareholders need certified passports; appoint a local managing director.

Hospitality-Specific Points

Secure German permits for food safety, zoning, and environment; labor laws require works councils for 5+ employees. No recent Indian outbound restrictions for Germany; leverage India-Germany Fast Track Mechanism for issues. Consult AD bank early for remittances and legal experts for GmbH notarization.

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Warm Regards, 

CS Deepanshu Mittal

Mob: 8130710162

Email: cs.deepan...@gmail.com

[Arun Kumar Maitra]

This structure is called ODI-Oversas Direct Investment.There is no restriction to invest upto 400 p.c.of net-worth in hotel business.However,it should be permitted by the object clause in MOA to hold shares in a Foreign Company.

Moreover,it must have atleast one resident director, who will sign odi forms.

CA CS Arun Kumar Maitra 

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