Indian Subsidiary Company Setup, compliant from day one

What is Indian Subsidiary Company Setup?

Indian Subsidiary Company Setup is the process of incorporating a company in India that a foreign parent owns or controls. In most cases the subsidiary is a private limited company, which gives the parent limited liability, a separate legal identity for the Indian business and a structure that banks, customers and regulators understand. A company is a subsidiary when another company holds more than half of its voting power or controls its board. BizSetups Consulting prepares and files every form online.

Subsidiary vs branch office

A branch or liaison office is an extension of the foreign company, so the parent remains directly liable for what happens in India. A subsidiary is a separate entity. If you plan to hire a team, sign local contracts, hold property or invoice Indian customers for the long term, a subsidiary is usually the cleaner route. Our page on foreign company setup in India compares all entry routes side by side.

Is 100% foreign ownership allowed?

In most sectors, yes. Foreign investment is allowed up to 100% under the automatic route, which means no prior government approval. Some sectors have caps, some need government approval and a few are prohibited. Investors from countries that share a land border with India need government approval under current policy. This depends on sector and FDI policy, and the rules change from time to time, so we check them for your activity before we file.

Requirements for a private limited subsidiary

• At least two directors, one of whom is resident in India (182 days or more in the previous year).
• At least two shareholders. The parent usually holds nearly all shares and a group company or nominee holds the rest.
• A Digital Signature Certificate and a Director Identification Number for each director.
• A registered office address in India.
• A company name ending in Private Limited, approved on the MCA portal.

Foreigners can be directors. The resident director rule is why many foreign parents appoint a trusted Indian executive or professional. See our guide to private limited company registration for the base requirements that every subsidiary follows.

Step-by-step incorporation and RBI reporting

The incorporation runs on the portal of the Ministry of Corporate Affairs. We reserve the name, arrange digital signatures, draft the MOA and AOA, and file the integrated incorporation form that also covers DIN, PAN and TAN. When the Certificate of Incorporation arrives, the parent remits the subscription money to the new Indian bank account. The company then reports the foreign investment to the RBI through its authorised dealer bank. Share pricing follows FEMA pricing guidelines, and the filings must be made within the time the rules allow. Our RBI compliance consultancy team manages this stage.

Documents required for subsidiary registration

From the parent we need the certificate of incorporation, a board resolution authorising the subsidiary and identity and address proof of the authorised representative. From Indian directors and shareholders we need PAN, Aadhaar or passport or voter ID and a photograph. The registered office needs a utility bill or rent agreement and a no-objection certificate from the owner. Documents signed abroad are generally notarised and apostilled.

Cost and timeline

Registration costs depend on compliance requirements and the industry sector. Government fees and stamp duty depend on the state and the authorised capital. BizSetups offers custom packages, with GST extra on professional fees, and quotes you clearly before work begins. With complete documents, incorporation takes on average 7 to 10 business days, depending on approvals.

Post-registration support

After incorporation the subsidiary needs GST registration if applicable, a bank account, books of account and a yearly compliance plan. We support this through GST consultancy, annual MCA compliance and bookkeeping and accounting. If you want cloud accounting that your parent can view, we implement Zoho Books as a Zoho partner.

Common mistakes to avoid

• Ignoring sector caps and approval conditions in the FDI policy.
• Having no resident director in place at the time of filing.
• Sending unattested or unapostilled foreign documents.
• Missing the RBI report after share allotment.
• Forgetting transfer pricing rules for dealings with the parent.

Ready to begin? Share your plan on a call and we will confirm the structure, approvals and documents you need.