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Company

Subsidiary Company

A Subsidiary Company is a company where another company (the holding or parent company) owns more than 50% of its share capital or controls its composition of the board of directors. Setting up an Indian subsidiary is the preferred route for foreign companies looking to establish a legal presence in India.

400+
Subsidiaries Set Up
18
Avg. Days to Incorporation
4.8 ★
Client Rating
97%
First-Attempt Approval
Service Overview

Your Gateway to India's Booming Market

India is one of the fastest-growing economies with one of the world's most liberal FDI policies. A Wholly Owned Subsidiary (WOS) or Joint Venture in India allows foreign companies to legally conduct business, hire employees, own property, and repatriate profits. The subsidiary operates as an independent Indian company but is ultimately controlled by the parent company. Under India's automatic FDI route, most sectors allow 100% foreign ownership without prior government approval — making India one of the most accessible FDI destinations globally.

Critical: Shares must be allotted within 60 days of receiving foreign funds, and the allotment reported to RBI in Form FC-GPR on the FIRMS portal within 30 days of allotment. Delays attract Late Submission Fees and FEMA compounding — file on time.

Automatic FDI Route

No prior approval in most sectors

India allows 100% FDI under the automatic route in most sectors — manufacturing, IT, retail (B2B), logistics, and more. No prior RBI or government approval is needed; just inform RBI post-investment.

Independent Legal Entity

Separate from the parent company

The Indian subsidiary is a distinct legal entity — its liabilities do not automatically flow back to the parent company. This limits the parent's exposure and creates a clean ring-fenced operation.

Tax Treaty Benefits

India's DTAA network

India has tax treaties (DTAAs) with 90+ countries. Structuring your subsidiary correctly can minimize withholding taxes on dividends, royalties, and management fees to the parent company.

Full Profit Repatriation

Repatriate dividends freely

Dividends, technical fees, and sale proceeds can be repatriated to the parent company freely after paying applicable Indian taxes — under FEMA's Liberalised Remittance Scheme provisions.

Eligibility Criteria

Who Can Set Up an Indian Subsidiary?

Any foreign company or individual can set up a subsidiary in India subject to sector-specific FDI caps and FEMA guidelines.

1

Foreign Company or Individual

Any foreign company, LLP, or individual (from a non-restricted country) can invest in and hold shares of an Indian company under FEMA regulations.

2

Permitted Sectors

Most sectors are under the automatic FDI route allowing 100% foreign ownership. Sectors like defence, retail (B2C), pharma, insurance, and media have specific FDI caps or government approval requirements.

3

At Least One Indian Resident Director

The Indian subsidiary must have at least one director who is a resident of India (182+ days in the previous financial year). This is mandatory under the Companies Act 2013.

4

Minimum 2 Directors

Like any Private Limited Company, a subsidiary needs at least 2 directors and 2 shareholders. The parent company can hold 99.99% shares and appoint nominee Indian directors.

Key Benefits

Why Set Up an Indian Subsidiary?

An Indian subsidiary offers foreign companies the best combination of legal protection, tax efficiency, and operational flexibility.

01

Legal Business Presence

Without a registered entity, foreign companies cannot own property, hire employees on Indian payroll, issue GST invoices, or participate in government tenders in India.

02

Liability Ring-Fencing

The parent company is not directly liable for the Indian subsidiary's debts, contracts, or legal disputes. Losses in India do not automatically affect the parent's books.

03

Talent & HR Access

An Indian entity can hire on Indian payroll, run HR processes, and offer ESOPs — attracting top Indian tech, operations, and management talent at competitive costs.

04

Government Contracts & Tenders

Many government procurement programs prefer or require a registered Indian entity. An Indian subsidiary makes your company eligible for these lucrative opportunities.

05

Banking & Financial Operations

Open Indian corporate bank accounts, receive payments in INR, access working capital from Indian banks, and manage payroll and vendor payments locally.

06

Make in India Benefits

Indian subsidiaries in manufacturing can avail PLI (Production Linked Incentive) schemes, MSME benefits, and state government subsidies for setting up factories.

Step-by-Step Process

How to Set Up an Indian Subsidiary

Setting up an Indian subsidiary involves MCA incorporation plus FEMA compliance. Our team handles the India side completely.

Your journey Step 1 of 6

Scroll through the steps — or skip the queue and let our experts handle every one of them for you.

Get Expert Help
1
Step 1 of 6

Determine FDI Route & Sector

Identify whether your industry allows automatic FDI or requires government approval. Confirm the sector-specific FDI cap and any conditional compliances under FEMA.

2
Step 2 of 6

Appoint Indian Resident Director

Identify a trustworthy Indian resident who will be the local director. Obtain their KYC documents and DSC. The parent company appoints nominee directors as per its internal process.

3
Step 3 of 6

Name Reservation & Incorporation

Reserve the subsidiary's name via SPICe+ Part A and file the SPICe+ Part B incorporation form. The parent company's board resolution authorising the investment and its Certificate of Incorporation (apostilled/notarised) must be attached.

4
Step 4 of 6

Allot Shares & File FC-GPR

Allot shares to the foreign parent within 60 days of receiving the remittance, then report the allotment to RBI in Form FC-GPR through the Single Master Form on the FIRMS portal within 30 days of allotment (after a one-time entity registration on FIRMS).

5
Step 5 of 6

Open Bank Account & Receive FDI

Open a current account with an Authorised Dealer (AD) bank. The parent's capital arrives as an inward remittance through banking channels; the AD bank issues the FIRC and KYC documents you will need for the FC-GPR filing.

6
Step 6 of 6

Post-Incorporation Compliances

Register for GST, PAN, TAN, and other applicable licences. Establish internal transfer pricing policies for intercompany transactions with the parent company.

Document Checklist

Documents Required for Subsidiary Registration

Foreign parent company documents must be apostilled/notarised. Indian director documents are standard KYC.

Indian Director KYC

PAN & Aadhaar

Mandatory identity and address proof for each Indian director.

Address Proof

Recent utility bill or bank statement not older than 2 months.

Photograph

Recent passport-size photograph of each director.

All foreign documents must be apostilled (for Hague Convention countries) or notarised and consularised (for non-Hague countries) before submission to Indian authorities.

Post Registration

Post-Incorporation Steps for Indian Subsidiary

After incorporation, the subsidiary must comply with both Indian company law and FEMA foreign investment regulations.

Within 30 days

FC-GPR Filing with RBI

Report the first FDI receipt to RBI via Form FC-GPR within 30 days. Shares must be issued to the foreign investor within 60 days of receiving the foreign remittance.

Ongoing

Transfer Pricing Documentation

If the subsidiary transacts with the parent company (royalties, management fees, loans), maintain proper transfer pricing documentation under the Income Tax Act to avoid TP adjustments.

Yearly

Annual FEMA & ROC Filings

File Form FC-TRS for share transfers, FCTRS for cross-border loans, and standard MCA annual returns (AOC-4, MGT-7) each year. Non-compliance attracts FEMA penalties.

Why Finace India?

Your Trusted Indian Subsidiary Partner

Setting up an Indian subsidiary means navigating FDI routes, FEMA compliance, and RBI reporting alongside standard incorporation. Our cross-border specialists handle all three.

Cross-Border Structuring

Guidance on permitted FDI sectors, automatic vs. approval routes, and holding-company documentation.

FEMA & RBI Compliance

Correct filing of FC-GPR and other RBI reporting requirements that foreign shareholding triggers.

Resident Director Sourcing

We help satisfy the mandatory Indian-resident-director requirement when your parent company has no local presence.

Post-Incorporation Setup

Bank account opening, tax registration, and transfer-pricing documentation guided from a single point of contact.

400+

Subsidiaries Set Up

18

Avg. Days to Incorporation

4.8 ★

Client Rating

97%

First-Attempt Approval

4.9 / 5from 2,400+ verified reviews
Talk to an Expert
FAQ

Frequently Asked Questions

Yes, in most sectors under the automatic FDI route. Sectors like retail (B2C), insurance, defence, and media have specific FDI caps. We review your sector before structuring the shareholding.
Yes. A Liaison Office (LO) or Branch Office can only represent the foreign parent — it cannot generate revenue in India. A subsidiary is a fully independent operating entity that can earn income, hire staff, and own assets.
There is no legal minimum FDI amount for most sectors. However, you must have enough working capital to conduct business. FEMA requires you to bring foreign funds specifically for the activities declared in the incorporation documents.
Yes. After paying applicable taxes in India, dividends and profits can be freely repatriated to the foreign parent under FEMA. There is no restriction on repatriation amount.
Yes. Any transactions between the Indian subsidiary and the foreign parent (royalties, services, loans) must be conducted at arm's length prices and documented as per Transfer Pricing rules under the Income Tax Act.

Still have questions?

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