Foreign Subsidiary Company
Registration in India — Your
Complete India Entry Solution
Expand your business to India with a fully incorporated Indian subsidiary. Mitali Tita, practising Company Secretary in Mumbai, handles your complete India entry — FDI advisory, apostilled documents, SPICe+ incorporation, FC-GPR filing, and ongoing FEMA compliance.
A foreign subsidiary company in India is an Indian company incorporated under the Companies Act 2013 in which a foreign company or foreign individual holds more than 50% of the equity shares or controls the Board of Directors. It is treated as an Indian entity for all legal, tax, and regulatory purposes — with its own CIN, PAN, and Indian bank account. A Wholly Owned Subsidiary (WOS), where the foreign parent holds 100% of the shares, is the most common structure. 100% FDI is permitted under the automatic route in most sectors, meaning no prior government approval is needed. After share allotment, the company must file FC-GPR with RBI within 30 days and an annual FLA Return by July 15.
What Is a Foreign Subsidiary Company in India?
A foreign subsidiary in India is a company incorporated under the Companies Act 2013 where the majority shareholder (holding more than 50% equity) is a foreign company, foreign individual, or NRI. It is subject to both Companies Act 2013 and FEMA (Foreign Exchange Management Act).
Unlike a Branch Office or Liaison Office — which are extensions of the foreign company — a subsidiary is a completely independent Indian legal entity. It can carry on any business activity permitted under India's FDI Policy, enter contracts, hire employees, own assets, generate revenue, and maintain complete financial records as an Indian company.
The most popular structure is a Wholly Owned Subsidiary (WOS) where the foreign parent holds 100% of shares — giving complete control over India operations while protecting the parent's own assets through limited liability separation. India's FDI Policy permits 100% foreign ownership in most sectors without any prior government approval under the Automatic Route.
FDI Automatic Route vs Government Route — Which Applies to You?
Before registering your foreign subsidiary, confirm whether your sector requires prior government approval. Most foreign companies can invest without any approval.
Apostille & Notarisation — Foreign Documents for India Subsidiary
All documents from the foreign parent company must be legally authenticated before they are accepted by MCA/ROC for incorporation. This is the most common cause of delays.
An Apostille is a form of authentication issued by a competent authority of the country of origin — verifying that a notarised document is genuine — under the Hague Apostille Convention (1961).
India is a member of the Hague Convention. For documents from countries that are also members (USA, UK, Germany, France, Singapore, Australia, Netherlands, etc.), an Apostille is sufficient. No further legalisation by the Indian Embassy/Consulate is needed.
For documents from non-Hague countries (note: UAE, Saudi Arabia, Qatar were not members but check current status), Consular Legalisation by the Indian Embassy or Consulate in the country of origin is required instead of an apostille.
Documents in a language other than English must also be officially translated into English by a certified translator and the translation itself notarised and apostilled.
Advantages of Registering a Foreign Subsidiary in India
India offers one of the world's largest consumer markets, a vast engineering talent pool, and a rapidly improving business environment — here's why a subsidiary is the right entry mode.
Operate, manufacture, sell, contract, and hire in India as a local entity — unrestricted access to India's 1.4 billion consumer market from day one.
No Indian joint venture partner required in most sectors. Retain 100% ownership, complete operational control, and full profit rights through a WOS structure.
The Indian subsidiary is a separate legal entity. Losses, debts, or lawsuits in India do not expose the foreign parent company's assets or operations.
Indian subsidiary pays corporate tax at 25% — significantly lower than the 40% rate applied to foreign company branch offices operating in India.
India's 90+ Double Tax Avoidance Agreements (DTAA) reduce withholding tax on dividends, royalties, and technical service fees — typically to 10–15% from the standard 20%.
An Indian-incorporated subsidiary qualifies for Indian government tenders and procurement — which many foreign branch offices and liaison offices cannot access.
The Indian subsidiary can raise debt independently from Indian banks and NBFCs — without the foreign parent providing guarantees, reducing cross-border financial exposure.
Create an Indian ESOP scheme to attract and retain top-tier Indian engineering, management, and technical talent — offering equity in the Indian subsidiary.
Dividends can be remitted freely to the foreign parent after deducting withholding tax (no RBI approval required). Royalties and fees also repatriable under FEMA/DTAA.
A mature Indian subsidiary can convert to a Public Limited Company and list independently on NSE/BSE — unlocking Indian public capital and providing investor liquidity.
How to Register a Foreign Subsidiary Company in India
The process combines MCA's SPICe+ route with FEMA-specific requirements unique to foreign investment. Here is the complete 10-step guide.
Verify FDI Sector Eligibility & Choose Route
Confirm your proposed India business activity is permitted under India's FDI Policy. Determine whether you fall under the Automatic Route (no prior approval — most sectors) or the Government Route (prior Ministry/DPIIT approval through FIFP portal). This is always the first step — sector and route determine whether you can proceed directly or need approval first.
🌍 FEMA Step 1 — Sector check before any document preparationObtain Government Route Approval (If Applicable)
If your sector requires Government Route approval, file an application through the Foreign Investment Facilitation Portal (FIFP) at fifp.gov.in. The relevant Ministry reviews and grants approval — typically takes 4–8 weeks. Do not remit funds or incorporate before receiving this approval for Government Route sectors. For Automatic Route sectors, skip this step entirely.
🚨 Only for Government Route Sectors — Skip for Automatic RoutePrepare & Apostille Foreign Company Documents
All foreign parent company documents must be notarised by a Notary Public and apostilled by the competent authority of the country of origin (Hague Convention countries) — or consularly legalised by the Indian Embassy for non-Hague countries. Documents: Certificate of Incorporation, MoA/AoA/Charter, Board Resolution authorising India subsidiary, and foreign directors' passport/address proof. Documents in languages other than English must also be officially translated.
📋 Apostille: Typically 5–15 working days — start this in parallelIdentify & Confirm Indian Resident Director
At least one director must be a resident of India (stayed 182+ days in India in the previous calendar year) — this is a mandatory legal requirement under Section 149(3) of Companies Act 2013. Collect full KYC: PAN Card, Aadhaar, address proof (not older than 2 months), and passport-size photograph of this individual. They will be a co-signatory on the SPICe+ form.
⚠️ Mandatory — Every Indian Company Must Have 1 Resident Indian DirectorCompany Name Search & Reservation
Search and reserve the subsidiary name on mca.gov.in. Name must be unique (not identical to existing companies), not infringe existing trademarks (check ipindiaonline.gov.in), and end with "Private Limited" (for a Pvt Ltd subsidiary). The subsidiary name can match or differ from the foreign parent's brand — this is a business decision. Reserve via RUN form (₹1,000, 1–3 days) or directly through SPICe+.
🔤 Name must end with "Private Limited" — check trademark conflicts firstObtain DSC for All Proposed Directors
All proposed directors — foreign and Indian — need a Class 3 Digital Signature Certificate (DSC). For Indian directors: obtained via Aadhaar OTP online — delivered in 1–2 days. For foreign directors: obtained using apostilled passport and foreign address proof — processed by Indian DSC certifying authorities with video verification — takes 3–7 days. DSC is mandatory for signing SPICe+, e-MoA, and e-AoA.
🔐 Foreign Director DSC: 3–7 days via video KYC processDraft MoA & AoA for the Foreign Subsidiary
Prepare the Memorandum of Association (MoA) — identifying the foreign parent as the primary shareholder, specifying the subsidiary's India business objects. Prepare the Articles of Association (AoA) — tailored for the parent-subsidiary relationship, including governance provisions, inter-company transaction policies, dividend policy, and director appointment rights. Both are filed as e-MoA and e-AoA within the SPICe+ form.
📝 AoA should reflect parent-subsidiary governance — custom drafting neededFile SPICe+ on MCA21 Portal & Receive COI
Submit SPICe+ (INC-32) with all documents: apostilled parent KYC, director KYC, e-MoA, e-AoA, registered office proof. One form handles: name approval · DIN allotment · PAN & TAN for the subsidiary · GST registration · ESIC & EPFO. ROC examines and issues the Certificate of Incorporation (COI) with CIN. PAN and TAN are also simultaneously issued.
🎉 COI issued — your Indian subsidiary is legally incorporatedOpen Indian Bank Account & Receive Foreign Investment
Open a current bank account in the subsidiary's name using: COI, PAN, GST certificate, director KYC, and authorised signatory details. The foreign parent then remits the initial investment via SWIFT to the subsidiary's Indian bank account. Obtain the FIRC (Foreign Inward Remittance Certificate) from the bank as proof of receipt. Allot equity shares to the foreign parent. File INC-20A (Commencement of Business) within 180 days of incorporation.
🏦 FIRC is mandatory evidence before FC-GPR can be filedFile FC-GPR with RBI & Annual FLA Return
Within 30 days of share allotment to the foreign parent, file FC-GPR through the subsidiary's authorised dealer (AD) bank via RBI's FIRMS portal. Attach: share allotment details, FIRC, KYC of foreign investor, share certificate, and CS/CA pricing compliance certificate. Every year, file the FLA Return with RBI by July 15. Maintain all annual ROC compliances and transfer pricing documentation.
🚨 FC-GPR within 30 days of allotment — FEMA violation if missed (penalty 3x investment)Documents Required for Foreign Subsidiary Registration in India
Foreign subsidiaries require a combination of apostilled foreign company documents, Indian director KYC, and registered office proof in India.
Official incorporation certificate of the foreign holding company — evidencing its legal existence and country of incorporation.
Notarised + ApostilledConstitutional documents of the foreign parent company confirming its registered business activities and authority to invest abroad.
Notarised + ApostilledResolution passed by the foreign parent's board authorising: India subsidiary incorporation, equity stake, authorised representative, and nominated directors.
Notarised + ApostilledValid passport of each foreign director proposed for the subsidiary's board — notarised and apostilled copy.
Notarised + ApostilledUtility bill / bank statement / government ID not older than 2 months — showing current residential address of each foreign director. Notarised and apostilled.
Notarised + ApostilledMandatory for the at least one Indian resident director required under Section 149(3). PAN must be linked to Aadhaar.
Mandatory Indian DirectorElectricity / water / telephone bill of the Indian registered office address — not older than 2 months. Can be any valid Indian address.
No Objection Certificate from the landlord or owner of the Indian registered office premises allowing use as the company's registered address.
Foreign Inward Remittance Certificate — obtained from the Indian AD bank after receiving the foreign parent's investment. Required for FC-GPR filing.
Post-Incorporation — FEMAPrior approval letter from the relevant Ministry or DPIIT — required for Government Route sectors. Must be obtained before any investment is made.
Govt. Route Sectors OnlyAnnual Compliance for a Foreign Subsidiary in India
A foreign subsidiary must comply with three layers of regulation — MCA/ROC, RBI/FEMA, and Income Tax. Mitali Tita manages all three for complete peace of mind.
Within 30 days of every share allotment to the foreign parent — via AD bank on FIRMS portal. Required each time new FDI comes in. Penalty: up to 3× investment for non-filing.
Filed by July 15 annually — covers FDI balance, outstanding ECBs, overseas investments. Mandatory as long as any foreign shareholder exists. FEMA violation if not filed.
Within 30 days of AGM. Parent must also consolidate subsidiary financials into group accounts. Penalty: ₹100/day per form for delay.
Within 60 days of AGM. Must disclose foreign parent as shareholder with exact percentage of shareholding. Penalty: ₹100/day for delay.
Mandatory by September 30 each year. For a WOS, resolutions can be passed efficiently — the parent is the sole shareholder. Video conference meetings permitted.
With proper 7-day notice, agenda, and signed minutes. Foreign directors can attend via video conference. No more than 120-day gap between two consecutive meetings.
Filed annually. Indian corporate tax rate: 25% (for companies with turnover ≤ ₹400 crore) or 22% under Section 115BAA regime.
Mandatory if international transactions with parent or group companies exceed ₹1 crore. CA certifies in Form 3CEB. Maintain TP documentation throughout the year.
Within 180 days of COI — open bank account, receive subscribed capital, then file. Penalty: ₹50,000 if missed. Critical first-year compliance.
All DIN holders — including foreign directors with Indian DIN — must file annual KYC by September 30. DIN deactivated if not filed (₹5,000 to reactivate).
Foreign Subsidiary vs Branch Office vs Liaison Office vs Project Office
Foreign companies have four main routes to establish India operations. A subsidiary is the most comprehensive — here's how each compares.
| Feature | Foreign Subsidiary ⭐ | Branch Office | Liaison Office | Project Office |
|---|---|---|---|---|
| Regulatory Approval | FDI Policy (Automatic/Govt) | RBI Prior Approval Required | RBI Prior Approval Required | Via AD Bank — RBI |
| Legal Entity | Separate Indian Company | Extension of Foreign Parent | Extension of Foreign Parent | Extension of Foreign Parent |
| Business Activities | Any — as per FDI Policy | Same as parent — no mfg. | Liaison only — no revenue | Specific project only |
| Revenue Generation | Yes — full operations | Yes — limited activities | No — cannot earn revenue | Project income only |
| Tax Rate in India | 25% Indian corporate tax | 40% (foreign company rate) | Not taxable — no revenue | 40% (foreign company rate) |
| DTAA Benefits | Yes — full benefits apply | Partial | Not applicable | Partial |
| Profit Repatriation | Yes — after WHT (no RBI approval) | Yes — net of tax | Not applicable | On project completion |
| FEMA Filing | FC-GPR + FLA Return annually | Annual Activity Certificate (AAC) | Annual Activity Certificate (AAC) | Annual return to RBI |
| Hire Employees | Yes — unlimited | Yes — limited | Very limited | Project-specific only |
| Duration | Perpetual | 3 years initial; renewable | 3 years initial; renewable | Project duration only |
| Government Tenders | Yes — as Indian company | Limited | No | For awarded project only |
| Best For | Full India operations — IT, manufacturing, services, retail, R&D | Export/import, consulting same as parent's activity | Market research, brand promotion — no revenue | Specific infrastructure / construction projects |
Foreign Subsidiary Company Registration — All Your Questions Answered
Comprehensive answers to every common question about FDI, apostille, FC-GPR, FLA, transfer pricing, profit repatriation, and ongoing compliance for a foreign subsidiary in India.
Exceptions where 100% is NOT permitted or requires Government Route approval:
- Multi-brand retail: 51% cap (Government Route)
- Private sector banking: 74% automatic; above that Government Route
- Defence manufacturing: 74% automatic; above that Government Route
- Prohibited: Lottery, gambling, atomic energy, tobacco manufacturing
- Certificate of Incorporation of the foreign company
- Memorandum & Articles of Association / Charter
- Board Resolution authorising India subsidiary incorporation
- Passport of each foreign director — notarised + apostilled
- Address proof of each foreign director — notarised + apostilled
- Apostille preparation (in foreign country): 5–15 working days
- DSC for foreign directors: 3–7 working days
- Company name reservation (RUN): 1–3 working days
- SPICe+ preparation and filing: 3–5 working days
- ROC processing and COI issuance: 5–10 working days
- Bank account opening: 3–7 working days
- FC-GPR filing: within 30 days of share allotment (mandatory)
Deadline: Within 30 days of the date of allotment of shares (not the date of receipt of funds).
Filed through: The Indian subsidiary's authorised dealer (AD) bank via RBI's FIRMS portal (firms.rbi.org.in).
Documents needed: Share allotment details, FIRC, KYC of foreign investor, share certificate, CS/CA pricing compliance certificate.
Penalty for non-compliance: Up to 3 times the investment amount or ₹2 lakh per day of default — one of the most severe FEMA violations.
- Corporate Tax: 25% (for companies with turnover ≤ ₹400 crore) or 22% under the new Section 115BAA regime
- Compare to Branch Office: 40% — significantly higher
- Dividend Withholding Tax: 20% (domestic) or DTAA rate (typically 10–15% for major trading partner countries) — deducted before remitting to foreign parent
- Royalties / Technical Fees: 10–15% WHT under most DTAAs
- Transfer Pricing: All inter-company transactions must be at arm's length — documented annually
- The Indian subsidiary's board declares dividend from distributable profits
- No RBI approval required for dividend repatriation
- Deduct withholding tax (TDS) at 20% domestic rate or the applicable DTAA rate — whichever is lower
- Common DTAA WHT rates on dividends: USA (15%), UK (15%), Singapore (10–15%), Netherlands (10%), Mauritius (5–15%), UAE (10%)
- Remit the net amount to the foreign parent via SWIFT through the AD bank
Transactions covered: Purchase/sale of goods and services, royalties, management fees, technical service fees, inter-company loans, corporate guarantees, IP transfers, and reimbursements.
Mandatory compliance:
- Maintain Transfer Pricing Documentation annually
- File Form 3CEB (CA-certified TP Audit Report) if international transactions exceed ₹1 crore
- Disclose RPTs in financial statements
RBI/FEMA: FC-GPR (within 30 days of each share allotment); FLA Return (July 15 annually).
ROC: AOC-4 (30 days from AGM); MGT-7/MGT-7A (60 days from AGM); AGM (by September 30); minimum 4 board meetings; DIR-3 KYC (September 30); INC-20A (180 days from incorporation — first year); DPT-3 (June 30).
Income Tax: ITR-6 (annual corporate return); Form 3CEB (if international transactions exceed ₹1 crore); advance tax; TDS filings.
GST: GSTR-1 and GSTR-3B monthly/quarterly if registered.
Other: Transfer Pricing Documentation (maintained throughout year); Secretarial Audit MR-3 (if eligible).
You May Also Need
Complete India entry support — from initial FDI advisory to ongoing FEMA, secretarial audit, and alternative entry structures like Branch and Liaison Offices.
Ready to Set Up Your India Subsidiary?
Mitali Tita manages your complete India entry — FDI sector check, apostilled document guidance, SPICe+ incorporation, FC-GPR with RBI, FLA Return, transfer pricing, and annual ROC compliance — all in one seamless, expert-managed process.
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