Foreign Subsidiary Company
Registration in India — Your
Complete India Entry Solution

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.

Governed By
Companies Act 2013 + FEMA 1999 + FDI Policy
Subsidiary Threshold
Foreign parent holds >50% equity — WOS = 100%
Typical Form
Private Limited Company (Pvt Ltd) under Companies Act 2013
FDI Route
100% under Automatic Route in most sectors — no RBI/Govt. prior approval
Indian Resident Director
Minimum 1 mandatory under Section 149(3) — 182+ days India stay
FC-GPR Deadline
Within 30 days of share allotment — via AD Bank on FIRMS portal
FLA Return
Annually by July 15 — mandatory while FDI balance exists
Indian Tax Rate
25% corporate tax — vs 40% for Branch Office (foreign entity)
Foreign Parent Documents
Must be Notarised + Apostilled (Hague countries) or Consularly Legalised

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.

✅ Automatic Route — No Prior Approval Needed
💻
IT / Software / ITES: 100% FDI — most popular for tech companies
🏭
Manufacturing: 100% FDI in most sub-sectors
💊
Pharmaceuticals (Greenfield): 100% FDI automatic
🏗️
Infrastructure (roads, ports, airports, power): 100% FDI
🛒
E-commerce Marketplace: 100% FDI (not inventory-based)
🏨
Hospitality & Tourism: 100% FDI automatic
🏥
Healthcare / Hospitals: 100% FDI automatic
🎓
Education / EdTech: 100% FDI automatic
🔋
Renewable Energy: 100% FDI automatic
🛍️
Single-Brand Retail: 100% FDI (with local sourcing conditions)
⚠️ Government Route — Prior Approval Required
🏦
Private Sector Banking: Up to 74% automatic; above 74% — Government Route
🛡️
Defence Manufacturing: Up to 74% automatic; above 74% — Government Route
🏬
Multi-Brand Retail: 51% cap — Government Route approval mandatory
📡
Broadcasting — FM Radio / News: 26%–49% — Government Route
📰
Print Media: 26% — Government Route (news) / 100% (non-news)
💊
Pharma (Brownfield) above 74%: Government Route required
🚫
Prohibited: Lottery, gambling, chit funds, atomic energy, tobacco manufacturing — FDI not permitted
💡 FDI Policy is Updated Periodically: Always verify the current FDI Policy before making any investment decisions.
Mitali Tita conducts a thorough sector-specific FDI eligibility check as the first step before any document
preparation or incorporation begins — ensuring your India entry is fully compliant from day one.

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.

What Is Apostille & When Is It Required?

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.

🏢
Certificate of Incorporation of the foreign parent company — notarised + apostilled
📑
MoA / AoA / Charter of the foreign company — notarised + apostilled
📋
Board Resolution authorising India subsidiary incorporation — notarised + apostilled
🌏
Passport of foreign directors — notarised + apostilled (or attested copy)
🏠
Address proof of foreign directors — notarised + apostilled (not older than 2 months)
🌐
Non-English documents — notarised + apostilled + official English translation (also notarised)
🏛️
Non-Hague Convention countries → Consular Legalisation by Indian Embassy/Consulate instead of apostille

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.

🌏
Full India Market Access

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.

💯
100% Ownership Permitted

No Indian joint venture partner required in most sectors. Retain 100% ownership, complete operational control, and full profit rights through a WOS structure.

🛡️
Parent Liability Protected

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.

💰
Lower Tax Rate Than Branch Office

Indian subsidiary pays corporate tax at 25% — significantly lower than the 40% rate applied to foreign company branch offices operating in India.

📜
DTAA Benefits — Reduced Withholding Tax

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%.

🏛️
Government Contracts & Tenders

An Indian-incorporated subsidiary qualifies for Indian government tenders and procurement — which many foreign branch offices and liaison offices cannot access.

🏦
Local Borrowing Capability

The Indian subsidiary can raise debt independently from Indian banks and NBFCs — without the foreign parent providing guarantees, reducing cross-border financial exposure.

👨‍💼
Attract Indian Talent with ESOPs

Create an Indian ESOP scheme to attract and retain top-tier Indian engineering, management, and technical talent — offering equity in the Indian subsidiary.

💸
Free Profit Repatriation

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.

📈
Future IPO on Indian Exchanges

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.

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.

🏢
Certificate of Incorporation — Foreign Parent

Official incorporation certificate of the foreign holding company — evidencing its legal existence and country of incorporation.

Notarised + Apostilled
📑
MoA / AoA / Charter — Foreign Parent

Constitutional documents of the foreign parent company confirming its registered business activities and authority to invest abroad.

Notarised + Apostilled
📋
Board Resolution — Foreign Parent

Resolution passed by the foreign parent’s board authorising: India subsidiary incorporation, equity stake, authorised representative, and nominated directors.

Notarised + Apostilled
🌏
Passport — Foreign Directors

Valid passport of each foreign director proposed for the subsidiary’s board — notarised and apostilled copy.

Notarised + Apostilled
🏠
Address Proof — Foreign Directors

Utility bill / bank statement / government ID not older than 2 months — showing current residential address of each foreign director. Notarised and apostilled.

Notarised + Apostilled
🪪
PAN Card & Aadhaar — Indian Resident Director

Mandatory for the at least one Indian resident director required under Section 149(3). PAN must be linked to Aadhaar.

Mandatory Indian Director
📍
Registered Office in India — Utility Bill

Electricity / water / telephone bill of the Indian registered office address — not older than 2 months. Can be any valid Indian address.

📄
NOC from Indian Property Owner

No Objection Certificate from the landlord or owner of the Indian registered office premises allowing use as the company’s registered address.

🏦
FIRC — After Investment Receipt

Foreign Inward Remittance Certificate — obtained from the Indian AD bank after receiving the foreign parent’s investment. Required for FC-GPR filing.

Post-Incorporation — FEMA
📜
Government Route Approval Letter (If Applicable)

Prior approval letter from the relevant Ministry or DPIIT — required for Government Route sectors. Must be obtained before any investment is made.

Govt. Route Sectors Only

Annual 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.

FC-GPR
FC-GPR Filing with RBI

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.

FLA Return
Annual FLA Return — RBI

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.

AOC-4
Financial Statements — ROC

Within 30 days of AGM. Parent must also consolidate subsidiary financials into group accounts. Penalty: ₹100/day per form for delay.

MGT-7A
Annual Return — ROC

Within 60 days of AGM. Must disclose foreign parent as shareholder with exact percentage of shareholding. Penalty: ₹100/day for delay.

AGM
Annual General Meeting

Mandatory by September 30 each year. For a WOS, resolutions can be passed efficiently — the parent is the sole shareholder. Video conference meetings permitted.

Board Mtg
Minimum 4 Board Meetings / Year

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.

ITR-6
Corporate Income Tax Return

Filed annually. Indian corporate tax rate: 25% (for companies with turnover ≤ ₹400 crore) or 22% under Section 115BAA regime.

Form 3CEB
Transfer Pricing Audit

Mandatory if international transactions with parent or group companies exceed ₹1 crore. CA certifies in Form 3CEB. Maintain TP documentation throughout the year.

INC-20A
Commencement of Business (One-Time)

Within 180 days of COI — open bank account, receive subscribed capital, then file. Penalty: ₹50,000 if missed. Critical first-year compliance.

DIR-3 KYC
Annual Director KYC

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).

🚨 FC-GPR Critical Reminder: Filing FC-GPR within 30 days of share allotment
is the most time-sensitive and most commonly violated FEMA obligation for foreign subsidiaries.
Penalty for late FC-GPR filing: up to 3 times the investment amount or ₹2 lakh per day of default.
Mitali Tita monitors this deadline and files FC-GPR promptly after every capital infusion.

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.

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.

🌍 Setup & Eligibility
What is a foreign subsidiary company in India?
A foreign subsidiary company in India is an Indian company incorporated under
Companies Act 2013 in which a foreign company or foreign individual holds
more than 50% of the total equity shares or controls the Board of Directors.
It is treated as a fully Indian entity for all legal, tax, and regulatory purposes — with its
own CIN, PAN, bank accounts, and employees. A Wholly Owned Subsidiary (WOS)
is where the foreign parent holds 100% of shares. 100% FDI is permitted under
the automatic route in most sectors — making a WOS the most popular India market entry structure
for foreign companies.
Can any foreign company register a 100% subsidiary in India?
Yes — in most sectors. Any foreign company from any country can incorporate a
100% Wholly Owned Subsidiary (WOS) in India under the Automatic FDI Route —
without any prior government approval. This covers sectors like IT/software, manufacturing,
pharmaceuticals (greenfield), infrastructure, e-commerce marketplace, hospitality, and many more.

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

Mitali Tita verifies sector-specific eligibility before any incorporation begins.
What documents need to be apostilled for foreign subsidiary registration?
The following foreign parent company documents must be notarised and apostilled:

1. Certificate of Incorporation of the foreign company
2. Memorandum & Articles of Association / Charter
3. Board Resolution authorising India subsidiary incorporation
4. Passport of each foreign director — notarised + apostilled
5. Address proof of each foreign director — notarised + apostilled

Apostille is issued by the competent authority in the country of origin under the
Hague Apostille Convention — valid for India without further legalisation.
For non-Hague countries, consular legalisation by the Indian Embassy/Consulate is required instead.
Documents in languages other than English must also be officially translated into English.
Does a foreign subsidiary need an Indian director?
Yes — mandatory. Under Section 149(3) of Companies Act 2013,
every company incorporated in India must have at least one director who is a resident
of India — meaning they stayed in India for 182 days or more in the
previous calendar year. This applies to all foreign subsidiaries. The Indian resident director
must have a valid DIN. Other directors can be foreign nationals or NRIs. This requirement
ensures there is always an accountable individual within India’s jurisdiction for legal
and regulatory compliance purposes.
How long does it take to register a foreign subsidiary in India?
Typical timeline for foreign subsidiary registration in India:

• 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)

Total: 3–6 weeks from document collection to fully operational subsidiary.
The main variable is apostille processing time in the foreign country — starting this in
parallel with Indian steps reduces the overall timeline significantly.

🏦 FEMA, RBI & Tax Compliance
What is FC-GPR and when must a foreign subsidiary file it?
FC-GPR (Foreign Currency – Gross Provisional Return) is the mandatory
RBI form that an Indian company must file when it allots shares to its foreign parent or any foreign investor.

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.
What is the FLA Return and when must a foreign subsidiary file it?
The FLA (Foreign Liabilities and Assets) Return is a mandatory annual
RBI survey that Indian companies with FDI must file every year.
Filing deadline: July 15 for the preceding financial year (April 1 – March 31).
It must be filed even if no new FDI was received during the year — as long as any foreign
shareholders exist in the subsidiary (outstanding FDI balance).
The FLA covers: total FDI equity received (including retained earnings), ECBs outstanding,
and overseas direct investments.
Penalty for non-filing: ₹10,000 to ₹2 lakh under FEMA.
Mitali Tita files FLA Returns for all foreign subsidiary clients every year before the July 15 deadline.
How is a foreign subsidiary taxed in India?
A foreign subsidiary incorporated as an Indian company is taxed as an Indian company —
at Indian corporate tax rates, not at the higher foreign company rates:

• 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

Can a foreign subsidiary repatriate profits to its foreign parent?
Yes — freely permitted under FEMA. Process:

1. The Indian subsidiary’s board declares dividend from distributable profits
2. No RBI approval required for dividend repatriation
3. Deduct withholding tax (TDS) at 20% domestic rate
   or the applicable DTAA rate — whichever is lower
4. Common DTAA WHT rates on dividends: USA (15%), UK (15%),
   Singapore (10–15%), Netherlands (10%), Mauritius (5–15%), UAE (10%)
5. Remit the net amount to the foreign parent via SWIFT through the AD bank

Royalties and technical service fees are also repatriable — subject to FEMA pricing
regulations and DTAA withholding tax provisions.
What is transfer pricing and why does it apply to a foreign subsidiary?
Transfer pricing under Sections 92–92F of the Income Tax Act
requires all transactions between the Indian subsidiary and its foreign parent or group
companies to be at arm’s length price — the fair market price between
independent parties.

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

Penalty: 2% of transaction value + additional income tax on under-reported income.
What are the mandatory compliances for a foreign subsidiary in India?
Annual mandatory compliances for a foreign subsidiary:

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.

🌍 Register My India Subsidiary Now


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