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Overview

What is a Foreign Subsidiary?

A subsidiary in India gives global businesses a smart way to enter the Indian market.
Foreign Subsidiary company structure illustration for India market entry
01

Legally Incorporated in India

A foreign subsidiary is registered as an Indian company under the Companies Act, 2013, giving it legal recognition to operate in India.

02

Owned by a Foreign Entity

The parent company, registered outside India, usually owns a significant or entire (100%) stake in the Indian subsidiary.

03

Limited Liability Protection

An Indian subsidiary functions as a distinct legal entity; therefore, the parent company's liability is restricted to its investment.

04

Localized Presence, Global Control

Run localized operations in India while staying aligned with your foreign company's global strategy.

Structures

Subsidiaries you can establish in India

Foreign companies can choose from these common structures when setting up a subsidiary in India.
1

Wholly Owned Subsidiary (WOS)

  • The foreign parent company owns 100% of the Indian entity's shares.
  • Best for complete control and limited liability.
2

Joint Venture (JV)

A partnership between a foreign company and an Indian entity, sharing ownership and control.

  • Helpful when local expertise or co-investment is needed.
3

Limited Liability Partnership (LLP)

  • A flexible business structure with limited liability, allowing foreign investment
  • Ideal for service-based businesses.
4

Private Limited Company

  • A popular choice for the foreign subsidiary in India—can be wholly or partly owned by the foreign parent.

Offers flexibility, limited liability, and a separate legal identity.

5

Branch Office/Liaison Office/Project Office

  • These are non-subsidiary entities that allow foreign companies to establish a presence in India
  • Ideal for temporary operations, research, or market entry without full subsidiary setup

Expand

Why Set Up Foreign Subsidiary Company in India Now?

India is a fast-growing market with strong demand, low setup costs, and pro-business policies, making it an exciting time to set up a subsidiary there.
  • Favourable FDI rules for foreign subsidiary companies in India
  • Cost-effective Indian subsidiary registration
  • Access to skilled talent and a massive customer base
  • Strategic base for global expansion

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Pros

Advantages of Indian Subsidiary Company Registration

Establishing a foreign subsidiary in India provides multiple advantages.
  • Limited Liability for the parent company
  • 100% Foreign Ownership allowed under automatic route (for most sectors)
  • Full access to the Indian market for trading, manufacturing, and services
  • Recognition as a separate legal entity in India
  • Easier to raise funds, hire staff, and sign local contracts
  • The ability to transfer profits back to the parent company.(subject to tax laws)
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Steps

How to Register a Subsidiary Company in India

Here’s a step-by-step process for Indian subsidiary company registration.
01

Name Reservation

via RUN (Reserve Unique Name)
02

Digital Signature Certificate (DSC)

for directors and shareholders
03

Drafting of MoA & AoA

notarization & apostille for foreign nationals
04

Filing with MCA

for incorporation (SPICe+ form)
05

Issuance of Certificate of Incorporation

06

PAN, TAN & Bank Account Setup

07

GST Registration
(if applicable)

08

FDI Compliance Filing with RBI (if required)

Regulators

Regulatory Authorities for Indian Subsidiary Company Registration

When establishing a subsidiary company in India, foreign companies are required to adhere to the regulations set by multiple authorities.
  • Registrar of Companies (ROC) – For incorporation and corporate filings
  • Reserve Bank of India (RBI) – For compliance with foreign investment (FDI) rules
  • Ministry of Corporate Affairs (MCA) – Governs company law and regulations
  • Income Tax Department – For PAN, TAN, TDS, and tax compliance
  • Goods & Services Tax (GST) Authorities – For indirect tax registration and filings
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What we do

End-to-End Setup & Support Services

from registration to ongoing compliance. Comprehensive solution for foreign companies, foreign nationals, and NRIs looking to set up a subsidiary company in India

Company Formation Services

  • Name reservation & Indian subsidiary registration
  • Assistance with opening an Indian bank account
  • Support in obtaining domestic registrations, business licenses, and permits
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End-to-end Foreign Subsidiary company formation services

Operational & Compliance Support

  • Accounting, Payroll, Taxation, Secretarial Compliances
  • Setup of customized management reporting systems
  • Assistance with annual account audits
  • Ongoing support for all foreign subsidiary company compliances in India, including tax filings and legal obligations
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Foreign Subsidiary operational and compliance support services
With us, setting up an Indian subsidiary of a foreign company is simple and fully compliant.
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Need

Requirements for Foreign Subsidiaries setup in India

01

At least one Indian Resident Director

02

Registered office address in India

03

Minimum two shareholders

With Finguru, launching your Public Limited Company in India is easier, faster, and fully compliant.

We've got you

Compliance Requirements for Indian Subsidiary Registration

Once your foreign subsidiary in India is registered, these compliance requirements apply

Mandatory

  • ROC Filings (Annual returns, financials)
  • Appointment of Auditor within 30 days
  • Filing of Income Tax Returns
  • TDS Returns (if applicable)
  • Annual Board Meetings and maintenance of statutory registers

As Required

  • GST Returns (if registered)
  • Transfer Pricing Documentation
  • Filing with RBI under FEMA
  • ESI, EPF, Professional Tax (if applicable)
We offer complete compliance and operational support so you stay focused on growth, not red tape.

Looking beyond incorporation?

Finguru as Your Back-Office Management Partner

We can act as your India-based operations and compliance team, helping you build and manage your Indian business unit:
  • Hiring staff or local agencies
  • Drafting Standard Operating Procedures (SOPs)
  • Bridging communication between Indian teams and foreign management
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Structure

Business Structures for Foreign Companies in India

Choose the right setup when setting up a foreign subsidiary company in India or establishing a presence through alternate legal structures.

Nature of Business

Suitable Business Structure

Selling products or services through e-commerce platforms

Private Limited Company / Limited Liability Partnership (LLP)

Entering into a Joint Venture with an Indian company

Private Limited Company / LLP

Hiring staff and running local operations

Private Limited Company

Setting up back-office, call centers

Private Limited Company

Executing government or private projects

Project Office

Extending foreign company's business activities in India

Branch Office

Exploring the Indian market before investment

Liaison Office

Promoting parent company's business activities in India

Liaison Office

Documents

Documents Requirement

SPICE A

SPICE B

AGILE Pro

INC 9

DIR 2

PAN

TAN

Specimen Signature (EPF)

NOC

MOA

AOA

COI

Capitalization

Recommended Capital for Business Setup in India

Business Structure

Private Limited Company

Limited Liability Partnership

Branch Office / Liaison Office / Project Office

Minimum Capital Requirement

₹1,00,000 (approx. USD 1,200)
No statutory minimum
Varies based on RBI approval and project size

Notes

Recommended starting capital ₹5,00,000+ for smoother operations and credibility
Typical initial contribution ₹1,00,000 or higher
Capital depends on business activity and specific RBI regulations

Experience

Our Numbers Speak for Themselves

Companies Registered

500+

Years of Experience

10+

Foreign Subsidiaries Formed

300+

Compliance & Tax Filings

1,000+

Client Countries Served

25+

Trusted by foreign companies, NRIs, and global entrepreneurs for Indian subsidiary registration and business setup in India.

Blog

Insights & Resources

Stay informed with the latest updates, tips, and expert guidance on setting up a foreign subsidiary company in India and navigating complex compliance requirements.
Read Our Blog
Got Questions • Ask away

We've Got Answers!

What is a foreign subsidiary company under Indian law?
Under Section 2(87) of the Companies Act, 2013, a subsidiary is a company controlled by another company (the holding or parent company). A foreign subsidiary is simply a subsidiary whose parent company is incorporated outside India. The subsidiary itself is registered in India as a separate legal entity under the Companies Act and is treated as an Indian company for tax and regulatory purposes, even though it’s owned by a foreign parent.
Yes, in most sectors. India permits up to 100% foreign direct investment (FDI) in an Indian subsidiary under the automatic route, meaning no prior government approval is required. Certain sectors — such as defence, telecom, and a few others — have sectoral caps or require government approval beyond a threshold. We review your specific sector during your consultation to confirm which route applies.
A foreign subsidiary must comply with the Foreign Exchange Management Act (FEMA), 1999, primarily around how foreign investment is reported to the Reserve Bank of India (RBI). This includes filing Form FC-GPR within 30 days of allotting shares to the foreign parent, and filing annual returns such as the Foreign Liabilities and Assets (FLA) return and the Annual Performance Report (APR), where applicable. Missing these filings can result in penalties and complications with future capital infusions.
A foreign subsidiary is taxed as a domestic Indian company on its India-sourced income, since it’s a separate legal entity incorporated under the Companies Act — not as a ‘foreign company’ for tax purposes. The applicable corporate tax rate depends on the company’s turnover and whether it opts for a concessional tax regime under Sections 115BAA or 115BAB. A surcharge and 4% health and education cess apply on top of the base rate. We map out the exact applicable rate for your structure during your consultation, since this depends on turnover slabs and election choices that change your eligibility.
Yes. Profits can be repatriated as dividends, royalties, or technical fees, subject to applicable withholding tax and FEMA reporting. Repatriation must go through an Authorized Dealer bank and typically requires a CA certificate (Form 15CB) and an online declaration (Form 15CA) before the remittance is processed. Double Taxation Avoidance Agreements (DTAAs), where applicable between India and the parent company’s home country, can reduce the withholding tax on these remittances.
Yes. Regardless of how much of the company is foreign-owned, at least one director must be a resident of India as per the Companies Act, 2013. The remaining directors can be foreign nationals, including the same individuals who sit on the parent company’s board.
Yes, a foreign subsidiary registered as an Indian company can own property in India for its business operations, subject to RBI and FEMA regulations on property acquisition by entities with foreign shareholding. Restrictions are more relevant to direct property purchase by foreign individuals or foreign companies (not Indian-incorporated subsidiaries) — we clarify this distinction for your specific structure during onboarding.
Incorporation itself (name approval through Certificate of Incorporation) typically takes 10-15 working days once documents are ready. However, if directors or shareholders are based outside India, additional time is needed for document notarization and apostille, and for opening an Indian bank account, which can extend the full process to around 30-45 days depending on document readiness and the foreign national’s home country apostille process.
A wholly-owned subsidiary is a separate Indian legal entity that can conduct full business operations, sign contracts, hire staff, and repatriate profits. A branch office can carry out revenue-generating activities similar to the parent company but requires RBI approval and isn’t a separate legal entity. A liaison office can only represent the parent company — it cannot generate revenue or sign commercial contracts in India. Most foreign companies planning long-term operations in India choose a wholly-owned subsidiary for this reason.
GST registration is mandatory if the subsidiary’s turnover crosses the prescribed threshold (currently ₹40 lakhs for most goods suppliers and ₹20 lakhs for most service providers, with lower thresholds in special category states), or if the subsidiary is engaged in specific categories of supply that require registration regardless of turnover, such as inter-state supply. We assess this as part of your post-incorporation compliance setup.
Foreign national directors and shareholders need a notarized and apostilled (or consularly attested, depending on the country) copy of their passport, proof of address, and photographs. Indian directors instead provide PAN card and Aadhaar card. If the foreign national’s home country isn’t part of the Hague Apostille Convention, documents need attestation from the Indian Embassy or Consulate in that country instead, which can add time to the process.
Yes, if the subsidiary transacts with its foreign parent or other group entities (e.g., paying for services, royalties, or goods), these are ‘international transactions’ under Section 92 of the Income Tax Act and require transfer pricing documentation to establish that pricing is at arm’s length. This is a common compliance gap for newly-registered foreign subsidiaries — we build this into your annual compliance plan from year one rather than scrambling for it at audit time.
Yes. A private limited company structure (the most common choice for foreign subsidiaries) can later be converted to a public limited company if you need to raise capital from the public, or restructured through mergers and acquisitions. Changing from a subsidiary structure to something like an LLP is more complex given FDI restrictions on LLPs in certain sectors — this is worth discussing with us before incorporation if conversion flexibility matters to your long-term plans.
Missing FEMA filings like FC-GPR can result in a Late Submission Fee (LSF) charged by the RBI, and in serious or repeated cases, can complicate future capital infusions or repatriation approvals. Missing ROC filings (like annual returns) can lead to penalties, director disqualification, and in extreme cases, the company being struck off by the Registrar of Companies. We recommend setting up an annual compliance calendar from the day of incorporation — this is part of our ongoing compliance support.

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