Indian Subsidiary Registration
- Limited Liability
- Separate Legal Entity
- Tax Benefits
- Access to Indian Market
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An Indian subsidiary is a business entity that is owned or controlled by another company, known as the parent company. The parent company holds a controlling interest, meaning it owns more than 50% of the subsidiary’s share capital, enabling it to influence decision-making and operations.
A Wholly Owned Subsidiary (WOS) is a specific type of subsidiary where the parent company holds 100% of the share capital, giving it complete ownership and operational control.
An Indian subsidiary can be:
- Established as a new entity by the parent company.
- Acquired from an existing Indian company by purchasing a majority stake.
Foreign companies looking to expand into India often set up a subsidiary to access the fast-growing Indian market, skilled workforce, and business-friendly environment while maintaining a separate legal identity under Indian corporate laws.
Why Subsidiary Company?
Starting a subsidiary company in India is a strategic move for businesses looking to expand operations and tap into a dynamic market. India’s rapidly growing economy, skilled workforce, and business-friendly policies make it a preferred destination for both global and domestic companies.
The registration process is straightforward and can be completed online through the Ministry of Corporate Affairs (MCA) portal. With proper guidance, companies can establish their Indian subsidiary quickly and efficiently, ensuring smooth market entry and operational success.
DOCUMENT REQUIRED
Setting up an Indian subsidiary company requires various documents from the parent foreign company, directors, and registered office. Below is the detailed checklist of essential documents:
1. Identity & Address Proof of Directors and Shareholders
- Passport (Mandatory for Foreign Directors & Shareholders) (Notarized/Apostilled)
- PAN Card (Mandatory for Indian Directors & Shareholders)
- Aadhaar Card / Voter ID / Driving License (For Indian Nationals)
- Recent Address Proof (Electricity Bill / Water Bill / Bank Statement – Not older than 2 months)
2. Documents from the Foreign Parent Company
- Certificate of Incorporation of the Parent Company (Notarized/Apostilled)
- Board Resolution for Subsidiary Formation in India (Notarized/Apostilled)
- MOA & AOA of the Parent Company (Notarized/Apostilled)
- Identity Proof of the Authorized Representative of the Foreign Company (Notarized/Apostilled, if applicable)
- Details of the Nominee Shareholder (In case of a Wholly Owned Subsidiary – WOS)
3. Indian Subsidiary Company Incorporation Documents
- Memorandum of Association (MOA)
- Articles of Association (AOA)
- Declaration by Directors (Form DIR-2) (Notarized/Apostilled if the director is a non-resident)
- Declaration by Subscribers & First Directors (Form INC-9)
- Digital Signature Certificate (DSC) of Directors (Required for online filing)
- Director Identification Number (DIN) for Directors (Applied via SPICe+ Form INC-32)
- PAN Undertaking from the Foreign Company & Directors
- Authorization Letter (If signed by the representative of the foreign parent company, Notarized/Apostilled)
4. Registered Office Address Proof in India
- Rental Agreement (If the office is on rent)
- NOC (No Objection Certificate) from the Property Owner
- Latest Utility Bill (Electricity / Water / Property Tax Receipt – Not older than 2 months)
Below is a step-wise guide to the registration process:
Step 1: Name Approval
- The first step is to reserve a unique company name through the RUN (Reserve Unique Name) service on the MCA (Ministry of Corporate Affairs) portal.
- The name of the Indian subsidiary can be the same as the parent company with the addition of “India” for distinction.
- Ensure the name is not identical to existing companies or restricted under Indian law.
Step 2: Obtain Digital Signature Certificate (DSC)
- Since company registration is an online process, all proposed directors must obtain a Digital
- Signature Certificate (DSC) from a government-approved certifying authority.
- DSC is required to digitally sign incorporation documents and future compliance filings.
Step 3: Apply for Director Identification Number (DIN)
- At least two directors are required, with one director being a resident of India.
- Directors must obtain a Director Identification Number (DIN), which is applied through the SPICe+ (INC-32) form.
Step 4: Drafting MOA & AOA
- Memorandum of Association (MOA) – Defines the company’s objectives and business activities.
- Articles of Association (AOA) – Outlines internal management rules and regulations.
- Both MOA and AOA must be signed by the directors and shareholders of the subsidiary company.
Step 5: Filing Incorporation Application (SPICe+ Form INC-32)
- The incorporation application is submitted online through the MCA portal using the SPICe+ (INC-32) form.
- Along with INC-32, the following documents must be filed:
✔ MOA & AOA
✔ Declaration by Directors & Subscribers (INC-9 Form)
✔ Consent of Directors (DIR-2 Form)
✔ Board Resolution from the Parent Company (Notarized/Apostilled)
✔ Board Resolution from the Parent Company (Notarized/Apostilled)
✔ Identity & Address Proof of Directors
✔ Registered Office Address Proof (Rental Agreement & NOC from the Owner)
Step 6: Issuance of Incorporation Certificate (CIN, PAN & TAN)
- Once the ROC verifies and approves the incorporation application, the subsidiary company is issued a Certificate of Incorporation (COI).
- Along with COI, the company also receives:
✔ Corporate Identification Number (CIN)
✔ Permanent Account Number (PAN)
✔ Tax Deduction and Collection Account Number (TAN)
Step 7: Post-Incorporation Compliance
- Opening a Business Bank Account – The subsidiary must open a current account for financial transactions.
- Foreign Direct Investment (FDI) Compliance – If foreign investment is involved, the company must file:
✔ Form FC-GPR with RBI (For FDI reporting)
✔ Obtain Foreign Inward Remittance Certificate (FIRC) from the bank - GST Registration (If applicable) – Required if annual turnover exceeds ₹40 lakh (goods) or ₹20 lakh (services).
- Shop & Establishment Act Registration – Depending on state regulations.
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Frequently Asked Question
1. What are the benefits of setting up an Indian Subsidiary?
- Limited Liability – The parent company’s liability is limited.
- Separate Legal Entity – Independent operations from the parent company.
- Tax Benefits – Eligible for corporate tax incentives in India.
- Access to Indian Market – Ability to do business in India freely.
- Foreign Direct Investment (FDI) Friendly – 100% FDI allowed in many sectors.
2. What are the minimum requirements to register an Indian Subsidiary?
- At least 2 Directors (one must be an Indian resident).
- Minimum 2 Shareholders (parent company can be one).
- Registered Office Address in India.
- No minimum capital requirement.
3. How is an Indian Subsidiary taxed?
- Corporate Tax:
o 25% (if turnover < ₹400 Cr)
o 30% (if turnover > ₹400 Cr) - Dividend: No Dividend Distribution Tax (DDT), shareholders are taxed.
- GST and TDS Compliance: Based on business activity.
4. Can an Indian Subsidiary repatriate profits to the parent company?
- Dividends (subject to applicable tax).
- Royalties or Technical Fees (requires RBI approval).