Indian Subsidiary Company Registration in India
Setting up an Indian subsidiary company is one of the most effective ways for foreign businesses to establish a legal presence in India. It operates as a separate legal entity under the Companies Act, 2013, offering limited liability, tax advantages, and access to one of the world's fastest-growing markets.
At IndiaFilings, we provide end-to-end assistance for Indian subsidiary company registration ā from documentation to MCA filing ā ensuring a seamless and compliant incorporation experience for global businesses.
What is the Registration of a Subsidiary Company?
The registration of a subsidiary company in India refers to the process of incorporating a company where a foreign parent company holds more than 50% of the total share capital. Under Section 2(87) of the Companies Act, 2013, a subsidiary is defined as a company in which the holding company controls the composition of the Board of Directors or exercises majority voting rights.
A wholly owned subsidiary India occurs when the parent company holds 100% of the shares. This structure gives the parent company complete operational control while ensuring the subsidiary remains a distinct legal entity in India.
Types of Indian Subsidiary Companies
- Wholly Owned Subsidiary: 100% shareholding by the foreign parent company
- Majority-Owned Subsidiary: Parent company holds more than 50% but less than 100% shares
- Private Limited Subsidiary: Most common structure for foreign subsidiary company registration in India
What is the Eligibility Criteria for Indian Subsidiary Company Registration?
Before initiating the Indian subsidiary company setup, it is essential to understand the eligibility requirements under the Companies Act and FEMA regulations.
Key Eligibility Requirements
| Criteria | Requirement |
|---|---|
| Minimum Directors | 2 Directors (at least 1 must be an Indian resident) |
| Minimum Shareholders | 2 Shareholders (can be individuals or corporate entities) |
| Foreign Shareholding | Parent company must hold more than 50% of share capital |
| Registered Office | Must have a registered office address in India |
| Minimum Share Capital | No minimum prescribed; recommended INR 1 Lakh |
| Director Age | All directors must be at least 18 years of age |
Understanding the Indian subsidiary company eligibility is a critical first step before proceeding with India business setup through the subsidiary route.
What are the Documents Required for Indian Subsidiary Registration?
Preparing the right documentation is crucial for a smooth subsidiary company incorporation India process. Below is the complete checklist of Indian subsidiary documents required for filing with the MCA:
Documents from Foreign Parent Company
- Certificate of Incorporation of the parent company (apostilled & notarised)
- Board Resolution authorising Indian subsidiary formation
- MOA & Articles of Association of parent company
- Latest audited financial statements of parent company
Documents from Directors & Shareholders
| Document Type | Indian Nationals | Foreign Nationals |
|---|---|---|
| Identity Proof | PAN Card (mandatory) | Passport (apostilled) |
| Address Proof | Aadhaar / Voter ID / Driving Licence | Passport / Bank Statement |
| Photograph | Recent passport-size photo | Recent passport-size photo |
| DSC | Digital Signature Certificate | Digital Signature Certificate |
What is the Step-by-Step Registration Process of Subsidiary Registration?
The Indian subsidiary registration process follows a structured approach under the MCA portal. Here is the complete step-by-step guide for forming a subsidiary in India:
Registration Steps
- Step 1 ā Obtain DSC: All proposed directors must apply for a Digital Signature Certificate (Class 3 DSC)
- Step 2 ā Apply for DIN: Director Identification Number (DIN) is applied through the SPICe+ Form
- Step 3 ā Name Reservation: Apply for company name approval via the MCA RUN (Reserve Unique Name) portal
- Step 4 ā Draft MOA & AOA: Prepare the Memorandum and Articles of Association aligned with subsidiary company formation objectives
- Step 5 ā File SPICe+ Form: Submit the incorporation application with all supporting documents on the MCA portal
- Step 6 ā PAN & TAN: Automatically applied through the SPICe+ integrated form
- Step 7 ā RBI & FEMA Compliance: Report Foreign Direct Investment (FDI) inflows to the RBI through the authorised dealer bank
- Step 8 ā Certificate of Incorporation: MCA issues the Indian subsidiary certificate of incorporation with a unique CIN
- Step 9 ā Open Bank Account: Open a current account in the subsidiary company's name for all transactions
What are the Laws for Understanding Indian Subsidiary Registration?
The legal framework governing Indian subsidiary company registration involves multiple legislations. Understanding these laws is essential for full compliance during and after launching a business in India through the subsidiary route.
Key Laws Governing Indian Subsidiary
| Legislation | Relevance |
|---|---|
| Companies Act, 2013 | Primary law governing incorporation, structure, and compliance of Indian subsidiary |
| FEMA, 1999 | Governs Indian subsidiary FEMA compliance for foreign exchange transactions |
| Income Tax Act, 1961 | Covers Indian subsidiary tax benefits and corporate tax obligations |
| FDI Policy (DPIIT) | Regulates Indian subsidiary FDI regulations and sectoral caps |
| RBI Guidelines | Governs Indian subsidiary RBI approval for FDI reporting and remittances |
| SEBI Regulations | Applicable if subsidiary plans to raise funds from Indian capital markets |
What is the Taxation of an Indian Subsidiary Company?
Understanding the Indian subsidiary tax benefits and obligations is key to effective business planning. An Indian subsidiary under Companies Act is treated as a domestic company for tax purposes in India, irrespective of the foreign ownership.
Key Taxation Aspects
- Corporate Tax Rate: 22% (for existing companies) or 15% (for new manufacturing companies) under the concessional tax regime
- Dividend Distribution: Dividends paid to the foreign parent company are subject to withholding tax as per the applicable DTAA (Double Taxation Avoidance Agreement)
- Transfer Pricing: All transactions between the parent company and subsidiary India must comply with Transfer Pricing regulations under the Income Tax Act
- GST Registration: Mandatory if annual turnover exceeds the prescribed threshold
- MAT (Minimum Alternate Tax): Applicable at 15% of book profits if regular tax liability is lower
- Tax Incentives: Available for subsidiaries in SEZs, manufacturing sectors, and eligible startups
What is the Authentication and Payment Process for Indian Subsidiary Company?
The Indian subsidiary company MCA filing involves a specific authentication and payment process that must be completed accurately to avoid rejections or delays.
Authentication Process
- Digital Signature Certificate (DSC): All directors must authenticate the SPICe+ form using their valid Class 3 DSC
- Notarisation & Apostille: All foreign documents must be notarized and apostilled as per the Hague Convention before submission
- Director KYC: Annual DIR-3 KYC filing mandatory for all directors to maintain active DIN status
Government Fee Structure
| Service | Approximate Fee |
|---|---|
| DSC (per director) | INR 1,000 ā INR 2,000 |
| Name Reservation (RUN) | INR 1,000 |
| SPICe+ Filing (MCA Government Fee) | Based on authorised share capital |
| Stamp Duty on MOA & AOA | Varies by State |
| Professional/Service Fee | INR 10,000 ā INR 25,000 (approx.) |
What is the Cost & Timeline for Indian Subsidiary Registration?
The overall cost and timeline for register Indian subsidiary online depends on document readiness, government processing time, and the complexity of the application.
Estimated Timeline
| Stage | Estimated Time |
|---|---|
| DSC & DIN Procurement | 2 ā 3 Business Days |
| Name Reservation | 1 ā 2 Business Days |
| Document Preparation & Filing | 3 ā 5 Business Days |
| MCA Processing & Approval | 5 ā 7 Business Days |
| Total Estimated Timeline | 10 ā 15 Business Days |
For a detailed walkthrough on costs involved, refer to our Indian subsidiary setup guide which outlines all government fees, professional charges, and post-incorporation costs.
How Can Foreign Companies Complete Indian Subsidiary Registration?
Foreign companies looking to enter the Indian market often choose the foreign company subsidiary India route due to its flexibility, limited liability, and ease of operations. The Indian subsidiary ROC filing process for foreign entities involves additional steps related to apostille, FEMA compliance, and RBI reporting.
Special Requirements for Foreign Companies
- All foreign documents must be apostilled as per the Hague Apostille Convention
- FDI inflow must be reported to RBI within 30 days of receipt via the authorised dealer bank
- Filing of FC-GPR Form with RBI after allotment of shares to foreign shareholders
- Compliance with Indian subsidiary FDI regulations under the applicable sectoral caps
- Annual filing of FC-TRS Form in case of transfer of shares between resident and non-resident shareholders
Our team of Indian subsidiary experts specialises in handling all FEMA, RBI, and MCA compliance requirements for foreign entities establishing their presence in India.
What is the Annual Compliance for an Indian Subsidiary Company?
Post-incorporation, maintaining Indian subsidiary annual compliance is mandatory under the Companies Act, 2013, Income Tax Act, and FEMA regulations. Non-compliance can result in heavy penalties and disqualification of directors.
Key Annual Compliance Requirements
| Compliance | Due Date | Form |
|---|---|---|
| Annual General Meeting (AGM) | Within 6 months of financial year end | ā |
| Filing of Annual Return | Within 60 days of AGM | MGT-7 |
| Filing of Financial Statements | Within 30 days of AGM | AOC-4 |
| Statutory Audit | Annually before AGM | ā |
| Income Tax Return | 30th November (transfer pricing cases) | ITR-6 |
| Transfer Pricing Report | 30th November every year | Form 3CEB |
| Director KYC | 30th September every year | DIR-3 KYC |
| FLA Return (RBI) | 15th July every year | FLA Return |
Why Should You Choose IndiaFilings for Indian Subsidiary Registration Services?
IndiaFilings has been assisting thousands of foreign businesses and entrepreneurs in establishing their subsidiary company in India seamlessly. Our experienced team of professionals handles every aspect of the registration process ā from initial eligibility assessment to MCA filing, RBI reporting, and post-incorporation compliance.
Whether you are a multinational corporation, a foreign startup, or an NRI investor, our dedicated team ensures your Indian subsidiary company registration is completed accurately, on time, and in full compliance with all applicable laws. We provide real-time application tracking, dedicated relationship managers, and comprehensive post-incorporation support to keep your business fully compliant at all times.
Explore our complete range of services and get started today at Indian subsidiary registration ā your trusted partner for doing business in India.
