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Indian Subsidiary Registration

Indian Subsidiary Company Registration is governed and administered by the Companies Act, 2013. Whenever a foreign company owns not less than 50% of the share capital of a company, then the said company is known as a Subsidiary Company.

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  • MoA , AoA, Tax ID
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  • FDI Compliance Advisory
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  • Assistance in Approval - 0% Corporate Tax
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Overview of Indian Subsidiary Registration

Foreign companies have interest to start their operations in India as it is one of the largest and fast-growing markets in the world. A Foreign National other than a citizen of Pakistan or Bangladesh or an entity incorporated outside India can make investment and can own their subsidiary company in India by acquiring shares subject to the FDI Policy of India. There is a minimum requirement of one Indian Director who must be Indian Resident and one is to be Foreign Director, which is needed for incorporation of an Indian Subsidiary Company.

Subsidiary Company Registration is governed by the Companies Act 2013. It defines a subsidiary as a company in which a foreign corporate body or parent company owns minimum 50% of the entire share capital. The parent company is the one wholly or partially having a control over a subsidiary company. Subsidiary companies must follow the laws of the country in which they are set up and running. Therefore, if the foreign subsidiary is incorporated in India, then it must follow the law in force in India.

Advantages of Indian Subsidiary Registration in India

  • Foreign Direct Investment in India

    The FDI is allowed 100% for the increasing growth of several business industries in India without any prior approval. However, in the business of Proprietorship, Partnership and LLP require prior Government approval for FDI.

  • Limited Liability

    The liability of the members and the directors are strictly limited to their shares in the company. Therefore no member or Director is responsible for any loss or financial distress if suffered by the company. The assets of personally held by Shareholders/Directors will not be at risk or not seized by any banks, creditors or government.

  • Perpetual Succession

    The perpetual succession is continued existence of the company that means any changes in members such as death, bankruptcy, exit, transfer, etc. do not affect the existence of the company.

  • Scope of Expansion

    The expansion of the business is comparatively higher as it is easy to raise the capital from any financial institutions, venture capitalist, and the investor. It has all the advantages of the Private Ltd Company, which gives more transparency.

  • Borrow funds

    The wholly-owned subsidiary company in India can borrow funds in the form of loans from the financial institutions.

  • Sue and sued

    The Indian subsidiary company has the capacity to sue and can be sued. It has its own legal capacity being a legal person.

  • Acquire property in India

    The foreign subsidiary company has an independent structure and hence, it is permitted them to buy properties in India.

Characteristics of Indian Subsidiary Companies

  • There is no requirement of prior approval for the repatriation dividend for these companies
  • Indian transfer pricing system regulation is applicable to the Indian subsidiary companies.
  • Equity, debt and other internal accruals are the available funding mechanisms.
  • It has to pay comparatively lower tax rate of 30% which in case of the foreign company has to pay tax rate of 40%.
  • The Indian Subsidiary Company is treated same as the other Indian Company, the applicability of all laws and guidelines are same and also the tax taws are same for the Indian Subsidiary
  • The dividend distribution tax is nil now as per the Union budget 2020.

Procedure of Indian Subsidiary Registration in India

Procedure of Indian Subsidiary Registration in India

Documents for Indian Subsidiary Registration

  • PAN card details of all directors and shareholders
  • Address Proof of all directors and shareholders
  • Identity Proof such as Aadhaar Card, Driving License, Voter Id of all designated directors or partners and shareholders
  • Passport and Photographs of directors and shareholders
  • DIN or Directors Identification Number of designated directors or partners
  • DSC or Digital Signature Certificate of designated directors or partners
  • (MOA) Memorandum of Association and (AOA) Article of Association of the Company
  • A No Objection Certificate (NOC) from the landlord who owns the property of the business place
  • Incorporation certificate issued by the foreign government
  • Resolution from foreign company required for opening the subsidiary company in India, mentioning the name of authorise representative
  • For residential proof such utility bills such as telephone, water, gas, or electricity bill as of the registered office

Requirements of Indian Subsidiary Registration

  • Capital:

    No minimum capital required to form a Indian Subsidiary Company in India.

  • Directors:

    Minimum two directors are required for incorporation of the Company. Atleast one should be a resident of India.

  • Shareholders:

    Indian Subsidiary Company must have minimum of two shareholders. Shareholders can be either individuals or any entity or a combination of both.

  • Equity shares:

    The Parent Company must hold 50% of total equity share capital

  • DIN:

    Director Identification Number for all Directors

Annual Compliances of Indian Subsidiary Company

  • Compliance with Companies Act, 2013
  • Compliances with Income Tax Act, 1961
  • Guidelines with MCA, Ministry of Corporate Affairs
  • FEMA guidelines
  • Annual return with the Registrar of Company (ROC)
  • Income tax return
  • Filings with the RBI, Reserve Bank of India
  • Filings with the SEBI, Securities and Exchange Board of India

How Enterslice helps you to get Indian Subsidiary Registration

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Frequently Asked Questions

Indian Subsidiary Company requires to obtain registration with due process followed by submitting all the documents. The same process is followed as of the Private Limited Company in India.

Yes as the Indian Company requires a minimum of 2 shareholders and therefore can be 100% subsidiary of the Parent Company.

The Indian subsidiaries of foreign companies can engage in any activities subject to the provisions and guidelines mentioned under the FEMA and RBI.

In One Person Company a single person is the shareholder and the same will the director, who can be an Indian resident according to Companies Act, whereas in Indian Subsidiary Company one foreign director is required. Therefore, Indian Subsidiary Company cannot be a One Person Company.

There must be requirement of minimum two shareholders and two directors, DIN for all directors but no minimum paid-up capital. The Parent Company must hold 50% of total equity share capital.

Indian Subsidiary Company Registration is a 100% online process. No need to be present physically at our office or ministry of corporate affairs. We will send our person to your home or office for document signature.

AOA refers to articles of association which defines the internal constitution of the company, and MOA defines mission, vision, business objective of the company in the long run.

No. you need not to hire a full-time CA or CS. We will offer you annual compliance package through which you will get the right advice from our team.

Usually, we register a company in 15 business days.

As Per companies act 2013, company name should be unique, and business objectives should be added to the name.

All proposed directors should provide identity proof (like Aadhar/ Passport / DL/ any other government issued ID, Utility bills as address proof, a copy, PAN Card (for Indian Nationals) and Passport (for foreign nationals). No-objection Certificate must be submitted by the owner of the registered office premises.

The DSC is a Digital Signature Certificate which is issued by the certifying authority to sign the electronic documents. DIN is a Director Identification Number. Every proposed director in a company must have a valid DIN.

A registration certificate issued by the registrar of company shall be valid throughout the life of the company.

The process to incorporate an Indian Subsidiary requires obtaining DIN and DSC, and also, there is a requirement of name approval. Thereafter, the MOA is drafted and filed within 60 days to complete the incorporation process for an Indian Subsidiary.

The documents required include proofs such as Address proof, Identity Proof, Pan Card, DIN, DSC, MOA, AOA and NOC for the quick incorporation of the Indian Subsidiary.

The incorporation process of the company will be valid until the annual fees are paid to the state where the company is incorporated.

DSC or Digital Signature Certificate is a secured digital key issued by the authorities for validating and signing the electronic documents.

DIN or Director Identification Number is a unique identification number issued in favour of the director of the company who can take decisions and act on behalf of the company.

One can start an Indian Subsidiary Company with any amount of capital. However the fees must be paid to the Government for issuing the minimum shares of Rs. 1 Lakhs during the incorporation of the company.

Indian Subsidiary Company requires to comply with FEMA Act and the guidelines of MCA. They are also required to comply with the Companies Act 2013, Income Tax Act 1961, RBI regulations and SEBI guidelines.

Yes, the NRIs or the foreign national can be a director in an Indian Subsidiary.

Yes, the NRIs or the foreigners can hold the shares in the Indian Subsidiary Company.

FDI Guidelines for an Indian Subsidiary is to check the FDI limit, must have one resident director, also have business visa and lastly all documents those are executed in a foreign territory need to be legalised by way of attestation.

The Indian Subsidiary is registered with the ROC (Registrar of Companies) by filing an application form, submitting documents and then present AOA and MOA of the company to complete the incorporation process.

The subsidiary company is that company which is owned and controlled by the parent company. The parent company owns 50% of shares in the subsidiary company.

To create a subsidiary, the parent company must hold a meeting of the board of directors and with management, where vote is given for the decision to form a subsidiary. Final resolution should be signed by the chairman of the company.

To cerate a foreign subsidiary in India, there is requirement to obtain DIN and DSC. Afterwards company requires for the approval of name. Once the approval is given submit all the valid documents with ROC. Thereafter within 60 days after the submission of documnets, the MOA and AOA are presented to complete the incorporation process.

The benefits of the subsidiary company are integration of the supply chains, risk management, diversification, and favourable tax treatment abroad.

The subsidiary companies have separate legal entity which is incorporated whereas a joint venture is formed by an agreement between two or more entities for a specific business purpose.

The subsidiary company is owned and controlled by the parent company. All the services and management is done by the parent company. The only work remain for the subsidiary company is to mange its operations and conduct of the business.

Yes, public company can have a private subsidiary.

Yes, as the parent company of the subsidiary owns at least 80 % of the stock of its subsidiary.

No, as a subsidiary company has 50 % of its stock controlled by a parent company for the purpose of liability, tax, and regulatory reasons. However, the subsidiary and parent companies remain separate legal entities.

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