Overview
What a foreign subsidiary in India is
A foreign subsidiary is an Indian company in which a company registered outside India holds the shares. Most foreign groups set it up as a private limited company under the Companies Act, 2013.
In a wholly owned subsidiary, the foreign parent holds all the shares, together with a nominee where the law needs more than one shareholder. In a joint venture subsidiary, the foreign parent shares ownership with an Indian or another foreign partner.
The subsidiary is a separate Indian company. It signs its own contracts, keeps its own books and pays tax in India on its own income.
Requirements
What you need to set up an Indian subsidiary
We check each of these with you before anything is filed.
Shareholders
The foreign parent company, plus a second shareholder where needed. The parent acts through a person it authorises by board resolution.
Resident director
At least one director must be resident in India, as the Companies Act defines it. Other directors can live abroad.
Registered office in India
The company needs an address in India for official mail, with proof that it may use the premises.
Sector check
Whether foreign investment in your business needs government approval or has a limit depends on the sector. We have this checked before you invest.
Digital signatures and DIN
Directors and signatories sign the forms online with digital signature certificates. Each director needs a Director Identification Number.
Share capital from abroad
The parent sends the share money from abroad through banking channels into the subsidiary's Indian bank account.
What's included
What our foreign subsidiary support includes
Complianto professional feeContact our team for the fee for your case
Government feesExtra
- The fee depends on the structure and the number of directors and shareholders.
- We confirm the total before we start.
Foreign parent
Documents of the foreign parent
- Certificate of incorporation of the parent company
- Its charter documents, such as articles or bylaws
- Proof of the parent's registered address
- Board resolution approving the investment and naming the authorised person
Documents signed or issued abroad usually need to be notarised and then apostilled or legalised by the Indian embassy, depending on the country.
Directors
Documents of directors and the office
- Passport of each foreign director
- PAN and Aadhaar of each Indian director
- A recent address proof and photo of each director
- Proof of the registered office address and a no-objection letter from the owner
We send you the exact list for your case, including what must be attested abroad.
Process
How foreign subsidiary set-up works with Complianto
- 01
Fill the form
Tell us about the parent company, the planned shareholding and what the Indian company will do.
- 02
Structure and sector check
We confirm the structure with you, and your appointed CA/CS checks the foreign investment rules for your sector.
- 03
Documents abroad
The parent and foreign directors sign and attest their documents. We review the scans before the originals are couriered.
- 04
Name and incorporation
We apply for the name and file the incorporation forms on the MCA portal.
- 05
Bank account and capital
The company opens its Indian bank account, and the parent sends the share capital from abroad.
- 06
Investment reporting
Shares are allotted and the foreign investment is reported. We coordinate this with your appointed CA/CS.
After set-up
Running your Indian subsidiary
- After share allotmentReport the foreign investment within the time the rules allow. We coordinate with your appointed CA/CS.
- Every yearAnnual company filings, the statutory audit and the company's income tax return. See income tax return filing.
- Every yearAny yearly foreign investment reporting that applies to the company. We coordinate with your appointed CA/CS.
- From the startKeep proper books, including dealings with the parent. See bookkeeping and accounting.
- When you tradeRegister for GST when your business needs it. See GST registration.
Other routes: a foreign company can also work in India through a liaison office, a branch office or a project office instead of a subsidiary. These need separate approval and have their own limits on what they may do. Ask our team which route fits.
Can a foreign company own 100% of an Indian company?
In many sectors, yes. Some sectors need government approval or limit foreign ownership. Your appointed CA/CS checks this for your business before you invest.
Which type of company is used for a foreign subsidiary?
Usually a private limited company. It suits a business with a small number of shareholders and limits the parent's liability to its share capital.
Does the subsidiary need an Indian director?
At least one director must be resident in India under the Companies Act. That person does not have to be an Indian citizen.
Do the parent's documents need an apostille?
Documents signed or issued abroad usually need notarisation, and then an apostille or embassy legalisation, depending on the country. We tell you what applies to yours.
How does the parent send the share capital?
Through normal banking channels from abroad into the company's Indian bank account, after the company is incorporated and the account is open.
What has to be reported after the investment?
The foreign investment and the share allotment are reported under the foreign exchange rules. We coordinate this with your appointed CA/CS.
Is a subsidiary the same as a branch office?
No. A subsidiary is a separate Indian company. A branch office is part of the foreign company itself and needs its own approval.
Can the subsidiary have the same name as the parent?
It can often use a name based on the parent's name, if that name is available. We confirm the current requirement for your case before filing.
Is Complianto a government body or a CA firm?
Neither. Complianto is a compliance facilitation platform operated by Mentorcorp Private Limited. You can also apply directly on the official portal without our fee.
More services
Services for foreign-owned companies
Business Registration
Compare business structures in India.
GST Registration
Get a GSTIN for the Indian company.
Bookkeeping and Accounting
Monthly books for the subsidiary.
Income Tax Return
The company's yearly tax return.
Trademark Registration
Protect the group's brand in India.
Registered Office Change
Move the company's office later.
