Foreign companies expanding to India often ask the same question:
What does it cost to set up and operate an India subsidiary?
While India offers one of the most cost-efficient expansion destinations globally, companies should plan for several setup and operational costs, including company incorporation, regulatory registrations, accounting systems and ongoing compliance.
This guide explains the typical cost components involved in establishing and operating a wholly owned subsidiary in India.
One-Time Setup Costs
Company Incorporation
Foreign companies typically establish a Private Limited Company, which allows 100% foreign ownership in most sectors.
Typical costs include:
• Digital signatures for directors
• Director identification numbers
• Name reservation
• Incorporation filings
• MOA and AOA preparation
• Government filing fees
Typical professional fees:
USD 1,500 – USD 2,000
Timeline:
15–20 business days.
Regulatory Registrations
After incorporation, several registrations may be required depending on business activity.
Examples include:
• Permanent Account Number (PAN)
• Tax Deduction Account Number (TAN)
• GST registration (if applicable)
• Professional tax registration
• Import Export Code (if trading)
Typical cost range:
USD 500 – USD 1500 depending on registrations required.
Bank Account Setup
Foreign-owned companies must open a bank account in India to receive capital investment and conduct operations.
This typically involves:
• capital infusion documentation
• FEMA compliance
• bank KYC procedures
Professional support is usually required to coordinate the process.
Initial Setup Costs for Operations
After incorporation, companies typically need to establish operational systems.
Examples include:
Accounting System Setup
• chart of accounts
• GST configuration
• TDS configuration
• financial reporting templates
Payroll System Setup
• salary structure
• employee tax setup
• statutory deductions (PF, ESIC where applicable)
Typical cost range:
USD 500 – USD 1500
Monthly Compliance Costs
Operating an India subsidiary requires ongoing compliance.
Typical monthly services include:
• GST return filing
• TDS return filing
• payroll processing
• regulatory compliance support
Typical monthly cost range:
USD 300 – USD 800 depending on company size and transaction volume.
Annual Compliance Costs
Indian companies must complete several annual compliances.
Examples include:
• statutory audit
• income tax return filing
• annual ROC filings
• director KYC filings
Typical annual compliance cost:
USD 4,000 – USD 7,500 depending on company scale.
Capital Requirements
India does not require a minimum capital requirement for private limited companies.
However, most foreign subsidiaries start with USD 10,000 – USD 50,000 capital to support initial operations.
Typical Total Cost Summary
Estimated First-Year Cost
| Category | Typical Cost |
|---|---|
| Company Setup | $1,500 – $2,000 |
| Registrations | $200 – $500 |
| Monthly Compliance | $3,600 – $9,600 |
| Annual Compliance | $1,000 – $2,500 |
Typical first-year operational cost:
USD 6,000 – USD 14,000 excluding office and employee costs.
Why Foreign Companies Choose India
Key reasons global companies expand to India include:
• access to skilled talent
• large domestic market
• competitive operating costs
• strong technology and research ecosystem
Planning to Establish a Subsidiary in India?
Our team has helped 250+ foreign companies establish subsidiaries in India and manage their regulatory compliance.