By CA Rohit Lohade, KRPR & Associates · Updated May 2026 · 15 min read
Quick answer: Setting up a wholly owned subsidiary in India takes 15–20 business days once your documents are ready. The process is entirely online — you do not need to travel to India. The total first-year cost typically falls between ₹3–4 lakh (approximately GBP 3,000–4,000 or USD 3,500–5,000).
Table of Contents
- What is a subsidiary company in India?
- Is a subsidiary the right structure? — Quick verdict
- Legal requirements at a glance
- The complete step-by-step process
- Documents required — complete checklist
- Post-incorporation: first 30–90 days
- Ongoing annual compliance
- Costs — incorporation and annual
- Jurisdiction-specific notes
- Common mistakes foreign companies make
- Frequently asked questions
1. What is a Subsidiary Company in India?
A subsidiary company in India is a private limited company incorporated under the Companies Act, 2013, in which the majority of shares are held by a foreign parent company.
Under India’s Foreign Direct Investment (FDI) policy, most sectors permit 100% foreign ownership under the automatic route — meaning no prior government approval is required. The Indian subsidiary operates as a separate legal person under Indian law, with its own PAN, bank account, employees, and compliance obligations.
It is distinct from:
- A branch office — an extension of the foreign company itself, not a separate entity, carrying the parent’s liability
- A liaison office — cannot earn revenue; limited to market research or representation
- A project office — a temporary entity for a specific contract only
For the vast majority of foreign companies — technology centres, back offices, manufacturing units, or trading entities — the private limited subsidiary is the correct structure.
→ Full comparison: Subsidiary vs Branch Office vs Liaison Office
2. Is a Subsidiary the Right Structure? — Quick Verdict
| Your situation | Recommended structure |
|---|---|
| Setting up a development, engineering, or back-office team | ✅ Subsidiary |
| Trading — buying from Indian manufacturers, selling to distributor | ✅ Subsidiary |
| Hiring 8+ people in India long-term | ✅ Subsidiary |
| Building proprietary IP or software in India | ✅ Subsidiary (not EOR) |
| Invoicing Indian customers directly | ✅ Subsidiary (EOR cannot invoice) |
| Testing the market with 1–3 hires for under 12 months | Consider EOR first |
| Conducting market research only | Liaison office |
| Executing a single specific project contract | Project office |
3. Legal Requirements at a Glance
| Requirement | Detail |
|---|---|
| Entity type | Private Limited Company |
| Minimum shareholders | 2 |
| Minimum directors | 2 |
| Resident director | At least 1 director must reside in India for 182+ days per financial year (Section 149(3), Companies Act 2013) |
| Foreign ownership | Up to 100% in most sectors — automatic FDI route |
| Minimum paid-up capital | No statutory minimum for most sectors |
| Registered office | Required — virtual office address is acceptable |
| Apostille on foreign documents | Required for all countries under the Hague Convention (US, UK, EU, Singapore, Australia) |
| Typical setup timeline | 15–20 business days (post apostille) |
4. The Complete Step-by-Step Process
The incorporation process in India is fully digital. All filings are made on the Ministry of Corporate Affairs (MCA) portal. Here is every step in sequence.
Step 1 — Prepare and apostille your parent company documents
Time required: 5–10 business days (depends on apostille processing in your country)
Before filing anything in India, your foreign parent company documents must be notarised and apostilled (for Hague Convention countries) or notarised and consularised (for non-Hague countries).
Documents required from the parent company:
- Certificate of Incorporation of the foreign parent company
- Memorandum and Articles of Association (or equivalent constitutional document)
- Board Resolution authorising the Indian subsidiary setup (we prepare this template)
- Latest audited financials or certificate of good standing
- Proof of registered address of the foreign company
⚠ Important: This step is the most common cause of delays. Start the apostille process in your home country before anything else.
Step 2 — Appoint directors and obtain Digital Signature Certificates (DSC)
Time required: 3–5 business days
Every director must obtain a Digital Signature Certificate (DSC) — used for all MCA filings. The application is completed online via video verification. Directors do not need to travel to India.
Documents required per director (foreign nationals):
- Passport (mandatory)
- Overseas address proof (utility bill or bank statement, dated within 3 months)
- Email address and Indian mobile number
On the resident director: Indian company law requires at least one director who has stayed in India for 182+ days during the financial year. Foreign companies without India-based founders typically appoint a nominee resident director — a professional who fulfils this requirement without carrying any commercial authority.
→ Resident Director Services in India
Step 3 — Reserve the company name
Time required: 2–4 business days
The company name is reserved through Part A of the SPICe+ form on the MCA portal. You may submit up to two name options per application. Once approved, the name is reserved for 20 days, extendable to 60 days.
Naming tip: The foreign parent name can be used — e.g. Gantrail India Private Limited, Siemens India Private Limited.
Step 4 — File the SPICe+ incorporation form with MCA
Time required: 7–10 business days
SPICe+ (Simplified Proforma for Incorporating Company Electronically) is a consolidated form that covers:
- Company incorporation
- DIN (Director Identification Number) allotment
- PAN and TAN issuance
- EPFO and ESIC registration
- Professional Tax registration (state-specific)
Alongside SPICe+, you file:
- INC-33 — eMemorandum of Association (MOA)
- INC-34 — eArticles of Association (AOA)
- AGILE-Pro — GST registration, EPFO, ESIC, bank account
On approval, the MCA issues the Certificate of Incorporation (CIN), along with PAN and TAN. Your Indian company now legally exists.
Step 5 — Open the corporate bank account
Time required: 10–15 business days
| Bank | Notes |
|---|---|
| HDFC Bank | Fast account opening; strong internet banking for foreign operations |
| ICICI Bank | Excellent international wire capability; widely used |
| HSBC India | Preferred by UK and European companies — global relationship banking |
| Standard Chartered | Preferred by Singapore and SE Asian parent companies |
| Kotak Mahindra | Competitive for fintech and startup entities |
Bank account opening can be done remotely — the bank sends a representative to directors in their home country for KYC and video verification.
Step 6 — Remit share capital from the parent company
Time required: 2–5 business days
The foreign parent remits initial share capital via SWIFT wire transfer. The bank issues a Foreign Inward Remittance Certificate (FIRC) confirming receipt. This is a critical document for your FEMA filing.
There is no statutory minimum capital. We recommend ₹1 lakh (approx. GBP 1,000) as initial share capital.
Step 7 — File FC-GPR with RBI (30-day deadline — do not miss this)
Time required: File within 30 days of share allotment
After shares are allotted, the company must report the foreign investment to the Reserve Bank of India through the FIRMS portal using Form FC-GPR.
Missing the 30-day deadline requires a compounding application and penalties. We manage this filing as part of our standard incorporation engagement.
Step 8 — Complete post-incorporation registrations
| Registration | When required |
|---|---|
| GST registration | Turnover exceeds ₹20 lakh/year, or export of services |
| Professional Tax | All companies with employees (state-specific) |
| EPFO (PF) | When hiring employees — mandatory from day 1 |
| ESIC | Employees with salary under ₹21,000/month |
| Import Export Code (IEC) | If importing or exporting goods |
| Trade Licence | Depending on business activity and city |
| Shop & Establishment Act | All entities with a physical office |
Complete timeline summary:
| Step | Time required |
|---|---|
| Apostille of foreign documents | 5–10 business days |
| DSC for all directors | 3–5 business days |
| Company name reservation | 2–4 business days |
| SPICe+ filing and CIN | 7–10 business days |
| Bank account opening | 10–15 business days |
| Share capital remittance + FIRC | 2–5 business days |
| FC-GPR filing (RBI) | Within 30 days of allotment |
| Total (post apostille) | 15–20 business days |
5. Documents Required — Complete Checklist
From the foreign parent company (all must be apostilled)
- ☐ Certificate of Incorporation
- ☐ Memorandum & Articles of Association or equivalent
- ☐ Board Resolution authorising India subsidiary setup
- ☐ Latest audited financials or certificate of good standing
- ☐ Registered address proof
From each director — foreign nationals (apostilled)
- ☐ Passport (valid, colour copy)
- ☐ Overseas address proof — utility bill or bank statement (not older than 2 months)
- ☐ Passport-size photograph
- ☐ Email address and Indian mobile number
From Indian resident director
- ☐ PAN card
- ☐ Aadhaar card
- ☐ Address proof (bank statement or utility bill)
- ☐ Passport-size photograph
For the registered office
- ☐ NOC from property owner or rent agreement
- ☐ Utility bill (electricity bill, not older than 2 months)
6. Post-Incorporation: What You Must Do in the First 30–90 Days
Most companies believe the work is done once the CIN is issued. It is not. The first 90 days have several mandatory compliance steps with hard deadlines.
| Action | Deadline | Penalty for missing |
|---|---|---|
| FC-GPR filing with RBI | Within 30 days of share allotment | Compounding penalty — minimum ₹5,000/day |
| First Board Meeting | Within 30 days of incorporation | Fine on company and directors |
| Appoint first statutory auditor | Within 30 days of incorporation | Fine on company |
| File INC-20A (commencement of business) | Within 180 days of incorporation | ₹50,000 fine — company cannot commence business without this |
| GST registration | Within 30 days of first taxable supply | Penalties plus interest on GST liability |
| Deposit capital and open bank account | Within 180 days | Required for INC-20A |
⚠ INC-20A is the most commonly missed filing. Many foreign companies receive their Certificate of Incorporation and assume they are done. Without INC-20A, your company legally cannot commence business, sign commercial contracts, or make payments. We file this automatically as part of our post-incorporation package.
7. Ongoing Annual Compliance — What Every Foreign Subsidiary Must File
Monthly filings
| Filing | Due date |
|---|---|
| GSTR-1 (GST outward supplies) | 11th of following month |
| GSTR-3B (GST summary return) | 20th of following month |
| TDS payment | 7th of following month |
Quarterly filings
| Filing | Due date |
|---|---|
| TDS return (Form 24Q / 26Q) | 31st of month following quarter end |
| Advance tax payment (if applicable) | 15th June, September, December, March |
Annual filings
| Filing | Due date |
|---|---|
| Income tax return | 31 October (if transfer pricing applies) · 31 July otherwise |
| Transfer pricing return (Form 3CEB) | 31 October |
| Annual Performance Report (APR) to RBI | 31 December |
| FLA return (Foreign Liabilities & Assets) to RBI | 15 July |
| Annual General Meeting (AGM) | Within 6 months of financial year end |
| Annual return (Form MGT-7) to MCA | Within 60 days of AGM |
| Financial statements (Form AOC-4) to MCA | Within 30 days of AGM |
| Statutory audit completion | Before AGM |
| Director KYC (DIR-3 KYC) | 30 September annually |
Note: Foreign-owned entities also have two additional RBI filings — APR and FLA — that domestic Indian companies do not file. These are frequently overlooked and carry significant penalties.
→ Monthly Accounting & Compliance — how we manage this
8. Costs — Incorporation and Annual
One-time setup costs
| Item | Approx. cost (INR) | Approx. (GBP) |
|---|---|---|
| Incorporation (government fees + professional fees) | ₹1,80,000 – 2,50,000 | £1,800 – 2,500 |
| Local tax registrations (GST, PT, Trade Licence) | ₹80,000 – 1,00,000 | £800 – 1,000 |
| Accounting setup and systems | ₹40,000 – 50,000 | £400 – 500 |
| Total one-time setup | ₹3,00,000 – 4,00,000 | £3,000 – 4,000 |
Annual ongoing costs
| Service | Annual (INR) | Annual (GBP) |
|---|---|---|
| Monthly bookkeeping, GST & TDS filing | ₹5,40,000 | £5,400 |
| Statutory audit | ₹2,00,000 – 2,50,000 | £2,000 – 2,500 |
| Income tax return | ₹80,000 – 1,00,000 | £800 – 1,000 |
| Secretarial compliance (ROC, AGM, returns) | ₹60,000 – 80,000 | £600 – 800 |
| Transfer pricing (if applicable) | ₹2,50,000 – 3,00,000 | £2,500 – 3,000 |
| Nominee resident director (if required) | ₹3,00,000 | £3,000 |
→ Full cost breakdown with year-on-year projections
9. Jurisdiction-Specific Notes
The process above applies to all foreign companies. But the structuring, tax, and reporting considerations differ significantly by where your parent company is based.
For US-headquartered companies
- Structure around your Delaware, Wyoming, or California parent
- Align accounting with US GAAP for consolidation
- Transfer pricing benchmarking to IRS standards
- Analyse the India–US DTAA for your specific income streams
→ US to India Company Setup — Full Guide
For UK-headquartered companies
- Manage Permanent Establishment (PE) risk from day one
- Align reporting with UK GAAP / FRS 102
- Leverage the India–UK DTAA on dividends and fees
- Prepare for HMRC enquiries on cross-border service arrangements
→ UK to India Company Setup — Full Guide
For European (EU) companies
- Multi-jurisdiction TP compliance aligned with OECD guidelines
- EU group audit requirements typically demand IFRS format financials
- Withholding tax positions vary by country under bilateral India–EU treaties
→ Europe to India Company Setup — Full Guide
For Singapore-headquartered companies
- Leverage the India–Singapore DTAA — one of the most favourable for holding structures
- Capital gains treaty positions for Singapore holding companies
- MAS reporting obligations on cross-border fund flows
→ Singapore to India Company Setup — Full Guide
10. Common Mistakes Foreign Companies Make
Based on 15 years and 250+ subsidiary incorporations, these are the errors we see most often.
Mistake 1 — Starting the apostille process too late. The apostille process in the UK, US or EU can take 1–3 weeks. Companies that don’t start this before initiating the India process delay the entire project by weeks.
Mistake 2 — Missing the FC-GPR 30-day deadline. After shares are allotted, you have exactly 30 days to file FC-GPR with RBI. Many foreign companies are unaware this filing exists. Missing it requires a compounding application with penalties.
Mistake 3 — Not filing INC-20A. The commencement of business declaration must be filed within 180 days of incorporation. Without it, the company legally cannot commence business, sign contracts, or make payments. It is the single most commonly missed post-incorporation filing.
Mistake 4 — Choosing the wrong bank. Foreign-owned subsidiaries have significant FEMA reporting obligations and need banks with international transaction expertise. HDFC, ICICI, HSBC, and Standard Chartered are recommended. Avoid small cooperative or regional banks for this purpose.
Mistake 5 — Ignoring transfer pricing from day one. Every transaction between the Indian subsidiary and the foreign parent must be priced at arm’s length and documented. Companies that don’t structure this from incorporation face costly retroactive transfer pricing adjustments.
Mistake 6 — Treating the resident director requirement as a formality. The resident director must genuinely reside in India for 182+ days. Appointing a name without ensuring this criterion is met can make your company non-compliant under Section 149(3) of the Companies Act.
11. Frequently Asked Questions
Do I need to travel to India to set up a subsidiary?
No. The entire incorporation process is online. DSC applications are done via video verification. Bank accounts can be opened remotely through bank representatives visiting directors in their home country. You can receive your Certificate of Incorporation without setting foot in India.
How long does it take to set up a subsidiary in India?
15–20 business days from the date all apostilled documents are received. The most common delay is the apostille process in the parent company’s home country, which can take 1–3 weeks. Total elapsed time from start to operational bank account is typically 5–8 weeks.
Can a foreign company own 100% of an Indian subsidiary?
Yes — in most sectors. Under India’s FDI policy, 100% foreign ownership is permitted in IT, software, professional services, manufacturing, trading, and back-office operations under the automatic route — no government approval needed. A small number of sectors (defence, media, insurance, banking) have ownership caps or require government approval.
What is the minimum capital required to set up a subsidiary in India?
There is no statutory minimum capital requirement for most sectors. In practice, we recommend starting with ₹1 lakh (approximately GBP 1,000 / USD 1,200) as initial paid-up capital. Additional working capital can be remitted later as further share capital or inter-company loans in accordance with RBI norms.
What is a resident director and do I need one?
Under Section 149(3) of the Companies Act 2013, every Indian company must have at least one director who has resided in India for 182 or more days in the previous financial year. Foreign companies without India-based founders typically appoint a nominee resident director — a qualified professional who satisfies this requirement. KRPR & Associates provides this service.
Can we use our parent company name for the Indian subsidiary?
Yes, provided the name or a very similar name is not already registered in India. The standard format is [Parent Company Name] India Private Limited. We check name availability before filing.
What taxes does an Indian subsidiary pay?
An Indian private limited company pays corporate tax at 25% (turnover up to ₹400 crore) or 22% under the new regime (Section 115BAA). The effective rate including surcharge and cess is approximately 25.17% under the new regime. Dividend distributions to the foreign parent are subject to withholding tax — typically 10–20% depending on the applicable DTAA.
Does the Indian subsidiary need a GST registration?
It depends on your activity. Services provided to the foreign parent that qualify as export of services are zero-rated — no GST charged. However, GST registration is mandatory if taxable turnover exceeds ₹20 lakh per year or if you provide any taxable supply within India.
What is transfer pricing and does it apply to us?
Transfer pricing rules apply to every transaction between the Indian subsidiary and the foreign parent — management fees, software licences, shared services, intercompany loans, goods transactions. If these exceed ₹1 crore in aggregate, formal documentation including a Form 3CEB signed by a CA is mandatory. Read our transfer pricing guide.
Can we set up an Indian subsidiary without hiring any employees?
Yes. There is no requirement to hire employees. Many foreign companies maintain lean Indian entities — for trading, IP holding, or nominee director arrangements — with no India-based employees. All compliance is managed externally by a CA firm like KRPR.
Ready to set up your India subsidiary?
Speak confidentially with a senior advisor. We assess your structure, identify the risks, and outline a clear path forward — at no obligation.
KRPR & Associates · Chartered Accountants · ICAI Reg. No. 139415 · Peer Reviewed · Pune, India · Practicing since 2012
About the Author
CA Rohit Lohade is a Chartered Accountant and partner at KRPR & Associates, a Pune-based CA firm specialising in India entry and compliance for foreign-owned companies. He has personally led over 150 foreign subsidiary incorporations and advises global CFOs and founders on FEMA, transfer pricing, and cross-border structuring. KRPR & Associates is an ICAI-registered, peer-reviewed firm practicing since 2012.
Can we use our US/UK company name?
Yes, provided a similar name isn’t already registered in India. We usually suggest [Brand Name] India Private Limited.
Do I need to travel to India for company registration?
No. Its a completely online process and can be dine remotely. Bank account can also be opened remotely.
Do we need a physical office before we start?
You need an address for the paperwork. Many founders start with a “Shared Space” agreement in hubs like Bangalore or Pune and move to a full office later.
Setting Up a Subsidiary: Key Compliance
- Ownership: 100% Wholly Owned Subsidiary (WOS) allowed in most sectors.
- Resident Director: Mandatory local director (182+ days stay).
- Documentation: Notarized/Apostilled parent company COI & Resolution.
- FEMA Pricing: Shares must be issued at Fair Market Value (FMV).
- Reporting: Mandatory FC-GPR filing with RBI after capital infusion.
Rohit Lohade is a Chartered Accountant and India entry specialist at KRPR & Associates. With 15+ years of experience, he has assisted 250+ international companies — including global brands — incorporate and operate in India. He currently serves as Resident Director for multiple foreign-owned Indian subsidiaries.