How to register a subsidiary in India: the complete process for foreign companies
Registering a subsidiary in India takes about 15 to 20 business days from the point where authenticated parent documents are in hand. Add three to four weeks for the corporate bank account, which runs afterwards. Nothing requires travel to India. A foreign parent may hold 100% of an Indian private limited company under the automatic route in IT, services, engineering and most manufacturing.
| Entity type | Private limited company under the Companies Act, 2013 |
|---|---|
| Incorporation timeline | 15–20 business days after documents are authenticated |
| Full time to operational | 6–9 weeks including document authentication and bank account |
| Foreign ownership | Up to 100% under the automatic route in most sectors |
| Minimum paid-up capital | No statutory minimum |
| Minimum directors | 2, of whom at least one must be a resident director |
| Minimum shareholders | 2 |
| Resident director test | 182 days in India during the financial year (s.149(3), Companies Act 2013) |
| Document authentication | Notarisation alone for Commonwealth subscribers; apostille for other Hague Convention countries |
| Travel to India | Not required |
| Regulators | Ministry of Corporate Affairs, Reserve Bank of India, Income Tax Department |
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 a foreign parent holds the majority of shares. Where the parent holds every share, the entity is a wholly owned subsidiary.
The Indian subsidiary is a separate legal person. It holds its own PAN, bank account, employment contracts and commercial agreements, and it files its own returns. Liability sits with the Indian company rather than the foreign parent, subject to any guarantee the parent chooses to give.
Three other structures exist, and each is narrower. A branch office is an extension of the foreign company itself, not a separate entity, and it exposes the parent to Indian tax on the branch profits. A liaison office cannot earn income at all; its permitted activities are representation and market research. A project office is temporary and tied to a single contract.
For a company hiring engineers, building a delivery centre, or trading in India, the private limited subsidiary is almost always the correct form.
→ Full comparison: subsidiary vs branch office vs liaison office
Is a subsidiary the right structure for your India entry?
The decision turns on headcount, intellectual property, and whether the entity needs to invoice Indian customers. The table below gives the decision rule rather than a list of considerations.
| Situation | Structure | Why |
|---|---|---|
| Engineering, development or back-office team | Subsidiary | Direct employment, clean IP ownership, own payroll |
| Buying from Indian suppliers and selling on | Subsidiary | Only an Indian entity can invoice in INR with GST |
| Eight or more employees planned within 12 months | Subsidiary | Per-head employer-of-record markup exceeds the fixed cost of an entity |
| Proprietary software or research built in India | Subsidiary | The IP assignment chain is one step, not two |
| One to four hires, market being tested | Employer of record first | Faster to start; revisit at five to eight employees |
| Market research and representation only | Liaison office | Cannot earn revenue, so scope is limited by design |
| A single defined contract | Project office | Exists for the duration of that contract |
→ EOR versus subsidiary in India — where the crossover sits
Do foreign documents need apostille, or is notarisation enough?
It depends on where the subscriber resides, and the answer is set by Rule 13(5) of the Companies (Incorporation) Rules, 2014. Many guides state that apostille is always required. That is wrong for a large share of KRPR & Associates clients.
| Where the subscriber resides | Requirement | Examples |
|---|---|---|
| A Commonwealth country | Notarisation by a Notary Public in that country. No apostille. | United Kingdom, Singapore, Australia, Canada |
| A Hague Apostille Convention country outside the Commonwealth | Notarisation, then apostille | United States, Germany, Netherlands, France, Japan |
| Neither Commonwealth nor Hague | Notarisation, then authentication by an Indian diplomatic or consular officer | Varies — confirm current Hague status before assuming |
Rule 13(5) governs what the Registrar of Companies requires for the incorporation filing. It does not bind Indian banks, which set their own know-your-customer standards and sometimes ask for apostille regardless. Confirm the receiving bank's requirement separately before assuming notarisation alone will clear account opening.
Document authentication is the most common source of delay, and it runs entirely on the parent country's clock. Book the notary in week one, before the company name is settled. Apostille turnaround in the United States and parts of Europe runs one to three weeks, and December is slower everywhere.
Do I need a resident director in India?
Yes. Section 149(3) of the Companies Act, 2013 requires every Indian company to have at least one director who has stayed in India for at least 182 days during the financial year. The Indian financial year runs from 1 April to 31 March.
The test is days of physical stay, not citizenship and not tax residency. A director based in London or San Francisco cannot satisfy it by visiting. Where the parent has nobody already living in India, the requirement is met by appointing a professional nominee resident director until a local hire or transferee qualifies.
An Indian private limited company also needs a minimum of two directors and two shareholders. Because a wholly owned subsidiary has a single corporate shareholder, the second share is normally held by a nominee for the parent, with a declaration recording that the beneficial interest belongs to the parent.
→ Resident director services in India
How do I register a subsidiary in India, step by step?
Incorporation runs through the Ministry of Corporate Affairs SPICe+ system, which combines name reservation, company registration, PAN, TAN and several statutory registrations into one integrated filing. The whole process is electronic. Taking the steps out of sequence is where delay comes from.
Notarise the certificate of incorporation, the constitutional documents, and a board resolution authorising the Indian investment. Apostille follows only where Rule 13(5)(b) applies. Start this before anything else — it runs on the parent country's timeline, not India's.
Every director signing Indian incorporation forms needs a Digital Signature Certificate from a licensed Indian certifying authority. Issuance involves video verification and identity documents, and directors resident abroad complete it remotely. Typical turnaround is three to five business days.
Submit up to two proposed names to the Ministry of Corporate Affairs. Names resembling an existing Indian company or a registered Indian trade mark are refused, and a group name being well known outside India carries no weight with the Registrar. An approved name is reserved for 20 days, extendable to 60.
The main filing covers company registration, Director Identification Numbers, the memorandum in Form INC-33 and the articles in Form INC-34. It also secures PAN, TAN, employer registrations for Provident Fund and Employees' State Insurance, and professional tax registration where the state requires one. The authenticated parent documents attach here.
The Registrar of Companies issues the Certificate of Incorporation carrying the Corporate Identification Number, together with PAN and TAN. The Indian company exists from this date, and the foreign parent's shareholding is recorded in the register of members.
Indian banks run their own know-your-customer review on the foreign parent, including identification for ultimate beneficial owners. Three to four weeks is normal for a foreign-owned entity opening its first account. Begin the week the Certificate of Incorporation issues rather than after capital is ready to move.
The foreign parent remits subscription money to the Indian company's account. Collect the Foreign Inward Remittance Certificate and the know-your-customer report from the remitting bank at the time of remittance — banks are slow to produce them months later. The remittance must come from the shareholder itself, not from a related company or a director personally.
Shares must be allotted within 60 days of receiving the money. Form FC-GPR then reports the share issue to the Reserve Bank of India through the FIRMS portal within 30 days of allotment. This is the deadline foreign companies miss most often.
Form INC-20A, the declaration of commencement of business, must be filed within 180 days of incorporation and requires proof that subscription money has actually been received. An Indian company cannot lawfully begin business or borrow before this filing is made.
Registration under the Shops and Establishments Act of the relevant state applies once premises are taken or staff engaged, and rules differ by state. Goods and Services Tax registration follows where the entity crosses the threshold or exports services. An Import Export Code is needed for physical goods movement.
| Stage | Typical duration | Runs on whose clock |
|---|---|---|
| Document notarisation and apostille | 1–3 weeks | Parent country |
| Digital Signature Certificates | 3–5 business days | India |
| Name reservation | 2–4 business days | India |
| SPICe+ filing to Certificate of Incorporation | 7–10 business days | India |
| Incorporation subtotal | 15–20 business days | After authentication |
| Bank account opening | 3–4 weeks | Runs after incorporation |
| Capital remittance and Form FC-GPR | Within 30 days of allotment | Statutory deadline |
What documents are required?
From the foreign parent company
- Certificate of incorporation
- Memorandum and articles of association, or the equivalent constitutional document
- Board resolution authorising the Indian subsidiary and naming the authorised signatory
- Proof of registered address
- Latest audited financial statements or a certificate of good standing
From each director resident outside India
- Passport, valid, in colour
- Overseas address proof — utility bill or bank statement, not older than two months
- Passport-size photograph
- Email address and a mobile number reachable for verification
From the Indian resident director
- PAN card
- Aadhaar card
- Address proof — bank statement or utility bill
- Passport-size photograph
For the registered office
- No-objection certificate from the property owner, or the rent agreement
- Utility bill for the premises, not older than two months
The registered office must be capable of receiving and acknowledging communications from the Registrar. Address-only arrangements with no operational presence have attracted increased scrutiny, so confirm the arrangement before relying on it.
What must be filed in the first 180 days?
Receiving the Certificate of Incorporation is the start of the compliance clock, not the end of the setup. Five obligations fall due inside the first 180 days, each with a hard deadline.
| Obligation | Deadline | Consequence of missing |
|---|---|---|
| First board meeting | Within 30 days of incorporation | Penalty on the company and every officer in default |
| Appoint the first statutory auditor | Within 30 days of incorporation | Penalty on the company; audit cannot proceed |
| Allot shares against subscription money | Within 60 days of receipt | Funds refundable within a further 15 days; holding beyond that contravenes FEMA |
| Form FC-GPR to the Reserve Bank of India | Within 30 days of share allotment | Late Submission Fee; unresolved delay can lead to compounding under FEMA |
| Form INC-20A, commencement of business | Within 180 days of incorporation | The company cannot lawfully commence business or borrow |
The Late Submission Fee for a delayed Form FC-GPR is calculated as ₹7,500 plus 0.025% of the amount involved for each year of delay, capped at 100% of that amount. The option to regularise by paying the Late Submission Fee is available for up to three years from the original due date.
Form INC-20A is the filing foreign companies overlook most often. Without it the company cannot legally commence business, sign commercial contracts, or make payments — and the problem usually surfaces when a bank or counterparty asks for it, several months in.
What does an Indian subsidiary have to file every year?
A foreign-owned Indian subsidiary files across three regulators: the Ministry of Corporate Affairs, the Reserve Bank of India and the Income Tax Department. Goods and Services Tax and payroll authorities sit alongside them.
| Filing | Frequency | Due |
|---|---|---|
| Provident Fund and Employees' State Insurance contributions | Monthly | 15th of the following month |
| Tax deducted at source — deposit | Monthly | 7th of the following month |
| GSTR-1 and GSTR-3B | Monthly | 11th and 20th of the following month |
| Tax deducted at source — returns, Form 24Q and 26Q | Quarterly | 31 July, 31 October, 31 January, 31 May |
| Advance tax instalments | Quarterly | 15 June, 15 September, 15 December, 15 March |
| Foreign Liabilities and Assets return to the Reserve Bank of India | Annual | 15 July |
| Director KYC, Form DIR-3 KYC | Annual | 30 September |
| Form 3CEB, accountant's report on international transactions | Annual | 31 October |
| Corporate income tax return, where Form 3CEB is required | Annual | 30 November |
| Form AOC-4, financial statements to the Registrar | Annual | Within 30 days of the annual general meeting |
| Form MGT-7, annual return to the Registrar | Annual | Within 60 days of the annual general meeting |
Statutory audit is mandatory for every Indian company regardless of size or turnover. India has no small-company audit exemption. A dormant subsidiary with no revenue still appoints an auditor and files audited accounts.
The quarterly tax deducted at source return for the January to March quarter is due 31 May, not 30 April. Deadlines shift by notification in some years, so confirm current dates before relying on them.
→ Statutory audit and ROC compliance · Monthly accounting and tax
How much does it cost to register and run an Indian subsidiary?
Incorporation cost splits into two parts: government fees, which are fixed and published, and professional fees, which vary with scope. Government fees under the SPICe+ system vary with authorised share capital and with the state of registration, so two otherwise identical companies can pay different amounts.
| Component | Payable to | Notes |
|---|---|---|
| MCA filing fees and stamp duty | Government of India and the state | Varies with authorised capital and state of registration |
| Digital Signature Certificates | Licensed certifying authority | Per director |
| Notarisation and apostille | Notary and issuing authority abroad | Paid in the parent country; varies by document count |
| Registered office | Landlord or service provider | Only where the parent has no India premises |
| Professional fees — incorporation | Your chartered accountant | Request a written itemised quote |
| Professional fees — annual compliance | Your chartered accountant | Scales with headcount and transaction volume |
| Statutory audit | Independent auditor | Cannot be the firm that keeps the books |
Two costs are commonly left out of first-year budgets. Transfer pricing documentation applies from the first intercompany invoice, not above a revenue threshold. A nominee resident director is a recurring cost where the parent has nobody in India, and it continues until a local hire qualifies under the 182-day test.
Ask any adviser for a written itemised quote separating government fees from professional fees. A single headline figure makes it impossible to tell what is fixed and what is negotiable.
What changes depending on where the parent company is based?
The incorporation process is identical for every foreign parent. Four things are not: document authentication, treaty withholding rates, permanent establishment thresholds, and what the parent's own auditors will expect.
| Parent country | Authentication | Watch for |
|---|---|---|
| United States | Notarisation plus apostille | US GAAP consolidation; benchmarking to IRS expectations; treaty characterisation of service fees |
| United Kingdom | Notarisation alone — Commonwealth | Permanent establishment exposure; UK GAAP or FRS 102 reporting; HMRC enquiries on intercompany arrangements |
| Germany and the EU | Notarisation plus apostille | Service permanent establishment thresholds are shorter for related enterprises; IFRS group reporting |
| Singapore | Notarisation alone — Commonwealth | The 30-day service permanent establishment threshold for related enterprises; capital gains position post-2017 |
→ United States · United Kingdom · Europe · Singapore
The mistakes we see most often
1. Leaving document authentication to the end
Founders treat notarisation as paperwork to complete once the Indian filings are drafted. It is often the longest single lead time in the process, and it sits entirely outside India's control. Book the notary in the first week, before the company name is settled.
2. Assuming apostille is always required
UK, Singapore, Australian and Canadian subscribers fall under Rule 13(5)(a) and need notarisation alone. Adding an unnecessary apostille step costs one to two weeks and a fee for nothing. Confirm which limb of Rule 13(5) applies before starting.
3. Hiring and paying Indian staff from the parent entity while incorporation is pending
Offers go out, candidates want to start, and the first two or three hires land on the parent payroll for a few months. Provident Fund, Employees' State Insurance and tax deducted at source go unpaid for that period, and the arrears surface at the first statutory audit. Either delay start dates or use an employer of record as a deliberate bridge with a planned transfer date.
4. Treating the intercompany charge as a salary reimbursement
The Indian subsidiary invoices the parent for exactly its payroll cost, with no markup and no signed service agreement, on the reasoning that no profit is intended. Indian transfer pricing does not accept that reasoning. Assessing officers impute an arm's length markup, tax the difference, and add interest and penalty. Sign the intercompany service agreement before the first invoice.
5. Missing Form INC-20A
The Certificate of Incorporation arrives and the company starts operating. Form INC-20A is never filed, and the company is trading without the legal capacity to do so. It usually surfaces when a bank, an auditor or a counterparty asks for the filing. Diarise it on the day the certificate issues.
6. Appointing a resident director without checking the 182-day test
A name is added to the board to satisfy Section 149(3), but nobody tracks whether that person actually stays in India for 182 days in the financial year. If they fall below the threshold — through relocation, illness or extended travel — the company is non-compliant for that year even though the appointment looked correct when made.
When you need professional help
Several decisions are genuinely manageable in-house. Choosing the shareholding structure, setting the authorised capital, selecting the state of registration, and gathering parent documents are all things a finance team can handle with a short briefing. The SPICe+ portal itself is usable.
Three areas reward professional involvement, because errors in them are expensive and slow to discover. Foreign exchange reporting is the first: Form FC-GPR carries a hard 30-day deadline, contraventions have to be regularised through the Late Submission Fee or compounding, and the supporting paperwork must be collected at the time of remittance rather than reconstructed later. Transfer pricing is the second, because the pricing model and the intercompany agreement must exist before the first invoice. Treaty positions are the third — permanent establishment exposure and the characterisation of cross-border payments both need deciding in advance.
Statutory audit is neither optional nor self-performable. Every Indian company appoints an independent auditor, and that auditor cannot be the firm keeping the books.
Coordination with the parent's own advisers matters too. Foreign tax credit treatment, group consolidation and audit requirements, and any home-country reporting on the outbound investment all sit outside Indian scope. Review the Indian structure with them before it is fixed.
Frequently asked questions
Can a foreign company own 100% of an Indian subsidiary?
Yes, in most sectors. Information technology, software, professional services, engineering, trading and most manufacturing permit 100% foreign ownership under the automatic route, with no prior government approval. A small number of sectors including defence, media, insurance and banking carry caps or require approval. Confirm the sector classification before incorporating.
How long does it take to register a subsidiary in India?
Incorporation takes 15 to 20 business days once authenticated parent documents are in hand. Document notarisation and apostille add one to three weeks before that, and bank account opening adds three to four weeks afterwards. Total elapsed time from decision to an operational bank account is typically six to nine weeks.
Do I need to travel to India to register a subsidiary?
No. Incorporation, Digital Signature Certificates, Director Identification Numbers and bank account opening are all completed remotely. Original authenticated documents are couriered to India. The separate requirement is that one director must stay in India for 182 days in the financial year, which is met by a resident director rather than by travel.
What is the minimum capital required for an Indian subsidiary?
There is no statutory minimum paid-up capital under the Companies Act, 2013. In practice the capital should cover operating costs until intercompany billing begins, because the subsidiary pays salaries and statutory dues from its own account. Many foreign parents capitalise three to six months of running costs.
Do UK or Singapore documents need an apostille for India?
No. Rule 13(5)(a) of the Companies (Incorporation) Rules, 2014 allows a subscriber resident in a Commonwealth country to have signatures, address and identity proof notarised by a Notary Public in that country, with no apostille. The United Kingdom, Singapore, Australia and Canada all fall under this limb. Banks may set separate standards.
What happens if Form FC-GPR is filed late?
A Late Submission Fee applies, calculated as ₹7,500 plus 0.025% of the amount involved for each year of delay, capped at 100% of that amount. The option to regularise this way is available for up to three years from the original due date. Beyond that, the contravention has to be compounded under the Foreign Exchange Management Act, 1999.
Does a dormant Indian subsidiary still need an audit?
Yes. Statutory audit is mandatory for every Indian company regardless of turnover or activity, and India has no small-company audit exemption. A subsidiary with no revenue still appoints an independent auditor, files audited financial statements in Form AOC-4, and files its annual return in Form MGT-7.
Do I have to file transfer pricing documentation for a small intercompany charge?
Yes. India applies no monetary threshold to international transactions between associated enterprises. A single invoice between the foreign parent and the Indian subsidiary brings the arrangement into scope, requiring an intercompany agreement, an annual benchmarking study, and Form 3CEB filed by 31 October. The ₹20 crore threshold applies only to specified domestic transactions.
When is the corporate income tax return due?
Where Form 3CEB is required — which covers any company with international transactions with associated enterprises — the return is due 30 November. Companies subject to audit but without international transactions file by 31 October. Because every Indian company requires statutory audit, the 31 July date that applies to non-audit taxpayers does not apply.
Does the Annual Performance Report apply to a foreign-owned Indian subsidiary?
No. The Annual Performance Report is filed by Indian entities and residents that have made overseas direct investment in a foreign joint venture or wholly owned subsidiary. A foreign-owned Indian subsidiary files the Foreign Liabilities and Assets return by 15 July instead.
Can we use the parent company name for the Indian subsidiary?
Usually, provided no identical or closely similar name is already registered in India and no conflicting Indian trade mark exists. The standard format is [Parent Name] India Private Limited. Where the Indian name mirrors the parent's, file a no-objection resolution from the parent alongside the application.
Are services exported by the Indian subsidiary to the parent subject to GST?
They are zero-rated where payment is received in convertible foreign exchange and the two entities are not establishments of the same person. Zero-rating lets the Indian entity recover input tax, either by exporting under a Letter of Undertaking and claiming a refund of input credit, or by paying the tax and claiming it back.
Can an Indian subsidiary operate without hiring employees?
Yes. There is no requirement to employ anyone. Foreign parents maintain lean Indian entities for trading, intellectual property holding or group structuring, with no India-based staff. Statutory audit, ROC filings, income tax and FEMA reporting still apply in full.
Discuss your India entry with a chartered accountant
A senior consultation covers the shareholding structure, the document authentication route for your jurisdiction, the FEMA reporting timeline, the transfer pricing model for intercompany charges, and a written itemised quote for incorporation and first-year compliance.
Request a senior consultation- Source: Ministry of Corporate Affairs — Companies (Incorporation) Rules, 2014, Rule 13(5)
- Source: India Code — Companies Act 2013, s.149(3); Income-tax Act 1961, s.92E and s.139(1)
- Source: Reserve Bank of India FIRMS portal — Form FC-GPR
- Source: Reserve Bank of India — A.P. (DIR Series) Circular No. 16 dated 30 September 2022, Late Submission Fee
- Source: Income Tax Department
- Source: DPIIT consolidated FDI policy
- Source: Goods and Services Tax portal
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.