India Entry · UK Founders
How to Register a UK Subsidiary in India: The 2026 Guide
For most UK companies, the right structure to register a UK subsidiary in India is a Private Limited Company — India's equivalent of a wholly owned subsidiary, and the standard route whether you frame this as company setup in India from the UK or as registering a subsidiary of a UK company specifically. Realistic timeline is 8-12 weeks from decision to first hire, and the main bottleneck is UK document preparation and the FCDO apostille, not the Indian registration process itself. No travel to India is required at any stage. Under the India-UK DTAA, dividend withholding is capped at 10% (versus roughly 20% domestically), and one detail most guides miss: a UK enterprise providing services in India through its own staff can trigger a Permanent Establishment after just 90 days — tighter than the 183-day threshold on several other Indian treaties.
| Recommended structure | Private Limited Company (Wholly Owned Subsidiary) |
|---|---|
| Timeline, decision to first hire | 8-12 weeks |
| Travel required | No — fully remote, including bank KYC |
| Minimum capital | None statutory; typically INR 1-10 lakh (£950-£9,500) in practice |
| Dividend withholding (India-UK DTAA) | 10% (15% for property-linked vehicles), vs ~20% domestic rate |
| Resident director requirement | 182 days in the financial year (1 Apr-31 Mar) |
| Services PE threshold | 90 days — shorter than the 183-day norm on other treaties |
- Why UK companies are expanding to India
- Which structure should you use?
- India's FDI rules for UK investors
- Incorporating your Indian company
- GST and accounting
- HR, payroll & labour compliance
- The India-UK DTAA, in real numbers
- Monthly & annual compliance calendar
- Common mistakes UK companies make
- What it actually costs
- Frequently asked questions
Why are UK companies expanding to India?
Senior software engineers, data scientists, and engineering specialists in India typically cost 60-75% less than equivalent UK hires, even accounting for employer compliance costs. India produces over 1.5 million engineering graduates annually, with deep talent pools concentrated in Pune, Bengaluru, Hyderabad, and Chennai.
The UK and India have maintained a Double Taxation Agreement since 1993, and the 2025 India-UK Free Trade Agreement has further simplified cross-border commercial activity. Most sectors — including IT services, software development, engineering, and BPO — qualify for 100% FDI under India's automatic route, meaning no prior government approval is required.
Which structure should you use to register a UK subsidiary in India?
This is the most consequential decision in the entire process. Four structures are available to a UK company entering India.
| Structure | Legal status | RBI approval | Best fit |
|---|---|---|---|
| Private Limited Company | Separate legal entity | Not required — automatic route | IT, engineering, and any company planning to hire beyond a handful of staff |
| Branch Office | Extension of the UK parent | Required | Narrow, specific presence; cannot conduct manufacturing or retail trade |
| Liaison Office | Representative office only | Required | Market research before committing to a full setup — cannot earn revenue |
| Employer of Record | Not a legal entity — a service | Not applicable | Hiring 1-10 staff quickly, or bridging while incorporation is in progress |
A Private Limited Company is the right answer for nearly every UK company. It is a separate legal entity from the UK parent, can hire employees directly, hold assets, open bank accounts, and remit profits back to the UK under RBI guidelines. The UK parent holds 100% of the shares; the Indian entity operates as a wholly owned subsidiary.
What are India's FDI rules for UK investors?
India's FDI rules for UK investors depend almost entirely on sector: the vast majority — including IT services, software development, and professional services — fall under the automatic route, requiring no prior government approval. A smaller set, including defence and pharmaceuticals above certain thresholds, require prior approval under the approval route. Foreign Direct Investment into India is regulated by the Foreign Exchange Management Act and administered by the Reserve Bank of India.
There is no statutory minimum paid-up capital, but the amount brought in should be commercially justifiable relative to planned operations. Funding operations through director loans instead of proper share capital creates FEMA complications. Ongoing RBI reporting obligations include Form FC-GPR (within 30 days of share allotment) and the annual FLA Return (by 15 July, reporting outstanding FDI and foreign assets regardless of whether new capital moved that year).
What are the steps to incorporate your Indian company?
Incorporating your Indian company takes nine steps, from apostilling your UK documents through to your first statutory registrations — typically 8-12 weeks end to end. A Private Limited Company requires a minimum of two directors, at least one of whom must be resident in India (present for 182 days or more during the financial year, 1 April to 31 March, under Section 149(3) of the Companies Act, 2013). The UK parent holds shares as shareholder; it does not need to be a director itself.
Passport and address proof for each director/shareholder, plus the UK company's Certificate of Incorporation and registered office address proof, all need FCDO apostille before they're valid for use in India. Start this first — it's the longest lead time in the entire process.
Every director needs a Digital Signature Certificate to sign filings electronically, and a Director Identification Number. Both are processed remotely via video verification — no travel required.
Submit two name options via the MCA's RUN (Reserve Unique Name) service or as part of the SPICe+ filing. A matching UK trademark improves the odds of first-attempt approval.
The Indian MOA and AOA are drafted specifically for the Indian entity — UK constitutional documents don't transfer over and must be redrafted to Indian company law requirements.
The unified incorporation form, filed with the MOA, AOA, and supporting documents. The Registrar of Companies (ROC) reviews and approves — typically 15-25 business days from the point all documents are correctly assembled. Delays almost always trace back to the apostille or documentation stage, not the ROC review itself.
PAN and TAN — India's tax identification numbers — are usually auto-issued alongside the Certificate of Incorporation, with no separate application needed.
Directors complete video KYC remotely. Once the account is active, the UK parent wires the share subscription amount, which converts to INR on receipt.
Mandatory within 30 days of share allotment, via the RBI's FIRMS portal. This is the single most commonly missed deadline in the entire process — see Common Mistakes below.
GST registration is required if turnover will exceed INR 20 lakh per year — in practice, almost every subsidiary invoicing its UK parent registers from day one. PF and ESI registration should be completed before your first hire.
| Document | Notes |
|---|---|
| Apostilled copy of passport, each UK director/shareholder | FCDO apostille required — a notarised-only copy will be rejected |
| Apostilled address proof, each UK director/shareholder | Recent utility bill or bank statement, apostilled the same way |
| Certificate of Incorporation (CIN) of the UK parent company | Apostilled |
| Registered office address proof of the UK parent company | Apostilled |
Everything above needs FCDO apostille, not just notarisation, before the Registrar of Companies will accept it. The Indian entity's own MOA and AOA are drafted as part of the incorporation itself — not something you need to prepare or provide.
GST and accounting
If the Indian entity provides services — including services exported to the UK parent — GST registration is almost always required. The standard rate for IT services is 18%. Services provided to a foreign entity and paid for in foreign currency generally qualify as zero-rated exports: 0% GST charged, with refunds available on input GST paid. Charging 18% GST on inter-company invoices to the UK parent when the supply should be zero-rated is a frequent, costly error that creates reconciliation problems later.
Monthly or quarterly GST returns are required: GSTR-1 (outward supplies), GSTR-3B (summary return and payment), and GSTR-2B (auto-populated input tax credit). Input tax credit can only be claimed on invoices appearing in GSTR-2B, which depends on suppliers filing correctly on their side.
Inter-company transactions with the UK parent — service fees, management charges, loan arrangements — fall under Indian transfer pricing rules and must be priced on an arm's length basis. Once international related-party transactions exceed INR 1 crore in a financial year, an annual transfer pricing report (Form 3CEB), prepared by a Chartered Accountant, is mandatory. See the transfer pricing service page for how the benchmarking study works.
HR, payroll & labour compliance
Employees earning below INR 15,000 per month in basic salary must be enrolled in the Employees' Provident Fund, with 12% contributions from both employer and employee; most companies extend PF to all employees regardless of salary level. Employee State Insurance applies to employees earning up to INR 21,000 per month gross, funding health and insurance benefits at 3.25% employer and 0.75% employee contribution, and becomes mandatory once headcount reaches 10 in applicable states. Professional Tax is a state-level deduction from salaries — in Maharashtra, capped at INR 2,500 per year per employee.
TDS on salaries must be deducted under Section 192 and remitted monthly, with quarterly returns (Form 24Q) and annual Form 16 certificates. Employment contracts should be explicit on notice periods and IP assignment — particularly important for engineering and IT roles, to ensure code and inventions created by Indian staff belong to the Indian entity. See payroll for foreign companies for the full monthly cycle.
What are the India-UK DTAA tax rates?
Under the India-UK DTAA, dividend withholding is capped at 10% generally — well below the roughly 20% domestic rate that applies without treaty documentation. The UK and India have maintained this Double Taxation Agreement since 1993, updated by a 2012 Protocol. For a UK parent, the actual withholding rates matter more than the general concept of the treaty existing.
| Payment type | Treaty rate | Domestic rate without treaty |
|---|---|---|
| Dividends, general | 10% | ~20% |
| Dividends, property-linked investment vehicles | 15% | ~20% |
| Interest, banks & financial institutions | 10% | ~20% |
| Interest, general | 15% | ~20% |
| Royalties, equipment use | 10% | ~20% |
| Royalties (other IP) & fees for technical services | 15% | ~20% |
Claiming these rates requires a UK-issued Tax Residency Certificate and Form 41 (replacing Form 10F for filings from 1 April 2026), filed before the payment via the Income Tax Department's e-filing portal. Unlike the India-US treaty, the India-UK DTAA carries no "make available" clause — managerial, technical, and consultancy fees are taxable at source regardless of whether knowledge is actually transferred to the Indian side.
Under the treaty's services PE provision, a UK enterprise furnishing services in India — including through its own employees — can create a Permanent Establishment once those activities exceed 90 days, materially shorter than the 183-day threshold common on several other Indian tax treaties. Where the Indian entity operates independently and simply invoices the UK parent, PE risk is generally low; UK companies rotating consultants or engineers through India for extended stints should track cumulative days deliberately rather than assume the more familiar 183-day rule applies here.
See the full India-UK DTAA guide for the complete treaty breakdown.
Monthly & annual compliance calendar
Incorporation is the start, not the finish line. A Private Limited Company carries ongoing statutory obligations for as long as it exists.
| Compliance | Frequency | Due date |
|---|---|---|
| TDS deduction & deposit | Monthly | 7th of the following month |
| PF contribution & filing | Monthly | 15th of the following month |
| ESI contribution & filing | Monthly | 15th of the following month |
| GST returns (GSTR-1, GSTR-3B) | Monthly or quarterly under QRMP | Varies by return |
| TDS returns (Form 24Q) | Quarterly | Within a month of quarter end |
| Advance tax | Quarterly, 4 instalments | 15 Jun, 15 Sep, 15 Dec, 15 Mar |
| Compliance | Due date |
|---|---|
| Board meetings — minimum 4 per year, no gap over 120 days | Ongoing |
| Statutory audit — mandatory regardless of turnover | Before the AGM |
| Annual General Meeting | By 30 September |
| Form AOC-4 (financial statements) | Within 30 days of the AGM |
| Form MGT-7A (annual return) | Within 60 days of the AGM |
| DIR-3 KYC, every director | 30 September |
| Income Tax Return (Form ITR-6) | 31 October (30 Nov if Form 3CEB applies) |
| Form 3CEB (transfer pricing report) | 31 October |
| FLA Return to RBI | 15 July |
Missing the AOC-4 or MGT-7A deadline triggers additional government fees that accrue daily until filed. See statutory audit & ROC compliance.
Common mistakes UK companies make
- Undercapitalising the subsidiary, then funding operations through director loans — creates FEMA complications that are harder to unwind than to avoid.
- Missing the FC-GPR deadline. Must be filed within 30 days of share allotment; missing it requires a compounding application to the RBI.
- Charging GST on inter-company invoices that should be zero-rated exports — a common, expensive misclassification.
- Leaving transfer pricing documentation until the first tax assessment. Document methodology from year one.
- Applying UK payroll logic to India. PF, ESI, TDS, and Professional Tax work differently; a UK-centric setup invites penalties.
- Ignoring annual ROC filings — missed filings attract daily penalties and can result in the company being struck off.
- Assuming the 183-day PE threshold applies. The India-UK treaty's services PE threshold is 90 days; applying the more commonly cited 183-day figure can trip this without warning.
How much does it cost to register a UK subsidiary in India?
Government fees, digital signatures, a registered office, and FCDO apostille costs typically total £150-£350 (roughly INR 16,000-37,000). Professional fees for incorporation and first-year FEMA/RBI compliance are the larger component and vary by scope — request a written, itemised quote before starting. There is no minimum paid-up capital requirement; ongoing annual compliance from Year 2 (ROC filings, statutory audit, income tax return, the FLA return) is a separate recurring cost worth itemising in advance.
Frequently asked questions
Can a UK citizen be a Director of an Indian company?
Yes. The Indian Companies Act, 2013 also requires at least one director to be resident in India — present for 182 days or more during the financial year (1 April to 31 March). Most UK companies appoint a professional resident nominee director to meet this requirement rather than relocating someone.
What is the minimum capital required to register a UK subsidiary in India?
There is no statutory minimum paid-up capital under the Companies Act, 2013. In practice, most subsidiaries start with INR 1-10 lakh (roughly £950-£9,500) to cover initial bank charges and setup costs without triggering scrutiny over commercial justification.
How long does the FCDO Apostille process take?
The UK Foreign, Commonwealth & Development Office typically processes standard apostille requests in 2 to 5 working days. Budget 1-2 weeks in total once notarisation and courier time to India are included.
Do UK directors need to travel to India to open the bank account?
Generally no. Most major Indian banks accept remote video KYC, or documents certified by a UK notary and the Indian High Commission in London.
What is the withholding tax rate under the India-UK DTAA?
Dividends are capped at 10% generally, 15% for certain property-linked investment vehicles. Interest is 10% for banks and financial institutions, 15% otherwise. Royalties for equipment use are 10%; other royalties, copyrights, and fees for technical services are 15%. All rates are well below India's roughly 20% domestic withholding rate without treaty documentation. Unlike the India-US treaty, the India-UK DTAA has no "make available" clause, so technical and consultancy fees are taxable at source regardless of whether knowledge is actually transferred.
What does it cost to register a UK subsidiary in India?
Government fees, digital signatures, a registered office, and FCDO apostille costs typically total £150-£350 (roughly INR 16,000-37,000). Professional fees for incorporation and first-year FEMA/RBI compliance are the larger component and vary by scope — request a written, itemised quote before starting.
Can seconding UK staff to India create a Permanent Establishment risk?
Yes, and the threshold is tighter than many founders expect. Under the India-UK DTAA's services PE provision, a UK enterprise furnishing services in India through its own personnel can create a Permanent Establishment once those activities exceed 90 days — notably shorter than the 183-day threshold on several other Indian tax treaties. UK companies rotating consultants or engineers through India should track cumulative days deliberately.
Is company setup in India from the UK the same as registering a UK subsidiary?
Yes — they describe the same process. Registering a UK subsidiary refers specifically to the legal incorporation step, while company setup in India from the UK is the broader term covering incorporation plus the FEMA/RBI compliance, banking, and tax registrations that follow. Whether you search for company setup in India from the UK, UK subsidiary company registration, or how to register a subsidiary of a UK company, this guide covers the complete process end to end.
Get your India entry structured correctly the first time
A confidential consultation with a senior Chartered Accountant — your FDI route, DTAA documentation, and a realistic timeline, before you commit to anything.
Request a consultation- Sources: Reserve Bank of India, Ministry of Corporate Affairs, Income Tax Department, Companies Act 2013, India-UK DTAA (1993, as amended by the 2012 Protocol)
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.
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