Step 1: Choose the Right Structure (It's Usually a Pvt Ltd)

First, you need a legal entity. For nearly every US company, the best choice is a Private Limited Company (Pvt Ltd) — India's closest equivalent to a US wholly-owned subsidiary.

Why it wins over the alternatives (branch office, liaison office, LLP):

• It's a separate legal person. If the Indian company gets sued, your US parent's assets are protected.
• It allows 100% foreign ownership under the FDI Automatic Route for most sectors — software, IT services, consulting, and B2B e-commerce don't need prior government approval.
• It's straightforward to capitalize. You can wire funds from the US without complex structuring, subject to FEMA reporting (more on that in Step 4).
• It cleanly owns IP. Code, patents, and trade secrets built by your Indian team sit inside an entity you own outright.

The "Two-Person" Rule

A Private Limited company needs at least two shareholders:

1. Shareholder 1: Your US company (typically holds 99.9% of shares).
2. Shareholder 2: A nominee (typically holds 0.1%).

Since a US company is a legal, not a natural, person, it can't hold shares entirely on its own — Indian company law requires a second shareholder. This is usually a founder or director of the US parent, acting in a nominal capacity.

Separately, Indian law also requires at least one resident director — someone who has physically stayed in India for 182+ days in the previous calendar year. No US-based founder meets that on day one, so most companies use a professional resident director service rather than relocating someone. The nominee is bound by an indemnity agreement and has no authority to transact without your instruction — you retain full board control and 100% economic ownership.

Step 2: The Paperwork (The Tricky Part)

This is where most founders get stuck. You cannot simply email PDF documents to India — the Indian government needs proof your US company is real, and that proof has to be legalized.

Because both the US and India are members of the Hague Convention, that legalization takes the form of an Apostille, not a full consular legalization.

Your document checklist

• Board Resolution: A document stating the US company wants to open an Indian subsidiary.
• Certificate of Incorporation: Your US company's formation document.
• Proof of Address: A recent utility bill or bank statement for the US office.

The process

1. Get the documents notarized by a Public Notary in the US.
2. Send them to the Secretary of State in your state for an Apostille stamp.
3. Courier the originals to India (scanned copies alone aren't sufficient for the physical filing record).

Step 3: Registering Online (The Easy Part)

Once your apostilled documents reach India, the rest of the process is digital. Registrations run through a unified form called SPICe+, filed with the Ministry of Corporate Affairs (MCA).

1. Get Digital Signatures (DSC): Directors need a digital signature certificate to sign forms electronically. This is done via email and video verification — no travel required.
2. Reserve your name: If your US company owns a matching trademark, you get preference on name approval. Submit two strong options; roughly 3 in 10 first-attempt names get rejected, especially generic ones.
3. File the incorporation form: Your Memorandum and Articles of Association (MOA/AOA) are submitted to the Registrar of Companies (ROC).

Timeline: Once filed correctly, the ROC typically approves incorporation in 5–10 working days. PAN and TAN (India's tax ID numbers) are usually auto-issued alongside the Certificate of Incorporation.

Step 4: Banking and Money (FEMA Compliance)

Congratulations — you have your Certificate of Incorporation. You're not done yet, though: you still need to put money into the company, and that involves the Reserve Bank of India (RBI) under the Foreign Exchange Management Act (FEMA).

1. Open a bank account: Foreign directors complete Video-KYC ("Know Your Customer") remotely.
2. Send the capital: Wire the subscription money from your US business account to the new Indian account — only after the bank confirms the account is fully activated.
3. Get the FIRC: Request a Foreign Inward Remittance Certificate from your Indian bank — this is your official proof of payment.
4. File Form FC-GPR: You must report the inflow to the RBI, via the RBI FIRMS portal, within 30 days of the funds landing. This deadline is strict — miss it and penalties accrue daily until the filing is regularised.

Our FEMA & FDI compliance desk exists specifically because this step is where founders lose the most money to avoidable penalties.

Step 5: Taxes and Transfer Pricing

How does your Indian subsidiary get taxed?

• Corporate tax: New Indian companies typically pay a concessional rate around 25%, subject to conditions.
• GST (Goods and Services Tax): India's equivalent of sales tax. If your Indian entity only exports services back to the US parent, those exports are generally treated as "zero-rated" — you usually don't pay GST on them, though registration may still be required above the turnover threshold.
• Transfer pricing: If your Indian team works exclusively for the US parent, you must pay them a fair market ("arm's length") price — you cannot underpay the Indian entity to shift profits abroad. This needs to be documented from day one, not retrofitted at year-end. See our transfer pricing advisory for how the benchmarking study works.

Monthly bookkeeping, GST/TDS filings, and payroll are ongoing obligations once the entity is live — our monthly accounting & tax and payroll & HR teams typically pick this up right after incorporation.

What It Actually Costs

Very few guides put real numbers next to this process. Here's the typical breakdown — treat these as indicative ranges, not a quote, since government fees vary by authorized share capital and professional fees vary by firm and scope.

Minimum paid-up capital: none. India abolished the minimum capital requirement in 2015 — most companies fund the entity with enough working capital to cover a few months of payroll.

Ongoing annual compliance (ROC filings, statutory audit, income tax return, bookkeeping) is a separate recurring cost — ask your advisor to itemise Year 2 onward before you commit.

Summary Timeline

Frequently Asked Questions