Indian Subsidiary Registration

Indian Subsidiary Registration

There is a lot of interest among foreign companies to start their operations in India and tap into one of the largest and fast-growing market, and have access to some of the best human resources in the world. A Foreign National (other than a citizen of Pakistan or Bangladesh) or an entity incorporated outside India (other than entity incorporated in Pakistan or Bangladesh) can invest and own a Company in India by acquiring shares of the company, subject to the FDI Policy of India. Also, a minimum of one Indian Director who is a Indian Director and Indian Resident is required for incorporation of an Indian Company along with an address in India. IndiaFilings can help you register an Indian Subsidiary while also providing Nominee Directors and Registered Office service in India.

What is included in Our Package


Minimum Requirment for Wholly Owned Indian Subsidiary

Private Limited : Private Limited Company has following characteristics:

  • Minimum paid up capital is Rs. 1,00,000.
  • Minimum 2 Director and 2 shareholder, One will be Indian Resident Director.
  • Shareholder’s right to transfer shares is restricted
  • The number of shareholders is limited to 200; and an invitation to the public to subscribe to any shares or debentures is prohibited.

Public Limited : Public Limited Company has following characteristics:

  • It must have at least seven shareholders.
  • Minimum paid up capital must be Rs. 5,00,000
  • It must publish a prospectus or file a statement in lieu of a prospectus before it can start transacting business.
  • A public company is required to have at least three directors.

Documents Required for Wholly Owned Indian Subsidiary

From All Directors and Shareholders

  1. Utility bills (any)
  2. A copy of a rent agreement with NOC from an owner.

For Proposed Registered Office (Residential or commercial)

  1. Passport of foreign directors
  2. Incorporation certificate issued by the foreign government
  3. For opening a subsidiary company in India, a resolution from LLC/INC
  4. A copy of Voter’s ID/Driving license/Passport & PAN Card of Indian director.
  5. Photograph of all directors and shareholder. (Passport-sized)

Features of Indian Subsidiary Companies

  • No requirement of prior approval for repatriation dividend.
  • Debt, Equity, and Internal accruals are the available funding mechanisms.
  • Indian Transfer pricing regulation is applicable to the Indian subsidiary Company.
  • It is treated as an Indian company for all other applicable laws and the purpose of income tax.
  • It is taxed at a lower rate of 30% in comparison to a foreign company whereas a foreign company is taxable at 40%.
  • The dividend distribution tax (DDT) is subjected to 16.995%.

Advantages of Indian Subsidiary registration

  • Limited Liability:The liability of Directors and members of the private limited company is limited to their shares. This means the company suffers from any loss and faces financial distress because of primary business activity, the personal assets of shareholders/Members/Directors will not be at risk of being seized by banks, creditors, and government.
  • Continuity of Existence:Mostly, the life of the business doesn’t affect by the status of shareholders and even after the death of the shareholder the private limited company continues to exist.
  • Brand ValueThe brand value of a company will get increased because employees feel secure in joining the private limited company, vendor feels secure in offering credit, investor feels secure in investing, the customer feels trust and confidence in a brand in buying company product or services because of the sound corporate structure. Many startup companies start with zero revenue and rapidly reaches to a multibillion-dollar company in just a few years just because of the high brand value of the company.
  • Scope of expansion:The scope of expansion is higher because it is easy to raise capital from a venture capitalist, financial institutions, angel investor, and the advantages of limited liability, the Private limited offer more transparency in the company.
  • Foreign Direct Investment in IndiaForeign Direct Investment (FDI) is 100% allowed in several business activities/industries without any prior approval. But FDI is not allowed in Proprietorship or Partnership; LLP requires prior Government approval.

Procedure for Indian Subsidiary Registration ?


Minimum Requirements for Indian Subsidiary Registration ?

  • Minimum 2 Shareholders

  • Minimum Capital of Rs. 1lac

  • DIN for all Directors

  • Parent company must hold 50% of total equity capital.

Annual Compliances of Indian Subsidiary Company

All Indian Subsidiary companies are needed to comply with Companies Act, the Income Tax Act, FEMA guidelines, transfer pricing guidelines. Time to time, they are liable to file an income tax return with the income tax department, annual return with the registrar of companies and other mandatory filings with the reserve bank of India or securities and exchange board of India etc. However, the requirement is based on the type of industry, turnover, and the number of employees.


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