Indian Subsidiary Registration
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What is an Indian Subsidiary?
An Indian subsidiary is a company incorporated in India under the Companies Act, 2013, where a foreign parent company holds more than 50% of the share capital [citation:2]. A Wholly Owned Subsidiary (WOS) occurs when the parent company holds 100% of the shares, giving it complete operational control while the subsidiary remains a distinct legal entity in India [citation:2][citation:4]. This structure offers limited liability, tax advantages, and access to one of the world's fastest-growing markets [citation:2][citation:3].
A subsidiary company has its own legal identity, can enter into contracts, own property, and is subject to Indian laws and regulations [citation:9]. This makes it the preferred route for foreign companies seeking long-term business operations in India, as it offers greater operational independence compared to liaison or branch offices [citation:1][citation:10].
Why Choose an Indian Subsidiary?
Limited Liability
Shareholders' liability is limited to their shareholding. The parent company's assets are protected from the subsidiary's debts or obligations [citation:2][citation:9].
Separate Legal Identity
The subsidiary operates as an independent legal entity under the Companies Act, 2013, capable of owning assets, entering contracts, and suing or being sued [citation:2][citation:3].
Full Operational Control
Especially in a Wholly Owned Subsidiary (WOS), the parent company retains complete control over operations, strategy, and decision-making [citation:4][citation:7].
Tax Benefits
Subsidiaries are taxed as domestic companies at 22% (or 15% for new manufacturing companies) and can benefit from DTAA provisions [citation:2][citation:7].
Access to Indian Market
Establish a direct presence in India's fast-growing economy with access to a skilled workforce and vast consumer base [citation:6][citation:11].
Ease of FDI
In most sectors, 100% FDI is permitted under the automatic route, meaning no prior government approval is required [citation:1][citation:6].
Indian Subsidiary Requirements
Minimum Directors
Minimum 2 directors required. At least 1 director must be a resident of India (lived in India for 182+ days in the previous financial year) [citation:2][citation:5].
Minimum Shareholders
Minimum 2 shareholders required. Can be individuals or corporate entities, including foreign companies [citation:2].
Foreign Shareholding
Parent company must hold more than 50% of the subsidiary's share capital for it to be classified as a subsidiary [citation:2][citation:8].
Registered Office in India
Must have a registered office address in India for legal and government correspondence [citation:2][citation:7].
Minimum Share Capital
No prescribed minimum, but INR 1 lakh is recommended for operational readiness [citation:2][citation:5].
Director Age
All directors must be at least 18 years of age [citation:2][citation:5].
Indian Subsidiary Registration Process
Obtain DSC
All proposed directors must obtain a Class 3 Digital Signature Certificate (DSC) to sign electronic documents on the MCA portal [citation:2][citation:6].
Apply for DIN
Apply for Director Identification Number (DIN) through the SPICe+ Form for all proposed directors [citation:2][citation:6].
Name Reservation
Apply for company name approval via the MCA RUN (Reserve Unique Name) portal. Choose a unique name that complies with MCA guidelines [citation:2][citation:3].
Draft MOA & AOA
Prepare the Memorandum of Association (MOA) and Articles of Association (AOA) aligned with the subsidiary's objectives [citation:2][citation:3].
File SPICe+ Form
Submit the incorporation application with all supporting documents on the MCA portal via SPICe+ (Simplified Proforma for Incorporating Company Electronically) [citation:2][citation:3].
Obtain Certificate of Incorporation
Upon verification, the Registrar of Companies (ROC) issues the Certificate of Incorporation (COI) with a unique CIN [citation:2][citation:5].
PAN & TAN Registration
Automatically applied through the SPICe+ integrated form. Required for tax compliance and financial operations [citation:2][citation:3].
RBI & FEMA Compliance
Report Foreign Direct Investment (FDI) inflows to RBI through the authorised dealer bank. File FC-GPR form within 30 days of share allotment [citation:2][citation:4].
Open Bank Account
Open a current account in the subsidiary company's name for all financial transactions [citation:2][citation:7].
Liaison Office vs Branch Office vs Subsidiary
| Aspect | Liaison Office | Branch Office | Subsidiary Company |
|---|---|---|---|
| Legal Status | Not a separate legal entity | Not a separate legal entity | Separate legal entity |
| Revenue Generation | Not permitted | Permitted (within RBI limits) | Permitted without restriction |
| Liability | Parent company bears full liability | Parent company bears full liability | Limited to shareholding |
| Taxation | Higher tax rates | Higher tax rates | Domestic rates (22% / 15%) |
| RBI Approval Required | Required prior approval | Required prior approval | Not required (FEMA compliance only) |
| Operational Independence | Minimal, only representative | Partial, parent-controlled | Fully autonomous |
| Best For | Market research, liaison | Project-based operations | Long-term business operations |
Documents Required for Subsidiary Registration
- Certificate of Incorporation (apostilled & notarised) [citation:2][citation:3]
- Board Resolution authorising Indian subsidiary formation [citation:2][citation:9]
- MOA & Articles of Association of parent company [citation:2][citation:9]
- Latest audited financial statements [citation:2]
- Power of Attorney for authorised representative in India [citation:3][citation:9]
- PAN Card (Indian nationals) / Passport (foreign nationals) [citation:2][citation:3]
- Address proof – bank statement or utility bill (<2 months) [citation:2][citation:3]
- Recent passport-size photographs [citation:2]
- Digital Signature Certificate (DSC) – Class 3 [citation:2][citation:3]
- Rent agreement / ownership proof of registered office [citation:2][citation:3]
- NOC from property owner (if rented premises) [citation:2][citation:3]
Post-Incorporation Compliances
Annual Return (MGT-7)
File within 60 days of the Annual General Meeting (AGM) [citation:2][citation:5].
Financial Statements (AOC-4)
File within 30 days of the AGM [citation:2][citation:5].
Annual General Meeting (AGM)
Conduct within 6 months of the financial year end [citation:2][citation:5].
Income Tax Return (ITR-6)
File by 30th November (transfer pricing cases) [citation:2][citation:5].
FLA Return (RBI)
Annual foreign liabilities and assets return, due 15th July every year [citation:2][citation:5].
Director KYC (DIR-3)
Annual KYC filing for all directors by 30th September [citation:2][citation:5].
Statutory Audit
Conduct annual statutory audit by a practising Chartered Accountant before AGM [citation:2][citation:5].
Transfer Pricing Report
File Form 3CEB by 30th November for international transactions [citation:2][citation:5].
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