An Indian Subsidiary refers to a company incorporated in India that is majority-owned or wholly-owned by a foreign company (called the parent or holding company). This is a common structure for foreign businesses looking to enter or operate in India.
An Indian subsidiary is:
A company registered under the Companies Act, 2013.
A private limited company or public limited company.
Controlled by a foreign entity, which holds more than 50% of the shares.
100% Foreign Ownership allowed in many sectors under the automatic route (no government approval needed).
Treated as a domestic Indian company for taxation purposes.
Full access to the Indian market.
Limited liability for shareholders.
Easier to hire locally and establish a strong local presence.
| Requirement | Details |
|---|---|
| Minimum Directors | 2 (at least 1 must be an Indian resident) |
| Minimum Shareholders | 2 (can be foreign or Indian individuals/companies) |
| Authorized Capital | No minimum requirement (but ₹1 lakh is typical for a private limited) |
| Registered Office in India | Mandatory |
| Digital Signature (DSC) | Required for all directors/shareholders |
| Director Identification Number (DIN) | Required for directors |
Obtain DSC & DIN for proposed directors.
Name Reservation (RUN or SPICe+ Part A).
Filing of SPICe+ Form (Part B) with MoA, AoA, PAN, TAN.
Company Incorporation Certificate issued by ROC.
Open Bank Account in India.
File for Foreign Investment Reporting with RBI via the FIRMS portal (FC-GPR form).
FEMA Compliance (for reporting foreign investments).
GST Registration, if applicable.
Tax registrations: PAN, TAN, TDS.
Annual filings with MCA.
Income Tax Returns, ROC filings, Board meetings, etc.
Foreign Direct Investment (FDI) is allowed under automatic or approval routes depending on the sector (e.g., retail, defense require approval).
Comply with transfer pricing regulations for transactions between Indian subsidiary and foreign parent.
Profit repatriation is allowed but must follow RBI and FEMA norms.
