Indian Subsidiary Company Registration

Q: What is the difference between a subsidiary and a branch office in India?

A subsidiary is a separately incorporated Indian company with its own legal identity, PAN, and full commercial ability. A branch office is an extension of the foreign parent — not a separate entity — and can only carry out activities permitted by RBI approval.

Q: Which sectors in India allow 100% FDI under the automatic route?

Most manufacturing and service sectors including IT, software, manufacturing, e-commerce (B2B), infrastructure, hospitality, and professional services. Sectors requiring approval include defence (beyond 74%), media, banking (beyond 49%), and insurance (beyond 74%).

Q: What is Form FC-GPR and when must it be filed?

FC-GPR is filed through the AD bank on RBI's FIRMS portal within 30 days of share allotment to non-residents. Requires KYC report, fair valuation certificate, and board resolution for allotment.

Q: What are the transfer pricing requirements for an Indian subsidiary?

All intercompany transactions must be at arm's length with contemporaneous documentation. Form 3CEB must be filed by 31 October. Penalties of 2% of transaction value apply for non-compliance.

Q: Can the Indian subsidiary pay management fees or royalties to the parent?

Yes, at arm's length prices under transfer pricing rules. Payments are subject to withholding tax — typically 10% under most DTAAs. Form 15CA and 15CB must be filed before each cross-border payment.

Establish a Wholly Owned or Majority-Owned Indian Subsidiary for Your Foreign Company — Compliant with Companies Act and FEMA

An Indian Subsidiary is a private limited company incorporated in India where a foreign company or foreign national holds a majority of the shares — typically 50% or more. It is the most common route for foreign companies to establish a legal presence in India for operational purposes, as it allows the subsidiary to enter contracts, own assets, hire employees, and remit profits to the parent company.

Incorporation of an Indian Subsidiary involves compliance with the Companies Act, 2013 for company formation and the Foreign Exchange Management Act (FEMA) for FDI reporting. Most sectors allow 100% FDI under the automatic route — meaning no prior government approval is required. Our Indian Subsidiary registration service covers the complete process. For other entry structures, see our foreign branch setup and liaison office services.

Our Indian Subsidiary Registration Services

FDI Route & Sector Analysis

Analysing the FDI policy for the proposed business activity — confirming whether the automatic route or government approval route applies and any applicable sectoral caps or conditions.

Name Reservation & Incorporation

Filing SPICe+ for name reservation and incorporation of the Indian subsidiary as a private limited company with the MCA — obtaining the Certificate of Incorporation with CIN.

Foreign Director Documentation

Obtaining DSC and DIN for foreign directors using their passport as identity proof and apostilled/notarised foreign address documents as required by MCA.

MOA/AOA Drafting

Drafting MOA and AOA reflecting the subsidiary's business objects, shareholding structure, and the parent company's majority ownership position.

FDI Reporting — Form FC-GPR

Filing Form FC-GPR with the RBI through the AD bank within 30 days of allotment of shares to the foreign parent — mandatory FEMA compliance for FDI inflow reporting.

Post-Incorporation Setup

Completing post-incorporation requirements — bank account opening, PAN, TAN, GST registration, statutory auditor appointment, and first board meeting compliance.

Key Features of an Indian Subsidiary

Can be 100% foreign-owned in most sectors under the automatic FDI route
Separate legal entity — distinct from the foreign parent in Indian law
Can repatriate profits to the parent as dividends after paying Indian dividend distribution tax
Subject to the same Companies Act compliance as any Indian private limited company
Foreign parent must report FDI in Form FC-GPR within 30 days of share allotment
Annual FLA Return must be filed with RBI by 15 July each year
Transfer pricing documentation required for related-party transactions with the parent

Frequently Asked Questions

What is the difference between a subsidiary and a branch office in India?

An Indian subsidiary is a separately incorporated Indian company — it is a distinct legal entity from the foreign parent with its own Indian tax identity (PAN) and full ability to carry on commercial activities, own assets, and employ staff. A branch office is an extension of the foreign parent in India — not a separate legal entity — and can only carry on activities permitted by the RBI approval. A subsidiary has more operational freedom but also more compliance obligations than a branch office.

Which sectors in India allow 100% FDI under the automatic route?

Most manufacturing and service sectors allow 100% FDI under the automatic route — meaning no prior RBI or government approval is needed. Sectors allowing 100% FDI under the automatic route include IT and software, manufacturing, e-commerce (B2B), infrastructure, hospitality, and professional services. Sectors requiring government approval or subject to caps include defence (beyond 74%), media, banking (beyond 49%), insurance (beyond 74%), and retail (multi-brand FDI requires state government approval).

What is Form FC-GPR and when must it be filed?

Form FC-GPR (Foreign Currency — Gross Provisional Return) is a FEMA filing required when an Indian company issues shares to a non-resident investor. It must be filed through the company's AD (Authorised Dealer) bank on the RBI's FIRMS portal within 30 days of the date of allotment of shares. The filing must be accompanied by a KYC report on the foreign investor from the foreign bank, a fair valuation certificate from a SEBI-registered merchant banker or Chartered Accountant, and the board resolution for share allotment.

What are the transfer pricing requirements for an Indian subsidiary?

All international transactions between the Indian subsidiary and its foreign parent or related parties must be conducted at arm's length prices and documented under transfer pricing regulations. The subsidiary must maintain contemporaneous documentation justifying the pricing of intercompany transactions and file Form 3CEB (Transfer Pricing Report) from a CA before 31 October. Failure to document or file can result in adjustments, penalties of 2% of the transaction value, and interest on additional tax.

Can the Indian subsidiary pay management fees or royalties to the parent?

Yes. An Indian subsidiary can pay management fees, royalties, technical service fees, and interest to its foreign parent — subject to arm's length pricing under transfer pricing rules and applicable DTAA provisions. Payments are subject to withholding tax in India — typically 10% for royalties and fees for technical services under most DTAAs. Form 15CA and 15CB must be filed before making such cross-border payments, and the transactions must be reported in the annual transfer pricing documentation.

Set Up Your India Operations — The Right Way

FDI route analysis, subsidiary incorporation, FC-GPR reporting, and full post-registration compliance.

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F.A.Q.

What is GSTR-9 and why is it required?

GSTR-9 is an annual GST return that summarizes all transactions reported during the financial year. It is required to ensure proper reconciliation and compliance with GST laws.

Who is required to file GSTR-9?

All regular GST-registered taxpayers are required to file GSTR-9, except composition dealers, casual taxable persons, and non-resident taxpayers.

What is the due date for filing GSTR-9?

The due date is generally 31st December following the end of the relevant financial year, unless extended by the government.

What details are included in GSTR-9?

It includes details of outward supplies, inward supplies, input tax credit claimed, taxes paid, and adjustments made during the year.

Is GSTR-9 mandatory for all taxpayers?

GSTR-9 is mandatory for most regular taxpayers, but certain small taxpayers may get exemptions based on turnover thresholds notified by the government.

What happens if GSTR-9 is not filed on time?

Late filing may result in penalties and late fees, along with potential compliance issues or notices from GST authorities.