Subsidiary Company Registration in India

We’ll get your company registered, set up the payroll, accounting and tax filing, and help open a bank account online — no need to go anywhere

Requirements and facts about company registration in India

India’s company registration process is guided by the Companies Act, 2013. This act lays out the full details of what’s required pre-incorporation, post-incorporation and other details. Below are few important requirements. Let’s take a proper look at the different essential bits.

Company Name

Your new business needs a name. Your name can’t be the similar as another existing business’s name or trademark. There are many restrictions on name registration unlike other countries

Shareholders

The parent company can be a 100% shareholder or any 2 foreign nationals can be the shareholder. Its not necessary to have a Indian resident as shareholder

Sharecapital

Unlike other countries there is no requirement of minimum capital in India. We suggest companies to keep a capital of atleast USD 5000

Directors

Minimum 2 directors are mandatory. On that atleast 1 director should be a Indian resident. We can provide you with nominee directorship services

Registered Address

A Registered address is the address of your company. It’s what goes into India’s official government records. Under the Company Ordinance, every company must have a registered address in India. We can provide you with virtual office address.

Annual General Meeting

According to the Companies Ordinance, every company in India must hold at least one general meeting per year. It should also hold 2 board meetings.

Company Secretary

It’s mandatory to file 3 secretarial returns every year. They are filed by company secretary and we assist you with the same. A statutory auditor is also appointed

Tax

The professional fees including government fees for company registration is USD 1400. Once you are incorporated you have to pay tax on profit @ 25.36%. Also GST is applicable on domestic sales. GST returns are monthly and 1 annual tax return.

Annual Complinces

India is a bit unusual when it comes to compliances. Statutory Audit is mandatory even for smallest of the companies. A statutory auditor needs to be appointed and an annual filing every year is mandatory.

Steps, documents and all the details about registering a subsidiary in India

India, with its pro-business policies and vast market size, has emerged as an attractive destination for global businesses. The country’s laws permit foreign companies to establish subsidiaries and leverage the immense opportunities offered by the Indian market. This article provides a detailed guide on setting up a subsidiary in India, highlighting the benefits, the process, and the tax implications. Why India?

  • Large, diverse consumer base with growing purchasing power
  • Access to a skilled and cost-effective workforce
  • Government policies promoting foreign direct investment (FDI)
  • Strategic location with proximity to key Asian markets

Types of Subsidiaries in India

  1. Wholly-owned subsidiary: Here, the parent company owns 100% of the subsidiary’s shares. However, this type of subsidiary can only be formed in sectors that permit 100% Foreign Direct Investments (FDI). The sectors where 100% FDI allowed are almost all sectors except the below.
  2. Subsidiary company: In this case, the parent company owns 50% or less than 50% of the subsidiary’s shares.

The sectors where 100% FDI is not allowed are:

Defence Sector, Real Estate, Print Media, Mining, Multibrand B2C 

Steps to Set Up a Subsidiary in India

Incorporating a subsidiary in India involves several steps:

    1. We apply for Digital Signature Certificate (DSC) online. Video verification and 2-factor authentication are needed.
    2. Apply for desired business name via the Registrar of Companies.
    3. Prepare the Memorandum and Articles of Association.
    4. Fill out an online incorporation application.
    5. Request a certificate to begin operations.
    6. Register for GST.

Private Limited Company

This is the most common structure preferred by 99.99% of the companies coming in India. It is the most credible structure – here

Branch Office

This is inly suitable for Banks and financial institutions. The tax rate is very high and there are restrictions on many activities.

Liason Office

This is only suitable for airline companies.

Benefits of Setting Up an India Subsidiary

  • Economical cost of resources
  • Less cost of compliance
  • Income tax rate of only 25%
  • Easy repatriation of Dividend
  • Huge population that is market
  • Rising per capita income
  • Progressive government

Expert Consultation and Guidance from Business Setup team

  • Discovery Call – 15-30 minutes video call wherein we answer all your questions regarding the Indian Setup.
  • Cost estimation – Based on your requirements we give you a quotation for company registration and the yearly expenses you will incur. This helps to ease the decision-making process
  • Nominee Director Service – We offer completely secure nominee director services. You have the undated, signed resignation letter of the director so that you can terminate the services anytime you want.
  • Company Registration – Hassle-free company registration service. You pay only after the company is registered
  •  Bank Account Opening – We connect you with a banker and assist you with the bank account opening.
  • Payroll, tax Filing, and Book keeping – We manage the company’s payroll, books, and tax filing.

Post-Registration Support and Compliance

With our experience of more than 15 years we ensure that all your compliances and tax filings are completed on time.

Conclusion:

Expanding your business to India can unlock new growth opportunities and enhance your global presence. By understanding the benefits, legal requirements, and registration process, and leveraging comprehensive support, foreign businesses can successfully establish a subsidiary or entity in India and tap into its vast market potential.

Frequently Asked Questions for subsidiary registration in India

Subsidiary company in India can be registered online. You need minimum 2 directors and 1 should be resident Indian. Minimum 2 shareholders are required. The process can be completed in 10 days. 

An incorporated entity formed and registered under the Companies Act, 2013. It is a distinct legal entity, apart from its shareholders. It has a limited liability and can have upto 200 shareholders. To register a subsidiary company minimum 2 directors are required and atleast 1 should be a Indian resident. Its not mandatory to have a Indian shareholder, so foreign national can hold 100% share holding.

The office address is mandatory to register a company in India. It can be commercial, residential or a virtual office. A utility bill of the proposed address along with the rental agreement is required.

Minimum 2 directors are required and atleast 1 should be Indian resident.
Minimum 2 shareholders are required. A company, individual, foreign company, NRI or foreign national can be shareholders in the company.

There is no minimum capital required for a company. You can register a company with as low as $100 capital.

Its not necessary to give shares to a Indian resident. 100% shares can be held by the foreigners.
But it is important to note that there should be minimum 3 shareholders. So if you want to have a subsidiary company 99.99% shares can be held by the foreign company and the remaining 0.01% can be help by any other foreign individual or a foreign company.

Yes government has restricted 100% shareholding in the following sectors

  1. Multi Brand Retail
  2. Aviation
  3. Railways
  4. Infrastructure
  5. Agriculture
  6. Media

Where can I find more details about the restriction by the government?
You can refer http://www.makeinindia.com/policy/foreign-direct-investment for more details on the FDI policy of the government

Its necessary to have a address proof that is any utility bill and a rent agreement. The company can be registered at residential address , commercial address or a virtual address. BusinessSetup can provide you with virtual addresses in all major cities in India.

No it’s a completely online process. Though you still need to courier some documents to India.

Once the company is incorporated the following steps and registrations are required

  1. Opening a bank account and depositing the share capital amount.
  2. Issuing the share certificates
  3. Appointing a Auditors within 30 days of registration
  4. GST registration
  5. Shopact and PT
  6. Having important agreements like employment agreement, vendor agreement in place.

The labour laws in india are not that stringent:

  1. Professional tax of Rs 200/employee per month has to be paid
  2. ESIC (employee state insurance scheme) id number of employees is above 10
  3. PF (provident fund) is applicable if the employees is above 20
  1. Tax Filing
    • GST filing every month
    • TDS filing every quarter
    • Annual income tax return filing
  2. Audit
    • Statutory Audit annually
    • Tax Audit annually
    • GTs Audit annually
  3. Secretarial compliances
    • 4 board meeting every year
    • Annual general meeting of shareholders
    • AOC 4 and MGT 7 filing annually

The liability of the Parent company is limited to the extent of its shareholding in the WOS. The assets of the foreign company are not subject to any attachments.

The foreign subsidiary companies are taxed at a similar rate as domestic companies. The tax rate is 26% if income in below 10 Million INR. When the company repatriates the dividend to the parent company the dividend distribution tax is 20.592%

The process to open a account in India is a bit tedious. It takes minimum 20-25 days for a foreign company to open a company in India. All the notarized and appostiled documents of a foreign nationals are required to be submitted to the bank.

The subsidiary company can transfer the fees in form of royalty, fees or dividend after paying taxes in India

A subsidiary company in India is a company that is fully or partially owned and controlled by another company, known as the parent company.

To register a subsidiary company in India, the following documents are required:

  • A Memorandum of Association and Articles of Association
  • Board Resolution of the parent company authorizing the incorporation of the subsidiary
  • Form SPICE and other relevant forms as per the Companies Act, 2013

The process for registering a subsidiary company in India includes:

  • Obtaining Director Identification Number (DIN) and Digital Signature Certificate (DSC)
  • Filing of Form SPICE and other relevant forms with the Registrar of Companies (ROC)
  • Obtaining a certificate of incorporation from the ROC

A LLC from USA can register a Subsidiary company in India. A subsidiary company is a private limited company 

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