Indian Subsidiary Company Registration
Set Up Your Foreign or Wholly Owned Subsidiary in India

A subsidiary company is controlled by a foreign parent company, which owns at least 50% of its share capital. The parent can hold either a partial or a full stake, and through that holding it influences the subsidiary's business operations and strategic decisions. Importantly, a subsidiary in India operates as a separate legal entity, capable of owning property, signing contracts, and initiating legal proceedings independently of its parent.

So the difference between a wholly owned subsidiary and an ordinary subsidiary comes down to the shareholding. A wholly owned subsidiary is fully foreign-owned, while a subsidiary company has at least one other shareholder. Both are separate legal entities, and both are popular routes for foreign companies entering India. Most foreign subsidiaries are incorporated as a private limited company, and our work connects with FDI filing with the RBI and ongoing company compliance, so your subsidiary is set up and supported from day one.

Together, these make a subsidiary far more powerful than a representative arrangement. The foreign parent gets a genuine operating company in India, with full access to the market and the protection of limited liability.

Indian subsidiary company registration has a clear set of requirements. Meet these, and incorporation is straightforward: a unique company name compliant with MCA naming guidelines; a minimum of 2 shareholders, with the parent company able to hold up to 100% of the shares; a minimum of 2 directors, at least 1 of whom must be a resident of India; a mandatory registered office — physical or virtual — in India; no minimum capital requirement under Indian law; and statutory compliance covering AGMs, board meetings, annual filings, and tax returns, supported by a Company Secretary for secretarial filings.

Documents Required for Indian Subsidiary Registration

Foreign incorporation needs a specific document set, and foreign documents usually must be notarised and apostilled. The key documents required for Indian subsidiary registration are: the certificate of incorporation of the foreign parent company; a board resolution approving the investment; identity and address proof of the proposed directors; proof of the registered office address in India; and the shareholding details. A Digital Signature Certificate is also required for the directors, since all MCA forms are signed digitally.

A foreign subsidiary carries an ongoing compliance load that is heavier than a domestic company's, because it sits under both corporate and foreign-exchange rules. The main obligations are FEMA compliance — adherence to foreign investment rules and RBI reporting; ROC compliance — filing of annual returns, financial statements, and board resolutions; statutory audit — mandatory for all Indian companies, irrespective of turnover; income tax return filing — annual ITRs and TDS compliance; GST filing — monthly or quarterly and annual GST returns; and transfer pricing — required where transactions occur between the subsidiary and the parent company.

That last point is critical for any group. Where the subsidiary transacts with its parent, arm's length pricing must be maintained, and our transfer pricing team documents it correctly. FDI reporting to the RBI is handled through filings such as FC-GPR after shares are issued to the foreign parent.

Taxation of Indian Subsidiary Companies

On the tax side, an Indian subsidiary is taxed as a domestic company. The corporate tax rate is approximately 25.17%, including surcharge and cess. Withholding tax applies on certain payments to the parent — broadly 40% on other income and 50% on royalty or technical service fees, subject to treaty relief. GST applies to goods and services and varies by category, and transfer pricing rules require arm's length pricing on inter-company transactions.

Foreign ownership is governed by India's FDI policy, and it is more open than many expect. In most sectors — such as IT, manufacturing, and consultancy — 100% FDI is allowed under the automatic route, meaning no prior government approval is required. Some sectors, including defence, telecom, media, and mining, sit under the approval route and need prior clearance or face FDI caps. Confirming the route for your sector is the first strategic step in any Indian subsidiary plan.

The other early decision is structure. A private limited subsidiary needs a minimum of 2 directors (1 an Indian resident) and 2 shareholders, can be 100% foreign-owned, and is by far the most common choice. A public limited subsidiary needs at least 3 directors and 7 shareholders and can be listed or privately held. For most foreign parents, the private limited subsidiary offers the right balance of flexibility, full ownership, and manageable compliance.

Setting up a foreign subsidiary touches company law, tax, and foreign-exchange rules at once — which is exactly where an experienced local partner earns its place. We provide end-to-end legal, tax, and regulatory services to foreign companies establishing operations in India.

Our support covers company name reservation and legal structuring, director DIN and DSC procurement, ROC and RBI filing compliance, PAN, TAN, and GST registration, statutory audit and annual filing, and FEMA, RBI, and income tax compliance. For overseas parents without a local presence, we also offer nominee director and virtual office solutions, so you can meet the resident-director and registered-office requirements smoothly. A nominee director arrangement and a compliant virtual office often make the difference between a fast incorporation and a stalled one. Whether you are a startup or a global enterprise, we offer customised subsidiary registration packages to suit your business and timelines.