Set up an Indian subsidiary company to expand your parent business into the Indian market with a separate legal entity while maintaining control and compliance under Indian corporate law.
An Indian subsidiary company is a corporate entity incorporated under the Indian Companies Act, 2013 where a foreign parent company holds a controlling stake, either wholly or partially. As a separate legal entity, the subsidiary conducts business in India independently, yet remains under the strategic control of the parent organization. This structure provides foreign businesses with a formal presence in India’s fast-growing economy and allows them to own property, enter contracts, hire employees, sell products or services, and conduct banking operations locally under Indian regulations. Setting up a subsidiary typically involves choosing a suitable company name, obtaining Digital Signature Certificates (DSC) and Director Identification Numbers (DIN) for directors, preparing a Memorandum of Association (MOA) and Articles of Association (AOA), and filing incorporation documents with the Ministry of Corporate Affairs. At least two shareholders and two directors — one of whom must be an Indian resident — are usually required, and no minimum capital requirement applies. An Indian subsidiary may be wholly owned or majority-owned by the parent, and it is treated as a resident entity for tax and compliance purposes. Establishing a subsidiary can facilitate better market access, operational control, limited liability protection, and stronger credibility among customers and partners within India’s regulatory framework.
The subsidiary is a distinct company under Indian law with its own assets and liabilities.
Enables foreign businesses to operate directly in the Indian market.
Liability of shareholders is limited to the amount invested.
Builds trust with Indian customers, suppliers, and regulators.
Tap into India’s expanding economy with a formal presence.
Meet Indian legal and tax obligations as a resident company.
Maintain control of local operations while leveraging parent support.
Indian subsidiaries may benefit from incentives and structured tax planning.
Reserve a unique company name with the Ministry of Corporate Affairs through the SPICe+ form.
Get Digital Signature Certificates and Director Identification Numbers for proposed directors.
Draft the company’s Memorandum and Articles of Association reflecting the parent company’s business objectives.
File SPICe+ Part B and incorporation forms online with necessary attachments to obtain the Certificate of Incorporation.
Discuss your expansion plans, FDI strategy, and regulatory requirements.
Gather identity proofs, registered office proof, MOA/AOA drafts, and board resolutions.
File the incorporation package with the Ministry of Corporate Affairs via SPICe+ portal.
Apply for PAN, TAN, GST, and other statutory registrations as needed.
Name may be rejected by the authorities.
How to avoid: Ensure the name complies with rules and is distinct.
Filing may be deemed invalid.
How to avoid: Appoint at least one Indian resident director.
Delays in registration.
How to avoid: Prepare complete identity, address, and incorporation documents.
Non-compliance penalties.
How to avoid: Register for PAN, TAN, GST, EPFO/ESIC, etc., after incorporation.
It is a company incorporated under Indian law where the parent company holds a controlling stake and operates under the Companies Act.
At least two directors are required, with one being an Indian resident.
There is no statutory minimum capital requirement for subsidiary registration in India.
Yes, a foreign parent can wholly own the subsidiary if permitted under the applicable FDI policy.
Post incorporation, the subsidiary must obtain PAN, TAN, GST (if applicable), and comply with annual ROC filings and tax filings.
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