How to Register a Subsidiary Company in India as a Foreign Entity (2025 Guide)

India is one of the fastest-growing economies in the world, and global businesses are increasingly setting up their presence here to tap into its vast consumer base, skilled workforce, and strategic market potential.

If you’re a foreign company looking to enter India, forming a wholly-owned or joint venture subsidiary company is the most effective and compliant way to establish a long-term business presence.

This in-depth guide explains how to register a subsidiary company in India as a foreign entity in 2025 — covering structure, eligibility, step-by-step procedure, taxation, FDI rules, documents, and post-registration compliance.

 

What Is a Subsidiary Company in India?

A subsidiary company is a company in which another company (the foreign parent company) holds at least 50% of the total share capital.

If the parent company holds 100% shares, it is known as a Wholly Owned Subsidiary (WOS).

The subsidiary operates as a separate legal entity registered under the Companies Act, 2013, governed by the Ministry of Corporate Affairs (MCA) and Foreign Exchange Management Act (FEMA) for foreign investments.

 

Why Set Up a Subsidiary Company in India?

Here are the main reasons why global businesses prefer setting up subsidiaries in India:

1. 100% Foreign Ownership (in Most Sectors)
   The Government of India allows 100% FDI under the automatic route in most sectors — meaning no prior approval is needed.
   
   
2. Limited Liability
   The liability of shareholders (including the foreign parent) is limited to the capital invested.
   
   
3. Separate Legal Identity
   The subsidiary is treated as a distinct legal entity from its parent — capable of owning assets, entering contracts, and paying taxes in its own name.
   
   
4. Access to Indian Market
   India offers a large, fast-growing domestic market and strategic access to South Asian economies.
   
   
5. Tax and Compliance Advantages
   Indian subsidiaries enjoy tax benefits under Double Taxation Avoidance Agreements (DTAA) and easier repatriation of profits.
   
   
6. Ease of Operation
   Compared to branch offices or liaison offices, subsidiaries offer full freedom to conduct business across sectors.

 

Types of Subsidiaries in India (Based on Ownership)

Type	Foreign Shareholding	Description
Wholly Owned Subsidiary (WOS)	100%	Fully owned by the foreign company; complete control and decision-making power.
Joint Venture Subsidiary	50%–99%	Owned jointly by a foreign company and Indian partner; ideal for sectors with partial FDI restrictions.

 

 Eligibility Criteria for Foreign Companies

To register a subsidiary in India, a foreign entity must:

• Have at least one Indian resident director.
• Have a registered office address in India.
• Appoint at least two directors and two shareholders.
• Ensure compliance with FDI sectoral caps and FEMA regulations.
• Obtain Digital Signature Certificates (DSC) and Director Identification Numbers (DIN) for all directors.

 

Step-by-Step Process to Register a Subsidiary Company in India (2025)

Here’s the complete process of registering a foreign subsidiary under MCA rules:

Step 1: Obtain DSC and DIN

• Digital Signature Certificate (DSC) is mandatory for all directors to sign incorporation forms online.
• Apply for Director Identification Number (DIN) through the SPICe+ form.
  
  

Step 2: Reserve Company Name (RUN/Part A of SPICe+)

• Choose a unique name as per MCA’s naming guidelines.
• The name should end with “Private Limited.”
• Use RUN (Reserve Unique Name) or Part A of SPICe+ for name approval.
  
  

Tip: Include part of the foreign company’s name with NOC from the parent company if applicable.

Step 3: Draft the MOA & AOA

• Prepare the Memorandum of Association (MOA) and Articles of Association (AOA) specifying:
  • Business objectives
  • Shareholding pattern
  • Rights and duties of shareholders
    
    

These must comply with Indian Companies Act provisions.

Step 4: File Incorporation Application (SPICe+ Part B)

• File the SPICe+ form (INC-32) along with supporting documents.
• The application includes PAN, TAN, EPFO, ESIC, and GST registration integration.
  
  

Step 5: Submit Required Documents

Documents from Foreign Parent Company:

• Certificate of Incorporation (notarized/apostilled)
• Board Resolution authorizing subsidiary setup in India
• Memorandum & Articles of Parent Company
• Proof of registered office abroad
  
  

Documents from Indian Subsidiary:

• Identity and address proof of directors/shareholders
• Proof of registered office address in India (utility bill + NOC)
• Subscriber sheet (MOA) and Declaration (INC-9)

Step 6: Get Certificate of Incorporation

Once verified, MCA issues a Certificate of Incorporation (COI) with CIN (Corporate Identification Number) — marking legal existence of the subsidiary.

Step 7: Post-Incorporation Registrations

• Apply for PAN & TAN
• Open an Indian bank account
• File Form FC-GPR with RBI within 30 days of share allotment
• Register for GST, ESIC, EPFO (if applicable)

 

FDI Compliance for Subsidiary Companies

Foreign investment in Indian subsidiaries is regulated under FEMA (Foreign Exchange Management Act, 1999). Key compliance points include:

1. Check FDI Route

   • Automatic Route: No RBI approval needed.
   • Government Route: Prior approval required (for restricted sectors).
     
     

2. Reporting to RBI

   • File Form FC-GPR after share allotment.
   • File Annual Return on Foreign Liabilities and Assets (FLA) before July 15 each year.
     
     

3. Adhere to Pricing Guidelines

   • Shares issued must be at fair value, determined by a SEBI-registered merchant banker or CA.
     
     

4. Repatriation Rules

   • Dividends can be repatriated freely after tax.
   • Royalties and technical fees are also allowed under FEMA.

 

Taxation of Subsidiary Companies in India (2025)

Tax Component	Rate (FY 2025)	Notes
Corporate Tax	25% (for turnover ≤ ₹400 crore)	Standard domestic rate
MAT (if applicable)	15%	On book profits
Dividend Distribution	Taxable in shareholders’ hands	DDT removed
Transfer Pricing	Applicable	For transactions with parent/related entities
GST	18% standard rate	Based on goods/services supplied

Foreign companies can also claim DTAA benefits to avoid double taxation.

 

Advantages of Setting Up a Subsidiary in India

1. Full Control for Parent Company
   Foreign parent can manage operations independently under Indian laws.
   
   
2. Limited Liability
   Shareholders’ liability is limited to share capital invested.
   
   
3. Separate Legal Entity
   The subsidiary can own assets, open bank accounts, and enter contracts independently.
   
   
4. Access to Local Market
   Allows smooth entry into Indian market with regulatory compliance.
   
   
5. Tax Benefits
   Eligible for incentives under DTAA, startup schemes, and state-level subsidies.

 

Common Mistakes to Avoid

• Choosing a company name that violates MCA naming rules
• Missing FDI filing timelines (Form FC-GPR, FLA)
• Improper valuation of shares under FEMA norms
• Appointing all foreign directors (must have one Indian resident director)
• Delayed filing of annual returns and compliance

 

FAQs on Subsidiary Company Registration in India

Q1. Can a foreign company own 100% of an Indian subsidiary?
Yes, in most sectors under the automatic route, 100% foreign ownership is permitted.

Q2. Is it mandatory to have an Indian director?
Yes, at least one resident director (staying in India ≥ 182 days in a year) is mandatory.

Q3. What is the minimum capital requirement?
There is no minimum paid-up capital requirement under the Companies Act, 2013.

Q4. How long does the registration process take?
Usually 10–15 working days, subject to document accuracy and approvals.

Q5. What post-registration compliance is required?
Annual filings with MCA, RBI (for FDI), income tax return, GST returns, and statutory audits.

 

Conclusion: Simplify Your Subsidiary Registration with India Company Setup

Setting up a subsidiary company in India as a foreign entity is one of the most reliable ways to enter the Indian market legally and efficiently. But navigating MCA filings, FEMA regulations, RBI reporting, and tax compliance can be complex.

At India Company Setup, we specialize in helping foreign businesses establish and manage their Indian subsidiaries seamlessly. Our services include:

• Subsidiary company registration
• DIN, DSC, PAN, TAN, and bank account setup
• FDI and FEMA compliance
• Annual filings and taxation support

Whether you’re forming a wholly-owned subsidiary or a joint venture, we make the process faster, transparent, and 100% compliant.

Contact us Now! Call 9915731447 today and let our experts handle the paperwork while you focus on expanding your global presence in India.