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Set Up Your Indian Subsidiary for Global Business

An Indian Subsidiary is an Indian-incorporated company established by a foreign company or foreign investor to conduct business in India — with its own Indian corporate identity, books, contracts and compliance obligations.

Foreign investment must comply with the applicable FDI policy, FEMA regulations, sectoral caps and entry route. We take you through sector eligibility, ownership structure, MCA incorporation and FEMA/RBI reporting.

FDI Eligibility Check

Ownership Structure

MCA Incorporation

FEMA / RBI Reporting

Foreign Shareholder Docs

Tax & Transfer Pricing

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Planning an Indian Subsidiary?

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Overview

Indian Subsidiary Is Not the Same as a Branch Office

An Indian Subsidiary is a separate Indian company incorporated under Indian company law, where a foreign company/investor holds the required shareholding. It has its own Indian corporate identity, maintains its own books, enters into contracts, employs people and complies with Indian tax and corporate laws — while the foreign parent remains a separate legal entity.

Subsidiary vs Branch Office

A subsidiary is a separate Indian company; a branch office is an extension of the foreign company subject to a different regulatory framework. These should never be treated as the same structure.

100% FDI Depends on the Sector

Where the sector permits 100% FDI under the automatic route, a wholly owned subsidiary is possible — but this is not universal across every business activity.

FEMA Reporting Is Ongoing

The automatic route does not mean no compliance — FEMA, FDI policy, sectoral conditions, pricing rules and reporting requirements continue to apply.

Global business team reviewing India market entry plans

FDI & FEMA CompliantIndian Subsidiary Setup

What We Help You With

A complete Indian subsidiary setup, from FDI eligibility to ongoing FEMA/RBI compliance.

FDI Eligibility Check

Sector, cap, entry route and sectoral conditions checked before incorporation.

Ownership Structure

Wholly owned subsidiary, joint venture or majority foreign ownership, as permitted.

MCA Company Incorporation

Name, DSC, DIN, MOA, AOA and registered office up to the Certificate of Incorporation.

Indian Subsidiary

Foreign-Owned
Indian Company

Foreign Shareholder Documentation

Parent-company documents, board resolution, authorisation and KYC.

FEMA / FDI Reporting

Investment documentation, share allotment and applicable RBI reporting support.

Tax & Compliance Setup

PAN, TAN, GST applicability, bank account and accounting setup.

The First Important Decision

Which Ownership Structure Applies to You?

Ownership depends on the applicable FDI rules for your specific sector — not a single universal answer.

Structure	Description	Applicable When
100% Wholly Owned Subsidiary	Foreign parent holds full shareholding	Sector permits 100% FDI under the automatic route
Joint Venture	Foreign + Indian shareholders	Sector caps require Indian participation
Majority Foreign Ownership	Foreign parent holds a controlling but partial stake	Sector permits majority but not full foreign ownership
Other Permitted Structures	Sector-specific arrangements	Depending on sector-specific conditions

RBI's FDI framework contains sector-specific caps and entry routes — 100% foreign ownership should never be assumed available for every business activity without checking the sector first.

Entry Route

Automatic Route vs Government Approval Route

Automatic Route

Foreign investment can generally be made without prior Government approval, provided applicable FDI conditions are met — compliance obligations still apply.

Government Approval Route

Some sectors/activities require prior Government approval or carry additional conditions before foreign investment can proceed.

Assessment Before Investment

Business activity → FDI sector → FDI cap → entry route → sectoral conditions → approval/automatic route — checked before incorporation.

Common Use Cases

Indian Subsidiaries Across Business Models

The applicable FDI rules and setup considerations vary by business activity.

Software / SaaS

A common route for foreign tech companies building an Indian development team.

Manufacturing

Foreign manufacturers setting up a factory/manufacturing unit and Indian sales.

E-Commerce

FDI rules differ between marketplace and inventory-based models — must be checked carefully.

Financial Business

Lending, NBFC, payments or insurance need additional sectoral regulator licensing.

Film / Media

Foreign media/production companies must check sector-specific FDI and media rules.

Consulting / Services

International consulting and professional-service businesses entering India.

The Registration Process

How Indian Subsidiary Registration Works

From business-activity review to a fully incorporated, FEMA-compliant Indian company.

FDI Eligibility & Structure

Assess the Indian business activity, FDI sector, cap, entry route and the right ownership structure.

Company Incorporation

Directors, name approval, DSC/DIN, MOA & AOA and MCA filing up to the Certificate of Incorporation.

Foreign Investment & FEMA Reporting

Bank account, share subscription through banking channels, and applicable RBI/FEMA reporting.

Ongoing Compliance

GST/TDS applicability, employees, accounting, and annual MCA, tax and FEMA compliance.

Documents & Information

What You Should Keep Ready

Foreign parent, director, registered office, shareholding and business documents — the exact list depends on the foreign parent's jurisdiction.

Foreign Parent's Charter Documents

Director Passport & Address Proof

Indian Registered Office Proof

Shareholding Pattern & Board Resolution

Business Plan & Proposed Operations

Investor KYC & Share Subscription Docs

Documents originating outside India may need notarisation, apostille or consularisation depending on the country, along with translation where the document is not in English.

Clear Distinction

Indian Subsidiary vs Branch Office

Different structures, different regulatory frameworks — the right choice depends on what the foreign business wants to do in India.

Feature	Indian Subsidiary	Branch Office
Legal status	Separate Indian company	Extension of the foreign company
Governing framework	Indian Companies Act	A different regulatory framework applicable to branches
Liability	Separate legal entity, subject to applicable law	Tied to the foreign company
Ownership	Foreign parent holds shares as per FDI rules	Direct extension, no separate shareholding
Compliance	Indian MCA, tax and FEMA compliance as a company	Separate branch-specific regulatory compliance

There is no universal answer on which is "better" — the right structure depends on business activity, tax position, liability, ownership and regulatory requirements.

Important for Foreign-Owned Companies

Tax, Transfer Pricing & Repatriation of Profits

These matters are what typically differentiate a foreign-owned Indian subsidiary from an ordinary domestic incorporation.

Transfer Pricing

Payments to the foreign parent for management fees, technical services, royalty or shared services can trigger transfer-pricing rules, including the arm's-length principle and documentation requirements.

Repatriation of Profits

Profits can be distributed through legally permitted mechanisms, subject to Companies Act, tax, FEMA and withholding-tax requirements — not withdrawn freely at any time.

Related Party Transactions

Service agreements, royalty, loans and cost-sharing between parent and subsidiary should be properly documented under company-law and tax requirements.

What You Receive

After Successful Subsidiary Registration

The exact deliverables depend on the ownership structure and service scope.

Certificate of Incorporation, MOA & AOA PAN & TAN Foreign Investor & FDI/FEMA Documentation Registered Office & Bank-Account Setup Support

Incorporation is only the beginning — MCA, income tax, GST/TDS, FEMA/RBI reporting, transfer pricing and annual filings continue to apply after the subsidiary is formed.

Clear Expectations

What Indian Subsidiary Registration Does Not Guarantee

Company incorporation provides the corporate structure. It does not by itself unlock every business outcome.

Automatic 100% FDI in every sector

Automatic Government approval

Automatic GST registration or licence

Tax exemption or government funding

Visa or work permit automatically

Permission for regulated financial activity

Common Misconceptions

Mistakes to Avoid

A few assumptions that often trip up first-time foreign investors.

"Foreign company can own 100% of any Indian company"

Incorporation ends foreign-investment compliance

Foreign parent can freely transfer any amount to India

Subsidiary and branch office are the same

Indian subsidiary can do any business it wants

Foreign parent can withdraw Indian company funds anytime

FAQs

Frequently Asked Questions

Clear answers before you register your Indian subsidiary.

A company incorporated in India that is controlled/owned by a parent company or shareholders, including a foreign parent where permitted under FDI rules.

In sectors where 100% FDI is permitted under the applicable route and conditions, yes — but this is not universal across every sector.

No. It depends on the sector's FDI rules — some sectors permit a wholly foreign-owned subsidiary without an Indian partner.

No. Some investments fall under the automatic route; others may require Government approval or carry additional sectoral conditions.

Yes, subject to Companies Act requirements — the company must also satisfy the applicable resident-director requirement.

No. GST applicability depends on the company's business and applicable provisions, not merely on having a foreign shareholder.

Potentially, through legally permitted transactions such as dividends or properly structured payments, subject to Companies Act, tax and FEMA requirements.

It can be, particularly for international transactions between the Indian subsidiary and its associated foreign enterprise.

There is no universal answer — the right structure depends on the business activity, tax position, liability, ownership and regulatory requirements.

Ready to Set Up Your Indian Subsidiary?

Build your foreign business presence in India, FDI and FEMA compliant from day one.

Business Activity → FDI Eligibility → Sectoral Cap → Entry Route → Ownership Structure → MCA Incorporation → PAN/TAN → Foreign Investment → FEMA Reporting → GST/Licences → Business Operations → Ongoing Compliance

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