# Indian Subsidiary Registration

> A foreign company can set up a wholly owned Indian private limited company under the FDI automatic route in most sectors. It needs at least two shareholders (the parent plus a nominee), two directors with at least one who stayed in India for 182 days or more in the financial year, apostilled or consularised parent documents, and an Indian registered office. Share capital received must be reported to the RBI in Form FC-GPR within 30 days of allotment.

Practice: Business Setup & Entity Registration — https://www.industax.com/services/business-setup/

A subsidiary is the most common way for a foreign business to operate in India because, unlike a liaison or branch office, it needs no prior RBI approval in automatic-route sectors and can do any business permitted by its objects. It is taxed as a domestic company and can choose the concessional 25.17% regime under Section 115BAA.

The setup work is mostly document logistics: board resolutions and constitutional documents of the parent notarised and apostilled, director KYC from abroad, and a resident director. After incorporation we handle the foreign remittance (FIRC and KYC from the bank), share allotment, FC-GPR, and the annual FLA return, transfer pricing and statutory audit that follow.

## Key facts

| Item | Detail |
| --- | --- |
| Route | Automatic route for most sectors; government route for restricted sectors |
| Resident director | At least one director in India 182+ days in the financial year |
| Capital reporting | FC-GPR within 30 days of share allotment |
| Annual reporting | FLA return to RBI by 15 July; Form 48 (formerly 3CEB) for transfer pricing |
| Tax rate | 25.17% under Section 115BAA (domestic company) |

## Who needs this

- Foreign companies entering India
- Global SaaS, IT and consulting firms hiring in India
- Manufacturers setting up Indian operations

## What's included

- Sector and FDI route check
- Document checklist for apostille or consularisation
- Incorporation with PAN, TAN and GSTIN
- Capital inflow, share allotment and FC-GPR
- First-year compliance and transfer pricing plan

## Documents

- Parent's certificate of incorporation and constitutional documents (apostilled)
- Board resolution of the parent authorising the investment
- Passport and address proof of foreign directors (apostilled)
- Indian registered office proof

## Process

1. **Plan** — FDI route, capital, directors and nominee decided.
2. **Incorporate** — Documents legalised and SPICe+ filed.
3. **Fund** — Capital remitted, shares allotted, FC-GPR filed.

## Also covers

- **Wholly owned subsidiary** — 100% foreign-owned Indian private company.
- **Joint venture company** — Foreign and Indian partners in one company.
- **FC-GPR filing** — RBI reporting of shares issued to non-residents.

## FAQs

### Does a foreign company need RBI approval to open an Indian subsidiary?

Not in sectors under the automatic route, where 100% FDI is allowed without prior approval. Sectors under the government route, or investors from countries sharing a land border with India (Press Note 3 of 2020), need prior government approval.

### Can all directors of an Indian subsidiary be foreigners?

All but one. Section 149(3) requires at least one director who has stayed in India for 182 days or more in the financial year. Many foreign parents appoint an Indian employee or a professional resident director.

### Is a subsidiary better than a branch office?

Usually, for operating businesses. A subsidiary needs no RBI approval in automatic-route sectors, is taxed at about 25% rather than the 35% foreign-company rate on branch profits, and keeps the parent's liability limited. A branch office suits only some activities and needs prior approval.

## Official sources

- Ministry of Corporate Affairs — MCA21 portal: https://www.mca.gov.in/
- Reserve Bank of India — FEMA notifications: https://www.rbi.org.in/Scripts/Fema.aspx
- DPIIT — Consolidated FDI Policy: https://dpiit.gov.in/policies-rules-and-acts/policies/foreign-direct-investment

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