Indian Subsidiary
Indian Subsidiary Registration
An Indian Subsidiary Company is a company incorporated in India by a foreign company. The foreign company holds more than 50% of the total share capital, making it a subsidiary of the parent company. It operates under the Companies Act, 2013, and is considered an Indian entity for legal and taxation purposes.
Foreign investors prefer Indian subsidiary registration due to the ease of doing business, tax benefits, and access to the vast Indian market.
Compliances for an Indian Subsidiary
Annual ROC Filings – Filing MGT-7 & AOC-4 with the Registrar of Companies (ROC).
Income Tax Filing – Filing ITR-6 annually.
GST Registration & Filing – Required if turnover exceeds the prescribed limit.
Transfer Pricing Regulations – Compliance with arm’s length pricing under the Income Tax Act, 1961.
Statutory Audit – Conducted by a registered Chartered Accountant.
TDS Returns – Quarterly TDS filings for salary & vendor payments.
Board Meetings & AGM – Conduct at least 4 board meetings and 1 AGM annually.
Foreign Exchange Management Act (FEMA) Compliance – RBI reporting for foreign investments.
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LLPs must file TDS returns quarterly.
Advantages of Indian Subsidiary Registration
Access to the Indian Market – Expands business operations in one of the fastest-growing economies.
Limited Liability – The liability of shareholders is limited to their investment.
Foreign Direct Investment (FDI) Benefits – 100% FDI is allowed in most sectors under the automatic route.
Separate Legal Entity – The subsidiary has its own legal identity separate from the parent company.
Tax Benefits – Indian subsidiaries are eligible for tax exemptions and deductions under various government schemes.
Easy Fundraising – Can raise funds through venture capital, loans, and private equity.
Repatriation of Profits – Profits can be repatriated to the parent company, subject to compliance with RBI regulations.
Documentation Required for Indian Subsidiary Registration
Identity Proof of Directors & Shareholders (Passport, Voter ID, Driving License)
Address Proof of Directors & Shareholders (Utility Bills, Bank Statements)
Passport & Visa Copy (For foreign directors and shareholders)
Director Identification Number (DIN) for Indian Directors
Digital Signature Certificate (DSC) for Directors
Registered Office Address Proof (Electricity Bill, Rental Agreement, NOC from Property Owner)
Memorandum of Association (MOA) & Articles of Association (AOA)
Parent Company’s Certificate of Incorporation (Attested by Indian Embassy or Notary)
Board Resolution from Parent Company (Authorizing the registration of the subsidiary)
Declaration by Directors (INC-9 & DIR-2 forms)
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Frequently Asked Questions (FAQs)
Who can register an Indian Subsidiary?
Any foreign company looking to expand its business in India can register an Indian subsidiary.
What is the minimum capital requirement for an Indian Subsidiary?
There is no minimum capital requirement, but some industries may have specific capital regulations.
Can an Indian Subsidiary repatriate profits to the parent company?
Yes, an Indian subsidiary can repatriate profits to the parent company, subject to RBI and FEMA regulations.
What are the tax rates applicable to an Indian Subsidiary?
Indian Subsidiaries are subject to corporate tax (22% - 30%), GST, and transfer pricing regulations.
How long does it take to register an Indian Subsidiary?
The process typically takes 15-30 days, depending on approvals and documentation.
