How to Register a Subsidiary Company in India (Step-by-Step for Foreign Founders)

This guide is for founders and finance teams at companies based outside India — in the USA, UK, Europe, Singapore or anywhere else — who want their own legal entity in India to hire, sign contracts, invoice in rupees and hold local assets.

It covers who a subsidiary suits, the exact steps, real costs, how foreign subsidiaries are taxed, and the friction points that official portals never mention.

One expectation to set straight away: incorporating the company is the fast part. Opening the bank account is what holds founders up — banks run enhanced KYC on overseas directors, and that single step adds three to four weeks. Plan around it from day one.

Who should set up a subsidiary in India — and who shouldn't?

A subsidiary is the right structure if you need to hire employees on local payroll, sign customer or vendor contracts, raise India-side capital, or hold assets in India. It is a separate legal entity, so the parent's liability is ring-fenced to its shareholding.

It is overkill if you only want to test the market or pay a few contractors. In that case a contractor arrangement or an Employer of Record (EOR — a service that employs people on your behalf so you don't need your own entity) is faster and cheaper. The subsidiary makes sense once you are committed to India for the medium term.

How long does it take to register a subsidiary in India?

Incorporation takes about 2–3 weeks (10–20 working days) once your documents are apostilled and complete. The certificate of incorporation, PAN and TAN are issued together at the end of the filing.

The bank account is the slow part. For a foreign-owned company it takes a further 20–25 days because the bank verifies overseas directors and shareholders. So the honest end-to-end timeline to "fully operational" is closer to 6–8 weeks, not the two weeks most pages quote.

What are the requirements to register a subsidiary?

• Shareholding: the foreign parent can own up to 100% in most sectors (sector caps apply — see the tax and FDI notes below).
• Directors: minimum 2, and at least 1 must be resident in India — defined as present in India for 182 days or more in the previous financial year. We provide resident director services if you don't have one.
• Shareholders: minimum 2. A common structure is 99.99% held by the parent company and 0.01% by a second foreign individual or entity.
• Capital: no statutory minimum.
• Registered office: a physical, residential or virtual address with a recent utility bill and rent or ownership proof.

What documents do you need?

• Parent company: certificate of incorporation / charter, address proof, and a board resolution or power of attorney naming the authorised signatory — all apostilled.
• Directors and shareholders: apostilled or notarised passport copies, address proofs, photos, and DIN (Director Identification Number) if already held.
• Registered office: lease deed or ownership proof plus a utility bill.
• Business scope: objects of the company, industry code, initial capital and share allotment details.

What are the steps to incorporate?

The filing is fully online through the MCA (Ministry of Corporate Affairs) portal. Six stages take you from documents to a live, bankable company. The interactive checklist further down lets you tick these off as you go.

1. Prep & KYC

Gather parent documents, director IDs and proofs of address. Fix the shareholding and board structure, and pick an exact company name.

2. Digital setup

Obtain Digital Signature Certificates (DSC — India's legally binding electronic signature) for the directors, and DIN where needed.

3. Name & charter

Reserve the name and finalise the MoA and AoA (Memorandum and Articles of Association — the company's charter documents) with your Indian business objects.

4. SPICe+ filing

File SPICe+ with the Registrar of Companies (ROC), alongside AGILE-PRO-S to apply for GST, EPFO/ESIC and to initiate the bank account.

5. Certificate of Incorporation

Receive your CIN, PAN and TAN, issue share certificates, and update the statutory registers.

6. Bank account & go live

Open the current account, bring in capital, file INC-20A (commencement of business) within 180 days, and put inter-company agreements and payroll in place.

How are foreign subsidiaries taxed in India?

An Indian subsidiary is taxed as a domestic company, not at any special "foreign" rate. Under the concessional regime (section 115BAA) the effective rate is about 25.17% including surcharge and cess. New manufacturing companies (115BAB) pay about 17.16%. If you don't opt in, older slabs of 25% (turnover up to ₹400 crore) or 30% apply, plus surcharge and cess.

How do you get money in — and profits out?

Capital comes in from the parent as a share subscription; share allotment and the related RBI/FEMA filings must follow within the prescribed window. Open the account with a bank used to foreign-owned subsidiaries and pre-check KYC to avoid delays.

Profits go back out as dividends, royalty, interest or service fees, each backed by an inter-company agreement, after Indian tax and withholding. Draft a transfer pricing policy before the first cross-border charge — retrofitting it at year-end is where most disputes start.

What the official guides don't tell you

These are the friction points we hit repeatedly across 450+ setups — none of which appear on government portals.

• Name rejection is the most common early delay. Roughly 1 in 3 first-attempt name applications get bounced — almost always for generic or descriptive words, not trademark clashes. Submit two distinctive options, not one safe-sounding one.
• Bank KYC timing varies wildly by bank, not just by state. The same apostilled file can clear in 12 days at one bank and 30 at another. Pick the bank before you incorporate, not after.
• Apostille turnaround is the hidden gate. If your home country routes apostilles through a backlog (some take 10–15 working days), that happens before the Indian clock even starts. Begin apostilles the week you decide to proceed.
• The virtual office is a recurring cost nobody quotes upfront — typically USD 120–360 per year, separate from incorporation. Budget it as a fixed annual line.
• No resident director lined up early = stalled filings and banking. Identify or arrange one before step 1, not midway.

What does it cost to set up and run a subsidiary in India?

One-time incorporation and the ongoing annual run-rate are separate budgets. Figures below are in USD for foreign founders; ongoing costs are our published pricing for a subsidiary of up to 20 employees.

*Replace with your exact incorporation package price. GST audit (USD 750, if turnover exceeds ₹2 crore) and a transfer pricing study (from USD 750) are conditional add-ons. Full pricing: subsidiary cost breakdown.

Subsidiary setup checklist

Tick each item as you complete it. Bookmark this page to track progress.

Frequently asked questions