Registering a foreign subsidiary in India is a strategic move for international businesses aiming to explore or expand their operations in the Indian market. This guide will walk you through the registration process, detailing prerequisites, required documentation, and steps involved.
What is a Subsidiary Company?
A subsidiary company in India is a business entity that is partially or wholly owned by another company, referred to as the parent company. It operates as a separate legal entity under Indian laws.
Activities a Subsidiary Company Can Engage in:
- Manufacturing: Set up manufacturing units and manage production lines.
- Sales and Marketing: Promote, sell, and distribute products or services.
- Research and Development: Conduct research and develop new products tailored to local or global markets.
- IT Support and Services: Provide IT solutions and support services.
- Customer Support Centers: Establish and operate customer support centers.
- Import and Export Services: Handle import and export of goods under trade regulations.
- Professional Services: Offer consulting, legal, financial, or educational services.
Pre-requisites for Establishing a Subsidiary in India
- Business Structure Choice: Typically set up as a private limited company.
- Director Requirements: At least two directors, with at least one being an Indian resident.
- Business Name Compliance: Unique name not resembling existing companies, as per MCA guidelines.
- Capital Requirement: No minimum capital required, which allows flexibility in investment.
Documents Required
- Identity and Address Proofs: For foreign directors, which must be notarized and apostilled.
- Corporate Documents: Including notarized and apostilled MoA and AoA of the parent company.
- Incorporation Certificate: From the parent company’s country, also requiring apostilization.
- Board Resolution and Power of Attorney: Authorizing the subsidiary’s establishment and legal representation in India.
Registration Process
- Name Reservation: Via the MCA’s RUN service or during SPICe+ form submission.
- Digital Signatures and DIN: Obtain Digital Signature Certificates and Director Identification Numbers.
- Incorporation Filing: Submit SPICe+ form with required documents to the MCA portal.
- Incorporation Certificate: Issued by the MCA, confirming the subsidiary’s legal status.
Opening a Bank Account
Post-registration, open a bank account using the subsidiary’s corporate documents. Consider international banks with operations in India like HSBC, Standard Chartered, or Deutsche Bank for their experience handling foreign businesses.
Other Tax Registrations
- Goods and Services Tax (GST) Registration: Mandatory if operating within the taxable threshold.
- Corporate Income Tax Compliance: Adhere to the Indian Income Tax Act and fulfill statutory audit requirements.
Yes, a foreign national can be a director of an Indian subsidiary, provided there is at least one director who is an Indian resident.
Subsidiaries in India must adhere to regular compliance like bookkeeping, statutory audits, and tax filings. They must also maintain certain statutory registers and file annual returns with the RoC.
The registration process typically takes about 12-15 business days from document submission, followed by additional time for bank account openings and tax registrations.