Set up an Indian subsidiary for a foreign parent

Category: Business Registration. From ₹24,999. Typical timeline: 20–30 days.

Overview

Indian Subsidiary registration enables a foreign company to establish a wholly or majority-owned entity in India, typically as a private limited company, to conduct business directly under Indian company law while complying with FEMA and RBI regulations on foreign investment. It is the preferred route for global companies entering the Indian market with full operational control.

Who needs it

• Foreign companies entering India through a wholly-owned subsidiary structure
• Multinational groups setting up an Indian sales, manufacturing or R&D arm
• Joint venture partners forming a majority foreign-owned Indian entity
• Startups with a foreign parent establishing an Indian operating entity

Eligibility

• Foreign company/parent must hold at least 50% (wholly-owned subsidiaries hold 100%) of the Indian entity's shares
• At least one director on the Indian subsidiary's board must be a resident of India
• Sector must permit foreign investment under the automatic route, or approval route clearance must be obtained
• Compliance with FEMA (Non-Debt Instruments) Rules, 2019 for foreign investment reporting

Documents required

• Certificate of incorporation and charter documents of the foreign parent (apostilled/notarised)
• Board resolution of the parent authorising Indian subsidiary formation
• PAN and identity documents of resident and foreign directors
• Proof of registered office in India
• FDI reporting details for RBI (FC-GPR after share allotment)

Process

1. Structuring and approval check — Confirm whether the business sector falls under the automatic or government approval route for FDI.
2. Document apostille/notarisation — Get the parent company's charter documents apostilled or notarised in the country of origin.
3. SPICe+ incorporation filing — File SPICe+ with resident and foreign director details and registered office proof.
4. FDI reporting to RBI — File Form FC-GPR through the RBI's FIRMS portal within 30 days of share allotment.

Government fees

• SPICe+ incorporation filing: As per MCA fee schedule — depends on authorised capital
• Apostille/notarisation of foreign documents: Varies by country of origin
• FC-GPR filing on FIRMS portal: Nil — filing fee not charged, but delayed filing attracts LSF

Professional fee

Kanoons charges ₹24,999 for Indian subsidiary incorporation including FEMA/FDI compliance support and initial RBI reporting.

Timeline

Incorporation and initial FDI reporting typically take 20–30 working days, depending on how quickly the parent company's foreign documents are apostilled and shared.

Deliverables

• Certificate of Incorporation with CIN
• MoA and AoA
• PAN and TAN of the subsidiary
• FC-GPR filing acknowledgment for share allotment reporting

Frequently asked questions

Can a foreign national be the sole director of an Indian subsidiary?

No, at least one director must be a resident of India who has stayed in the country for 182 days or more in the preceding financial year.

Is RBI approval needed before incorporation?

For sectors under the automatic route, no prior RBI approval is needed; investment is reported after allotment via Form FC-GPR. Approval-route sectors need government clearance first.

What is the FLA return?

The Foreign Liabilities and Assets (FLA) return is an annual RBI filing mandatory for any Indian entity with foreign direct investment, due by 15 July each year.

Common mistakes

• Not checking sector-specific FDI caps before finalising shareholding structure
• Missing the 30-day FC-GPR filing window after share allotment, resulting in late submission fees
• Failing to appoint a resident director before filing incorporation
• Overlooking the annual FLA return obligation post-incorporation

Penalties for non-compliance

• Late filing of Form FC-GPR attracts Late Submission Fee (LSF) under FEMA compounding guidelines
• Non-compliance with FEMA reporting can lead to compounding proceedings by the RBI
• Missing the FLA return deadline can result in the entity being flagged non-compliant with RBI

Legal references

• Foreign Exchange Management Act, 1999 and FEMA (Non-Debt Instruments) Rules, 2019 — FDI framework
• Companies Act, 2013 — incorporation and governance of the Indian subsidiary
• RBI Master Direction on Reporting under FEMA — FC-GPR and FLA filing requirements