Indian Subsidiary

Who Needs This Service

This service is for foreign companies and multinational groups that want a full operating business in India. Technology and software firms setting up development or service centres, manufacturers entering the Indian market, trading and distribution businesses, consulting and professional services firms, and startups from abroad that want an Indian entity for contracts and employees all fit this description.

It is also relevant to Indian groups that want to create a separate subsidiary for a new business line, to ring-fence risk or to bring in a minority investor, and to joint ventures between foreign and Indian partners.

A subsidiary is the right choice when you plan to hire locally, sign contracts in India, own property or intellectual property, and want limited liability. If your activity is limited to representation or market research, a liaison office may be enough; if you need to carry on trading activity but not as a separate company, a branch office is another option. These are covered under the Foreign Company Registration service.

Because FDI rules, sector caps and RBI reporting are specialised, even experienced multinationals benefit from structured support when entering India for the first time.

Key Benefits

• Separate Indian legal entity with limited liability for the foreign parent
• Full operational freedom: hire staff, own assets and sign contracts locally
• 100% foreign ownership is allowed in most sectors under the automatic route
• Smooth FEMA compliance through correct FC-GPR reporting
• Easier access to Indian banking, licences, tenders and local fundraising

Next Steps & Related Services

After incorporation, bring in capital from the foreign parent, allot shares and file FC-GPR on the RBI's FIRMS portal, open the bank account and register for GST and other licences as needed. Then set up the compliance calendar for ROC, tax and FEMA filings.

Related services: Post Compliance, GST Registration, IEC Code, Annual Compliance and Foreign Company Registration for branch or liaison options.

Common Mistakes

• Missing the RBI reporting on Form FC-GPR after allotting shares to the foreign parent; sources differ on whether the clock starts from allotment or receipt of funds, so file early.
• Not apostilling or notarising foreign documents, which causes rejection.
• Ignoring sector caps and approval requirements under the FDI policy.
• Appointing no Indian-resident director; at least one is required.
• Overlooking transfer-pricing and other tax implications of dealings with the foreign parent.

Timeline, Costs & Practical Tips

Incorporation takes about the same time as a private company, but foreign documents must be notarised and apostilled first, which can add days. After shares are allotted, Form FC-GPR must be filed on the RBI's FIRMS portal; sources say within 30 days. Costs include government fees, stamp duty, apostille and professional fees.

Practical tip: confirm that your sector allows 100% FDI under the automatic route before starting, and plan the bank account and capital inflow carefully so FC-GPR can be filed on time.