How to Set Up an Indian Subsidiary – Incorporation & Compliance Guide 

Expanding into India through a wholly owned subsidiary is a strategic move for many international businesses seeking to tap into the world’s fastest-growing major economy. However, setting up an Indian private limited company involves a series of legal, tax, and regulatory steps under the Companies Act and FEMA. 

At Jain Prachi & Company, we assist global enterprises in seamlessly establishing their Indian subsidiaries—handling everything from registration to post-incorporation compliance. 

Why Set Up a Subsidiary Company in India? 

India offers unique advantages to global businesses: 

• Access to a skilled and cost-effective workforce 

• A huge consumer base and digital-first economy 

• Liberalized FDI norms in most sectors 

• Ability to own 100% equity in most industries under the automatic route 

• A robust legal framework for IP protection, dispute resolution, and taxation 

A subsidiary also allows you to: 

• Open Indian bank accounts 

• Hire employees locally 

• Sign contracts and issue invoices 

• Repatriate profits legally under FEMA 

Key Legal Requirements for an Indian Subsidiary 

To register a wholly owned subsidiary in India, you must meet the following conditions: 

Note: No minimum capital is required, and the process is entirely online. 

Step-by-Step Process for Incorporating an Indian Subsidiary 

Step 1: Document Collection 

• Passport and address proof of directors 

• Board resolution of the foreign parent company 

• Proof of registered office in India 

Step 2: Digital Signature Certificate (DSC) 

Mandatory for directors to sign electronic documents. 

Step 3: Name Reservation (RUN or SPICe+) 

Reserve a unique name with “India Private Limited” suffix. 

Step 4: Filing SPICe+ Form 

A comprehensive form covering incorporation, PAN, TAN, and EPFO/ESIC registration. 

Step 5: Issue of Certificate of Incorporation 

Includes Company Identification Number (CIN), PAN, and TAN. 

Step 6: Post-Incorporation Compliances 

• Opening bank account 

• FDI reporting to RBI via Form FC-GPR 

• Auditor appointment 

• GST registration, if applicable 

Taxation of Subsidiary Companies in India 

• Corporate Tax: 22% (normal rate) or 15% (for new manufacturing units) 

• Dividend Tax: Taxable in the hands of shareholders 

• Withholding Tax: Applicable on foreign remittances 

• Transfer Pricing: Applies to inter-company transactions 

We ensure full compliance with the Income Tax Act and FEMA guidelines. 

RBI & FEMA Compliances for Foreign-Owned Subsidiaries 

• Filing of Advance Reporting Form (ARF) within 30 days of remittance 

• Submission of Form FC-GPR within 60 days of share allotment 

• Valuation certificate required from a Chartered Accountant 

• Reporting of annual foreign liabilities and assets (FLA Return) 

Failure to comply may result in penalties under FEMA. 

Why Choose Jain Prachi & Company? 

• Experienced in foreign subsidiary formation across multiple sectors 

• End-to-end documentation, filing, and advisory 

• Assistance with RBI filings, tax registration, and post-incorporation setup 

• Transparent pricing and timely delivery 

We act as your compliance partner in India so you can focus on growth. 

Start Your Indian Subsidiary With Confidence 

We’ve helped companies from the USA, UK, Singapore, and Europe set up fully compliant Indian subsidiaries in record time. Let’s make your India entry smooth, strategic, and successful. 

📧 Email: contactus@jainprachi.com 
🌐 Website: https://jainprachi.com 

FAQs – Indian Subsidiary Formation 

Q: Can 100% foreign ownership be held in an Indian subsidiary? 
Yes, in most sectors under the automatic route without RBI approval. 

Q: Do I need to be physically present in India to set up the company? 
No, the process is fully online and can be completed remotely with notarized documents. 

Q: How long does it take to incorporate a subsidiary in India? 
Typically 10–15 working days, including post-approval tasks like PAN and TAN.