Foreign Subsidiary Company

Enter the Thriving Foreign Market - Register Your Subsidiary with Ruchir Jain & Co.

Our online subsidiary registration service includes the following features.

Obtain 2 DSCs with 2 years validity.

Get 2 secure Director Identification Number (DIN).

Get unique name approval for your subsidiary company.

Acquire PAN and TAN for the company.

Receive the official Company Incorporation Certificate.

Get Free Consultation

Foreign Subsidiary Company Registration: Your Gateway to Business Expansion

Setting up a subsidiary in foreign is a strategic move for indian companies seeking to expand into the country’s rapidly growing market. As of 2023, India is home to 14,137 active foreign subsidiary companies. According to the Companies Act of 2013, a subsidiary is a company where the parent company holds more than 50% of the total capital. Parent and subsidiary companies operate with separate financial statements and audits, which allows them to make well-informed decisions. The parent company typically organizes its subsidiaries into a hierarchical structure for efficient management. Registering a subsidiary in India involves several important steps, and following each one carefully will ensure a smooth and successful registration process.

What is a Subsidiary Company?

According to Section 2(87) of the Companies Act, 2013, a subsidiary company is one where the parent or holding company either has control over the composition of the Board of Directors or owns more than 50% of the total share capital. While the subsidiary company is considered a separate legal entity, it operates under the authority of the parent or holding company.

Benefits of Registration of a Subsidiary Company in Foreign

Benefits of Registering a Subsidiary Company Abroad

Market Expansion: Registering a subsidiary in a foreign country allows businesses to tap into new markets and increase their global presence, boosting growth opportunities.
Limited Liability: A subsidiary company has its own legal identity, meaning the parent company’s liability is limited to the capital invested, protecting its assets from any risks incurred by the subsidiary.
Tax Advantages: Operating through a subsidiary can offer tax benefits, such as lower tax rates in certain jurisdictions and the ability to structure operations efficiently for tax optimization.
Local Market Knowledge: A subsidiary provides access to local expertise, helping the parent company better understand the market, consumer preferences, and regulatory environment in the foreign country.
Easier Access to Funding: A subsidiary company can independently raise capital, making it easier to attract local investors and secure financing for expansion.
Brand Recognition: Establishing a subsidiary can improve brand recognition and credibility in the foreign market, fostering trust among local consumers and partners.
Operational Flexibility: The parent company can maintain control over the subsidiary while still allowing it the operational freedom to adapt to local conditions and business practices.

Eligibility for Subsidiary Company Registration

To be eligible for registering a subsidiary in India, the following criteria must be fulfilled:

Foreign Parent Company: The parent company must be incorporated outside of India and hold a majority shareholding (at least 50%) in the Indian subsidiary.
Indian Directors: The subsidiary must have at least one director who is a resident of India, although the remaining directors can be foreign nationals.
Business Purpose: The subsidiary must be established for a legitimate business purpose in India and cannot engage in activities that are prohibited by Indian law.
FEMA Compliance: The foreign investments made in the subsidiary must comply with the Foreign Exchange Management Act (FEMA), which regulates foreign investments in India.

Documents Required for Subsidiary Company Registration

The following documents are required for registering a subsidiary company in India:

For the Foreign Parent Company:

Certificate of Incorporation: A copy of the parent company’s certificate of incorporation.
Board Resolution: A board resolution from the parent company authorizing the establishment of a subsidiary in India.
Proof of Address: A rent or lease agreement for the parent company's registered office, along with a recent utility bill, bank statement, or other documents verifying the company's address.
Director Details: Identity proof (passport) and address proof of the foreign directors.
Memorandum and Articles of Association: The parent company's memorandum and articles of association.

For Indian Directors:

Proof of Identity: A government-issued ID such as a passport or voter ID.
Proof of Address: A utility bill, bank statement, or lease agreement showing the residential address of the director.

For the Subsidiary Company:

Proposed Company Name: A suggested name for the subsidiary, which must be approved by the Ministry of Corporate Affairs (MCA).
Registered Office Address: Proof of the registered office address in India, such as a utility bill or lease agreement.

Checklist for Foreign Subsidiary Company Registration

Checklist for Foreign Subsidiary Company Registration in India:

Parent Company Documents:
- Certificate of Incorporation of the parent company.
- Board resolution authorizing the formation of a subsidiary in India.
- Proof of the parent company's address (e.g., lease/rent agreement, utility bill, bank statement).
- Details of foreign directors (Identity proof such as passport and address proof).
- Memorandum and Articles of Association of the parent company.
Indian Director Documents:
- Proof of identity (e.g., passport, voter ID, or other government-issued ID).
- Proof of address (e.g., utility bill, bank statement, or lease agreement).
Subsidiary Company Documents:
- Proposed company name (must be approved by the Ministry of Corporate Affairs).
- Proof of registered office address in India (e.g., utility bill or lease agreement).
Compliance and Legal Documents:
- Compliance with Foreign Exchange Management Act (FEMA) for foreign investments.
- Digital Signature Certificate (DSC) of the authorized signatory.
- Director Identification Number (DIN) for Indian directors.
Additional Requirements:
- No objection certificate (NOC) from the owner of the property (if the office address is rented).
- Consent from the directors to act as a director of the subsidiary company.

This checklist will ensure all necessary documents and legal requirements are in place for smooth registration of the subsidiary company in India.

Procedure for Subsidiary Company Registration in Foreign

Procedure for Registering a Foreign Subsidiary Company in India:

Obtain Digital Signature Certificate (DSC): The proposed directors of the subsidiary must obtain a Digital Signature Certificate (DSC), as it is required for signing documents electronically during the registration process.
Obtain Director Identification Number (DIN): Each director of the subsidiary must apply for and obtain a Director Identification Number (DIN) from the Ministry of Corporate Affairs (MCA).
Name Approval: Choose a unique name for the subsidiary company and apply for name approval through the Ministry of Corporate Affairs (MCA) portal. The name must comply with MCA guidelines and cannot be identical to an existing company name.
Draft the Memorandum and Articles of Association (MOA & AOA): The subsidiary’s Memorandum and Articles of Association must be drafted and signed by the foreign parent company and the Indian directors, specifying the company’s objectives, powers, and rules for internal management.
Register the Subsidiary Company with MCA: File the necessary incorporation documents (MOA, AOA, proof of office address, and director details) with the Ministry of Corporate Affairs (MCA) through the online portal. The documents must be filed with the Registrar of Companies (RoC) for approval.
Obtain Certificate of Incorporation: Upon successful approval of the registration documents, the RoC will issue a Certificate of Incorporation, signifying the legal existence of the subsidiary company.
Apply for PAN and TAN: Apply for the Permanent Account Number (PAN) and Tax Deduction Account Number (TAN) for the subsidiary company with the Income Tax Department.
Comply with GST Registration (if applicable): If the subsidiary will be engaged in taxable supply of goods and services, apply for Goods and Services Tax (GST) registration with the Goods and Services Tax Department.
Open a Bank Account: After obtaining the Certificate of Incorporation, open a bank account in the name of the subsidiary company to conduct business operations.
Comply with FEMA Regulations: Ensure compliance with the Foreign Exchange Management Act (FEMA) for foreign investments and reporting of investments by the parent company.

This step-by-step process will guide you through the legal procedures for registering a foreign subsidiary company in India, ensuring a smooth incorporation.

Compliance Requirements for Foreign Subsidiary Companies

Compliance Requirements for Foreign Subsidiary Companies in India:

Foreign Exchange Management Act (FEMA) Compliance:
- Foreign investments in the subsidiary must adhere to the provisions of FEMA, which regulates the inflow of foreign capital and ensures that the foreign investment complies with Indian currency and trade regulations.
- The subsidiary must file the necessary returns with the Reserve Bank of India (RBI) if the foreign parent company holds equity shares in the subsidiary.
Company Law Compliance (Companies Act, 2013):
- Annual Filing: The subsidiary company must file its annual financial statements (balance sheet, profit & loss account, and auditor’s report) with the Ministry of Corporate Affairs (MCA).
- Board Meetings: The subsidiary company is required to hold a minimum of four board meetings in a financial year. The minutes of the meetings must be documented and kept at the registered office.
- Annual Return: The subsidiary must file an annual return with the Registrar of Companies (RoC) along with necessary financial statements.
- Director Appointments: The subsidiary must ensure that it appoints directors as per the Companies Act, with at least one Indian resident director.
Tax Compliance:
- Income Tax Returns: The subsidiary must file income tax returns every year with the Income Tax Department, including the necessary forms such as Form ITR-6.
- Transfer Pricing: If the foreign parent company and the Indian subsidiary engage in cross-border transactions, transfer pricing documentation and compliance with the Income Tax Act must be maintained.
- Tax Deduction at Source (TDS): The subsidiary must deduct TDS on applicable payments, such as salaries, rent, and other business expenses, and remit the amount to the government.
Goods and Services Tax (GST) Compliance:
- If the subsidiary is engaged in the supply of goods or services, it must be registered under GST and file GST returns (monthly/quarterly).
- The subsidiary must comply with GST regulations on input tax credits, invoices, and the timely payment of taxes.
Statutory Audits:
- The subsidiary company must conduct an annual audit of its accounts by a qualified Chartered Accountant (CA) as required under the Companies Act, 2013.
- The audit report must be submitted along with the financial statements to the RoC.
Labour Law Compliance:
- The subsidiary must comply with Indian labor laws, such as the Payment of Gratuity Act, Provident Fund (PF) and Employees’ State Insurance (ESI), and other employee welfare regulations.
- It must ensure timely contributions to employee provident funds and social security benefits.
Compliance with Other Sector-Specific Regulations:
- The subsidiary may be subject to industry-specific regulations (e.g., banking, insurance, telecom) depending on the nature of its business.
Secretarial Compliance:
- The subsidiary must appoint a Company Secretary (CS) if required by law and ensure proper maintenance of company records, registers, and compliance with corporate governance norms.

By fulfilling these compliance requirements, a foreign subsidiary can operate smoothly within the legal framework and avoid penalties for non-compliance in India.

Why Choose Ruchir Jain & Co for Foreign Subsidiary Company Registration?

Ruchir Jain & Co is a leading choice for registering an Indian subsidiary company, offering expert advice, tailored support, and a seamless registration process. With a wide range of services, Ruchir Jain & Co makes the process of establishing a subsidiary business in India simple and efficient.

Expert Guidance: Our experienced team has in-depth knowledge of Indian laws, ensuring that clients stay informed and supported throughout the entire registration and filing process. Our drive for excellence and continuous learning ensures we provide the best solutions for your business.

Personalized Assistance: At Ruchir Jain & Co, we prioritize a personalized approach, customizing our services to meet the specific needs of each client. We work closely with clients to deliver effective, tailored solutions for every challenge.

Streamlined Registration Process: With Ruchir Jain & Co online platform, clients can complete their paperwork and registration tasks with ease and efficiency. Our services are among the best available for registering a subsidiary company online, making the entire experience quick and hassle-free.