Indian Subsidiary Registration
Expand your global footprint with ease! Register your Indian subsidiary and unlock new opportunities in one of the world's fastest-growing economies.
Introduction
Establishing an Indian subsidiary is a common strategy for foreign companies seeking to enter the Indian market or expand their operations. A subsidiary is a separate legal entity owned or controlled by a parent company located outside of India. Registering an Indian subsidiary involves complying with Indian laws and regulations governing foreign investment and company incorporation.
Eligibility and Requirements
To register an Indian subsidiary, foreign companies must adhere to certain eligibility criteria and requirements, including:
01
Foreign Direct Investment (FDI) Policy: Compliance with the FDI policy issued by the Government of India, which specifies sectors open to foreign investment and the applicable caps.
02
Type of Company: The subsidiary can be registered as a private limited company, public limited company, or limited liability partnership (LLP), depending on the business structure preferred by the parent company.
03
Minimum Capital: The subsidiary must meet the minimum capital requirements specified by Indian laws, which vary depending on the type of company and sector of operation.
04
Name Approval: Like domestic companies, the proposed name for the subsidiary must be approved by the Registrar of Companies (RoC) in India.
Steps for Registration:
Obtain Digital Signatures
The directors and authorized signatories of the parent company and the proposed subsidiary must obtain digital signatures for filing electronic documents
Reserve Unique Name (RUN)
File an application for reserving the proposed name of the subsidiary through the RUN service available on the Ministry of Corporate Affairs (MCA) portal.
Incorporation Documents
Prepare and file the incorporation documents, including the Memorandum of Association (MoA) and Articles of Association (AoA), with the RoC.
Foreign Investment Approval (if required):
Depending on the sector and the extent of foreign investment, approval from regulatory bodies such as the Reserve Bank of India (RBI) or the Foreign Investment Promotion Board (FIPB) may be required.
Obtain Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN)
Apply for PAN and TAN for the subsidiary to comply with tax obligations.
Registered Office
Establish a registered office for the subsidiary within India and provide documentary proof of address.
Bank Account
Open a bank account in the name of the subsidiary to facilitate business transactions
Advantages of an Indian Subsidiary
01
Limited Liability: The liability of the parent company is limited to its investment in the subsidiary, protecting the parent company's assets.
02
Operational Autonomy: The subsidiary operates independently, allowing the parent company to focus on its core business operations.
03
Access to Indian Market: Establishing a subsidiary provides access to the vast Indian market and allows the parent company to cater to the needs of Indian consumers.
04
Tax Benefits: Subsidiaries may avail tax benefits and incentives available to companies registered in India, subject to compliance with applicable tax laws.
Post-Incorporation Obligations
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Compliance: Ensure compliance with ongoing regulatory requirements, such as filing annual returns, conducting board meetings, and maintaining statutory records.
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Tax Filings: File annual tax returns and comply with tax regulations applicable to Indian companies.
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Foreign Exchange Regulations: Adhere to foreign exchange regulations and reporting requirements prescribed by the RBI for foreign-owned subsidiaries.
Establishing an Indian subsidiary involves careful consideration of various factors, including regulatory compliance, tax implications, market entry strategies, and legal risks. Companies should conduct thorough due diligence and seek professional advice to navigate the complexities of setting up and operating a subsidiary in India.