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Indian Subsidiary Company

An Indian Subsidiary Company is a company incorporated in India but owned or controlled by a foreign parent company under...

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Key takeaways

An Indian Subsidiary Company is incorporated in India but owned or controlled by a foreign parent or holding company, and remains a separate legal entity.
The definition flows from Section 2(87) of the Companies Act, 2013: the holding company controls the Board or holds more than half of the share capital.
When the holding company owns 100% of the share capital, the entity is a wholly owned subsidiary.
Incorporation is filed through the SPICe+ form with the Ministry of Corporate Affairs (MCA).
You need at least two directors (one an Indian resident), two shareholders and a registered office in India.
100% Foreign Direct Investment (FDI) is allowed in most sectors, many through the automatic route.
Registration usually takes 15 to 25 working days, subject to document verification and approvals.

Overview

What is an Indian Subsidiary Company?

An Indian Subsidiary Company is a company formed or registered in India but owned or controlled by a foreign company, known as the parent or holding company. It lets the foreign entity operate in the Indian market while keeping a separate legal identity.

The holding company owns a majority of the shares in the subsidiary, allowing it to exercise control as the principal shareholder. When the holding company holds 100% of the subsidiary’s share capital, the subsidiary is termed a wholly owned subsidiary. A subsidiary can be either established afresh or acquired by the holding company.

Under Section 2(87) of the Companies Act, 2013, a company is a subsidiary of another company (the holding company) if the holding company controls the composition of its Board of Directors, or exercises or controls more than half of the total share capital. This control can be exercised directly or together with one or more subsidiaries.

Typical benefits of the structure

Limited liability protection for shareholders
100% FDI allowed in most sectors
Legal presence in the Indian market for expansion
Lower tax rates compared to a foreign branch office
Access to Indian customers and supply chains
Credibility in front of local partners and regulators

Types and framework

Types of Indian subsidiary structures

A foreign business can choose from several structures based on ownership, operational control and scope. The right choice depends on your business goals and the FDI position in your sector.

Structure	What it means
Wholly Owned Subsidiary	Parent holds 100% of shares for full control and ownership; allowed only in sectors where 100% FDI is permitted.
Partially Owned Subsidiary	Parent holds a majority stake (usually over 50%) but not 100%, with shared ownership and decisions.
Joint Venture Subsidiary	Two or more companies, often a foreign parent with an Indian entity, pool resources and share risk as a separate legal entity.
Liaison Office	A representative office for communication and market research only; it cannot carry out commercial activity or earn revenue.
Branch Office	An extension of the parent that can conduct commercial activities and earn revenue, subject to similar legal obligations.

Regulatory basis	Role
Companies Act, 2013	Governs the holding and subsidiary relationship, restricts layers and cross-holdings, and requires consolidated financial statements.
SEBI (LODR) Regulations, 2015	Strengthens governance of material subsidiaries and related party transactions for transparency and accountability.
Ministry of Corporate Affairs (MCA)	Administers the rules for registration procedures and ensures compliance with legal requirements.
FEMA and RBI	Govern foreign investment, capital inflows and foreign transactions of the subsidiary.

Why it matters

Benefits of an Indian subsidiary

Limited liability

Shareholders are protected, with the subsidiary standing as a separate legal entity from the parent.

Full FDI access

100% Foreign Direct Investment is allowed in most sectors, many through the automatic route.

Indian market presence

Operate locally with a recognised legal identity for genuine business expansion.

Better tax position

Indian corporate tax rates are typically lower than those on a foreign branch office.

Local credibility

A registered Indian entity builds trust with customers, suppliers and local partners.

Supply chain access

Direct entry to Indian customers, vendors and supply chains for smoother operations.

Compliance

Eligibility and ongoing compliance

Incorporation must comply with the Companies Act, 2013 and FEMA regulations. The Act restricts the number of layers of subsidiaries, cross-holdings and treasury shares, and gives the holding company authority over the appointment and removal of the subsidiary’s directors. After incorporation, the subsidiary carries continuing obligations with the MCA, RBI and FEMA.

What you must put in place

At least two directors, one of whom is an Indian resident.
At least two shareholders; the foreign parent company can be one.
A registered office address in India.
Corporate tax at 25% or 30%, depending on turnover.
GST registration and filing, where applicable.
Annual financial statements, audit, and FEMA and RBI compliance for foreign transactions.

How it works

The registration process, step by step

Registration is filed online with the MCA using the SPICe+ form, which combines name reservation, incorporation and several allied registrations in one application.

Core incorporation steps

Obtain DSC
Get a Digital Signature Certificate (DSC) for the proposed directors.
Apply for DIN
Apply for the Director Identification Number (DIN) for the directors.
Reserve the name
Reserve the company name through Part A of the SPICe+ form with the MCA.
Draft MOA and AOA
Prepare the Memorandum and Articles of Association for incorporation.
File with MCA
File the incorporation documents through Part B of SPICe+ with the Ministry of Corporate Affairs.
Certificate of Incorporation
Receive the Certificate of Incorporation along with PAN and TAN.
Bank and FEMA
Open a corporate bank account and complete RBI and FEMA compliance.

Covered within SPICe+ Part B

Company incorporation
Incorporation of the subsidiary along with DIN allotment for directors.
PAN and TAN
Application for the company PAN and TAN in the same filing.
EPFO and ESIC
Registration under EPFO and ESIC for the new entity.
GSTIN
GSTIN application where the subsidiary needs GST registration.
Bank account and tax
Bank account opening and Professional Tax registration (applicable in Maharashtra).

Paperwork

Documents required

Memorandum of Association (MOA) and Articles of Association (AOA)
Certificate of Incorporation of the parent company (foreign corporate entity)
Board resolution of the promoter company for setting up the subsidiary
Proof of business address: rent agreement or ownership documents, plus utility bills
Capital layout of the company
DSC and DIN for directors and designated shareholders
PAN and Aadhaar of Indian directors; passport and address proof of foreign directors
Photographs, declarations, and interest of first directors in other entities

Lifecycle

Timeline & filing

Registration usually takes 15 to 25 working days, depending on document verification and approvals.
The applicant downloads the form as PDF, authenticates it with the DSC, and uploads it with all forms and declarations.
After payment, the Registrar of Companies (RoC) reviews the submission and issues the Certificate of Incorporation.
Ongoing filings include annual financial statements, audit, GST and FEMA or RBI compliance.

Comparing structures? See our Private Limited Company, One Person Company and LLP Registration services.

Comparison

Indian subsidiary vs branch office

Choosing the right vehicle affects your liability, tax and the scope of activity you can carry out in India.

Feature	Indian Subsidiary	Branch Office
Legal identity	Separate entity from parent company	Same as parent company
Liability protection	Limited liability	Parent company is fully liable
Tax benefits	Indian corporate tax structure	Subject to higher tax rates
Business scope	Can engage in full business operations	Restricted to liaison, R&D and exports

Not sure which structure fits?

Tell us about your sector, ownership plan and FDI position, and we will map the right entity, documents and timeline for your India entry.

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FAQ

Frequently asked questions

What is an Indian Subsidiary Company Registration?

An Indian Subsidiary Company is a company incorporated in India where a foreign company owns more than 50% of the shares. It operates under Indian laws but remains controlled by the parent foreign entity.

Is 100% FDI allowed in an Indian subsidiary?

Yes, in most sectors 100% Foreign Direct Investment is allowed without prior approval. However, certain industries require government approval before investment.

How long does registration take?

The registration process usually takes 15 to 25 working days, depending on document verification and the approvals involved.

What are the minimum requirements?

You need at least two directors, one of whom must be an Indian resident, at least two shareholders (the foreign parent can be one), a registered office in India, and compliance with the Companies Act, 2013 and FEMA regulations.

Which form is used to register the subsidiary?

The SPICe+ form is used. Part A reserves the company name and Part B covers incorporation, DIN, PAN, TAN, EPFO, ESIC, GSTIN, bank account opening and Professional Tax registration where applicable.

What ongoing compliance applies after incorporation?

The subsidiary pays corporate tax at 25% or 30% depending on turnover, files GST where applicable, prepares annual financial statements and audit, and meets FEMA and RBI compliance for foreign transactions.

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