Introduction to Foreign Subsidiary Company

Updated on January 09, 2024 11:10:12 AM

Are you planning to expand your company’s reach across borders? You have a great option to set up a subsidiary company in India. A foreign Subsidiary company helps a business to expand its operations across foreign territories without any restrictions from the country of origin. Read through the page to understand every aspect of registration of a Foreign Subsidiary company in India.

Registering a Foreign Subsidiary company in India can be a complicated process and it may require assistance from a professional to register your subsidiary company in India after charging a professional fee and government fees as per the guidelines issued by Indian authorities.

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Foreign Subsidiary Company Incorporation
Foreign Subsidiary Company Incorporation Details
Cost of Foreign Subsidiary Registration $399
Time taken to Register a company Online 7-15 days
Documents Required for Subsidiary company Registration
  • Passport(Foreign Director)
  • Adhar Card
  • Driving License
  • PAN Card / DIN( Directors Identification Number)
  • Email address and Mobile Number
  • Utility bills ( such as electricity bill, broadband bills etc)
  • Latest Bank statements ( not older than 2 months)
  • Rent agreement
  • Obtain No objection certificate( NOC
Registration Process of Subsidiary company
  • Creation of DSC
  • Apply for Unique Name
  • Filing of SPICe Form, MoA, AoA
  • Issuance of incorporation Certificate
  • File Regulatory compliances
Mode of Application for Company Registration Online Application

What is a Foreign Subsidiary Company Registration?

Incorporation of a foreign subsidiary company means registering a subsidiary company in India which is already registered outside India. A subsidiary company can be registered as a public company or a private company in India.

A subsidiary company has to abide by the rules and regulations of the country in which it is incorporated and not operate according to the rules of its parent company. The subsidiary company is also known as a child company.

A foreign subsidiary company is any company that can be fully owned or partially owned which means that the parent company can hold 50% or more shares in the subsidiary which is registered in another country.

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Minimum Requirements for Subsidiary Company Registration in India

The minimum requirements for Subsidiary company registration in India are:

  • Choose a right Business Structure
  • Two Directors(one must be Indian)
  • Register a Company in India(Private Limited or Public Limited)
  • Obtain Necessary Approvals from Govt
  • Open a Bank Account
  • Meet Taxation Requirements
  • Register of other Regulatory Compliances
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How to Register a Foreign Subsidiary Company in India?

Here are the steps to register a foreign subsidiary company in India:

Step 1: Obtain DSC and DIN

The second step in registering a subsidiary company is to obtain Director Identification Number(DIN) and Digital Signature Certificate(DSC) for the proposed directors. A DIN is a unique number allocated to every director in every company in India and for this purpose Form DIR-3 has to be filed. A DSC is an electronic signature of directors which is used to file online documents with MCA.

Step 2: Reserve a Company Name

The first step in registration of a subsidiary company is to choose a unique name that is not similar to any other existing company in India. The chosen name should comply with the guidelines issued by the MCA. Check your Name availability tool to choose a unique company name.

Step 3: File incorporation Documents

The third step is to file Incorporation documents for Foreign Subsidiary companies with the Ministry of Corporate Affairs. Incorporation documents include Article of Association(AoA) and Memorandum of Association(MoA), and other forms such as appointment of director, shareholders details, Application for PAN, TAN etc.

Step 4: Obtain Certificate of Incorporation

After all the documents and forms are filed with the authority, wait for a few days for the documents to be reviewed by the Ministry of Corporate Affairs. Once the documents are reviewed and approved, the applicant will receive a certificate of incorporation, which will be a valid proof that the subsidiary company is successfully registered in India.

Step 5: Register for Tax and Regulatory Compliance

After following all the aforementioned steps, it is necessary to open a bank account with the name of the company and register for mandatory taxation and other regulatory compliances in India. The regulatory compliances will include Income Tax Act, FDI compliances, FEMA guidelines by RBI and SEBI.

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Fees for Subsidiary Company Registration

The total Registration fees for Foreign Subsidiary company in India is $399 including Govt Fees as well as Professional fees of Professional Utilities.

Foreign Subsidiary Company Registration Registration Fees
Documents Processing Fee $20
Government Fee (Stamp Duty) $280
Professional fee $99
Total Cost $399

Note - The Subsidiary registration fees will be charged for creation of DSC(for 2 directors), PAN and TAN, name approval, Drafting of required forms, Incorporation Certificate, and professional attorney fees. The Registration cost may vary if the number of members or the value of Authorised Capital is changed.

Documents Required for Incorporating a Foreign Subsidiary Company in India

The essential documents required for registering a Foreign Subsidiary company in India are:

  • Passport(for foreign Nationals)
  • Aadhar Card or PAN Card( for Indian Residents).
  • Passport size photograph
  • DSC(Digital Signature Certificate)
  • DIN(Director’s Identification Number)
  • MoA(Memorandum of Association)
  • AoA(Articles of Association)
  • Proof of Registered Office

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What are the Types of Subsidiary Companies in India?

Here are the types of subsidiaries that a foreign company can establish in India:

Wholly-owned Subsidiary

A wholly-owned subsidiary is a type of subsidiary company that is incorporated by a foreign company in India. It is a separate legal entity from its parent company. It operates and manages independently, it has its own board of directors, company constitution, and management team.

Joint Venture

In a joint venture, a foreign company collaborates with an Indian partner to create a new entity, sharing ownership, control, and profits. Joint ventures are commonly established for strategic alliances and to leverage local expertise.

Liaison Office

Liaison office is a type of subsidiary company that is set up to facilitate the relationship between the parent company which is registered abroad and the liaison company. Liaison offices are restricted to engage in any business activity in India, they are only eligible to work as a representative of the parent company in India. They are not entitled to earn profits, or enter into contracts.

Branch Office

A branch office works similar to a parent company. A branch office can be established at different places in India to perform the same business operations as the parent company. Such companies can carry out all the functions such as trading, consulting and provision of professional services. They can perform research work related to the business activity of the parent company.

Project Office

For opening the project office, an approval from the RBI is required. The project office can take activities related to projects in India and not otherwise. The main reason for opening a project office is that the company may have received a project from an Indian company.

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In conclusion, the registration of a foreign subsidiary company in India is a significant and complex process that requires careful planning, compliance with legal regulations, and diligent documentation. Establishing a subsidiary offers foreign companies an opportunity to expand their presence in the Indian market, access new business opportunities, and leverage local resources and expertise.

To successfully register a foreign subsidiary in India, companies must conduct thorough market research, choose the appropriate type of subsidiary, and obtain the necessary approvals from regulatory authorities.

Consult with Professional utilities, to Register a Foreign Subsidiary company in India. We have years of experience in Company Incorporation and our team of Professionals will assist you in registering your company successfully.

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Frequently Asked Questions (FAQs)

What is a Subsidiary Company Registration?

A Foreign Subsidiary Company registration means registering a company which is a subsidiary of another company registered outside India. The parent company can own 50% or more shares in the subsidiary company.

What is the Registration process of Foreign Subsidiary companies in India?

The registration process of a subsidiary company includes Applying for DSC, DIN, Name Approval, filling company incorporation documents, following regulatory compliances of RBI and FDI, filing compliances of FEMA and.

How much is the cost of Foreign subsidiary company registration in India?

The Registration fee for Foreign Subsidiary companies in India is $399 which includes Government fee and professional fee

Can subsidiary companies hold shares in Parent Company?

The subsidiary company is not authorized to hold shares in the parent company.

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