India is rapidly emerging as a global hub for business and foreign investment. With a booming economy, favourable government policies, and a skilled workforce, it’s no surprise that multinational companies are keen to establish their presence here. One of the most effective ways for a foreign enterprise to enter the Indian market is through an Indian subsidiary.
Whether you’re an established global corporation or an expanding startup, this guide by Lal Ghai & Associates – a leading Company Secretary in Punjab – will walk you through the complete process of setting up a foreign subsidiary in India, including compliance, legal, and tax frameworks.
What is an Indian Subsidiary?
An Indian subsidiary company is one that is either partially or wholly owned by a foreign corporation. It operates under the Companies Act, 2013 and is treated as a separate legal entity.
Types of subsidiaries in India:
- Wholly Owned Subsidiary (WOS) – 100% foreign ownership
- Partially Owned Subsidiary – 51% to 99% foreign ownership
Why Set Up a Subsidiary in India?
- Access to 1.4 billion consumers
- 100% FDI allowed in most sectors
- Talent-rich ecosystem, especially in IT, pharma, and engineering
- Tax incentives under the Make in India initiative
Did You Know?
India attracted over $84.8 billion in FDI in 2022-23, making it a top choice for international investment.
Step-by-Step Process to Register an Indian Subsidiary
1. Choose a Business Structure
- Private Limited Company (Most preferred)
- Public Limited Company
- LLP (Limited cases)
2. Digital Signature Certificate (DSC)
Directors must obtain a DSC to file documents online with MCA.
3. Name Approval
Use the RUN (Reserve Unique Name) facility from the MCA portal.
4. File Incorporation Documents
- SPICe+ Form Part A & B
- MOA and AOA
- Director ID & Address Proof
5. Get PAN, TAN & GST Registration
Mandatory for tax filings and transactions.
6. Open an Indian Bank Account
Submit incorporation documents and perform KYC with a local bank.
7. Comply with FEMA & RBI Guidelines
File FC-GPR and follow RBI protocols for foreign investment.
Legal Compliance for Indian Subsidiaries
- Companies Act, 2013 – Annual filings, board meetings, audits
- FEMA Regulations – For fund repatriation and FDI limits
- Income Tax Act – Corporate tax, TDS, and transfer pricing
2025 Tax Rates:
- 25.17% – Concessional rate under Section 115BAA
- 30% – Standard corporate tax for large companies
Bonus Tip: India has DTAA agreements with 90+ countries to avoid double taxation.
Benefits of Having an Indian Subsidiary
- 100% foreign control in most sectors
- Improved credibility and local presence
- Protection through limited liability
- Access to subsidies, tax benefits & local incentives
- Customization for Indian market entry
Challenges to Consider
- Complex legal & compliance framework
- Delays in government approvals
- Navigating local business culture and regulations
Solution? Hire a professional Company Secretary in Punjab, like Lal Ghai & Associates, to guide you through every step of the process.
Why Choose Lal Ghai & Associates?
- Expert in company registration and FDI compliance
- Trusted Trademark Registration Consultants in Punjab
- Personalized service with 100% compliance support
- Offices in Ludhiana, Mohali, and Gurugram
Conclusion
Setting up an Indian subsidiary for a foreign company is a strategic move to tap into one of the world’s largest and fastest-growing markets. With expert help from Lal Ghai & Associates, the process becomes smooth, compliant, and future-proof.
Contact Now to Book a Free Consultation
Email: sumit@lgassociates.org
Phone: +91-94636-40466
Offices: Ludhiana | Mohali | Gurugram