Indian Subsidiary registration2018-12-11T08:02:55+00:00

Indian Subsidiary Registration


Ideal for Foreign Entities interested in investing in India

Starting At Rs. 45,999 only (All Inclusive)

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What is the Indian Subsidiary registration?

The Indian subsidiary Company is the company whose interests are held and controlled or held by another company. The preference share capital and the paid-up equity share capital of the Subsidiary company can be used to determine the holding company, subsidiary company relationship between two companies. It can either be owned or owned in part by another company. It should be noted that the company that owns the subsidiary is known as a parent company or a holding company. Although, a holding company does slightly differ from a parent company.

Besides, a company owned 100% by another company is said to be a Wholly Owned Subsidiary of the company who had made 100% investment in it. So, Hurry up! Apply for Indian Subsidiary Registration through Legal Raasta and enjoy the perks.

What is included in Our Package

Features of Indian Subsidiary Companies

  • No requirement of prior approval for repatriation dividend.
  • Debt, Equity, and Internal accruals are the available funding mechanisms.
  • Indian Transfer pricing regulation is applicable to the Indian subsidiary Company.
  • It is treated as an Indian company for all other applicable laws and the purpose of income tax.
  • It is taxed at a lower rate of 30% in comparison to a foreign company whereas a foreign company is taxable at 40%.
  • The dividend distribution tax (DDT) is subjected to 16.995%.

Advantages of Indian Subsidiary registration

  • Limited Liability:The liability of Directors and members of the private limited company is limited to their shares. This means the company suffers from any loss and faces financial distress because of primary business activity, the personal assets of shareholders/Members/Directors will not be at risk of being seized by banks, creditors, and government.
  • Continuity of Existence:Mostly, the life of the business doesn’t affect by the status of shareholders and even after the death of the shareholder the private limited company continues to exist.
  • Brand ValueThe brand value of a company will get increased because employees feel secure in joining the private limited company, vendor feels secure in offering credit, investor feels secure in investing, the customer feels trust and confidence in a brand in buying company product or services because of the sound corporate structure. Many startup companies start with zero revenue and rapidly reaches to a multibillion-dollar company in just a few years just because of the high brand value of the company.
  • Scope of expansion:The scope of expansion is higher because it is easy to raise capital from a venture capitalist, financial institutions, angel investor, and the advantages of limited liability, the Private limited offer more transparency in the company.
  • Foreign Direct Investment in IndiaForeign Direct Investment (FDI) is 100% allowed in several business activities/industries without any prior approval. But FDI is not allowed in Proprietorship or Partnership; LLP requires prior Government approval.

Procedure for Indian Subsidiary Registration ?

Minimum Requirements for Indian Subsidiary Registration ?

  • Minimum 2 Shareholders
  • Minimum Capital of Rs. 1lac
  • DIN for all Directors
  • Parent company must hold 50% of total equity capital.

Documents required for Indian Subsidiary Company

From All Directors and Shareholders

  1. Utility bills (any)
  2. A copy of a rent agreement with NOC from an owner.

For Proposed Registered Office (Residential or commercial)

  1. Passport of foreign directors
  2. Incorporation certificate issued by the foreign government
  3. For opening a subsidiary company in India, a resolution from LLC/INC
  4. A copy of Voter’s ID/Driving license/Passport & PAN Card of Indian director.
  5. Photograph of all directors and shareholder. (Passport-sized)

Annual Compliances of Indian Subsidiary Company

All Indian Subsidiary companies are needed to comply with Companies Act, the Income Tax Act, FEMA guidelines, transfer pricing guidelines. Time to time, they are liable to file an income tax return with the income tax department, annual return with the registrar of companies and other mandatory filings with the reserve bank of India or securities and exchange board of India etc. However, the requirement is based on the type of industry, turnover, and the number of employees.

Frequently Asked Questions

1. 1. How to set up an Indian Subsidiary Company?

The first and foremost need to start up these companies is the sole director. Some years ago, there will be a need for Company secretary also. As soon as you register as a sole director, you will enter both you’re a residential address and a service address. But only the service address will appear in the public records. The various documents that you have submitted regarding shareholders, you will have both an individual director and another company as a shareholder. There is a prohibition in having an entire company owned by another company. Once, you are done with the documentation, you will have a decision within 24 hours from Companies House.

2. Can Indian Company be a 100% subsidiary of the parent company?

Of course, the Indian Companies Act requires that there should be at least two shareholders and foreign companies hence must hold 99.99% of shares of an Indian subsidiary. Besides, minority balance holding is nominated and held under the Indian Companies Act in the name of an individual.

3. Are there any restrictions on the activities that Indian subsidiaries of foreign companies engage in?
The reserve bank of India has some guidelines that define activities for foreign Companies under the following broad categories:

  • A foreign company is freely allowed for the activities to engage in without obtaining any permission.
  • A foreign company is allowed for the activities to participate subject to conditions.
  • A foreign company is prohibited for the activities to engage in. Such activities are further elaborated under various circulars of RBI under FEMA.
4. Can a Company form a One person company (OPC) as its subsidiary?

Only a natural person who is an Indian and resident in India is eligible to incorporate OPC as per the rule 3 of the Companies rules, 2014. Hence, the question of any “body corporate” or other organization form being the single member doesn’t arise.

5. What are the minimum requirements of Indian Subsidiary registration?
  • Minimum 2 Shareholders
  • Minimum Capital of Rs. 1lac
  • DIN for all Directors
  • A parent company shall have 50% of total equity capital.

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