India Company Registration

Setting up a subsidiary in India can be a transformative step for expanding your business operations and accessing one of the world's largest and most dynamic markets. At IndiaFilings, we specialise in providing comprehensive and tailored services for the incorporation of a foreign subsidiary in India. Our team of experts is here to guide you through the complexities of establishing a foreign subsidiary company in India, from understanding the legal requirements and navigating regulatory approvals to assisting with compliance and documentation. Partner with us for the incorporation of a foreign subsidiary in India and unlock India's vast business potential to drive your company's growth and success.

Subsidiary Company

A subsidiary company is often referred to as a sister company, while the company that exercises control over it is known as the parent company or holding company. The parent company holds the authority to control the subsidiary company, either in part or entirely.

The registration process for a foreign subsidiary company in india is governed by the Companies Act of 2013. According to the Companies Act of 2013, a subsidiary company can be defined as a company in which a foreign corporate body or parent entity holds a minimum of 50% of the total share capital. In essence, the parent company exerts a significant influence and control over the subsidiary company.

Types of Subsidiaries in India

In India, there are two primary categories of subsidiaries:

Wholly-Owned Subsidiary
In a wholly-owned subsidiary, the parent company possesses 100% ownership of the subsidiary's shares. However, it's important to note that wholly-owned subsidiaries can only be established in sectors that permit 100% Foreign Direct Investment (FDI).

Subsidiary Company
In this category of subsidiary, the parent company owns 50% of the subsidiary's shares.
Before proceeding with establishing a foreign subsidiary company in india, obtaining approval from the Reserve Bank of India is a crucial prerequisite. This regulatory step ensures compliance with the country's foreign investment regulations and safeguards the interests of all stakeholders involved.

Advantages of Indian Subsidiary Company

There are several compelling advantages associated with the incorporation of foreign subsidiary in india. Entry into the Indian Market India's competitive environment offers a plethora of investment opportunities that attract foreign entrepreneurs to establish their subsidiary companies in the country.

Foreign Direct Investment (FDI) in India FDI involves investments by foreign companies in Indian private companies through share subscriptions or acquisitions. In 2020, the Indian government introduced a provision requiring prior approval for investments from countries sharing a border with India, making Indian subsidiary registration an attractive option for foreign investors.

Perpetual Succession The concept of perpetual succession ensures that a company's existence remains intact regardless of events like changes in management, transfers of membership, or insolvency. The company continues to operate seamlessly, providing stability and continuity.

Limited Liability Limited liability is a significant advantage that encourages individuals to opt for company formation over other business structures. This principle extends to Indian subsidiary companies, protecting the personal assets of shareholders and directors. The company bears responsibility for its debts to third parties, shielding the personal assets of its stakeholders.

Scope of Diversification Establishing an Indian subsidiary company provides a strategic avenue for foreign businesses to expand their operations. This contributes to the growth and development of the Indian economy and introduces a wide range of goods and services, fostering healthy competition.

Separate Legal Identity According to the Companies Act, a company is recognized as a distinct legal entity separate from its shareholders and directors. This legal status empowers the company to engage in agreements with other competent entities as an artificial legal person. It also grants the company the ability to initiate legal actions and respond to allegations before the judicial system in its own name, without direct involvement from its members or directors.

Property Ownership and Rental A subsidiary company, being a legal entity, possesses the authority and right to purchase or rent properties in India for its business activities. To prevent potential conflicts among company members, it is advisable to acquire such properties in the name of the company itself, aligning with the principle of perpetual succession.

Regulatory Authorities for Indian Subsidiary Company Registration

The Ministry of Corporate Affairs MCA is responsible for setting and enforcing the rules and regulations governing company registration and compliance. Registrar of Companies (ROC) offices handle the procedures related to company incorporation, ensuring companies follows legal requirements. Reserve Bank of India (RBI) regulates foreign currency exchange aspects for foreign subsidiary company in india, ensuring adherence to financial regulations.

How IndiaFilings Can Assist with Indian Subsidiary Company Registration

Still unsure how to register a subsidiary company in India? IndiaFilings simplifies establishing an Indian subsidiary company by offering comprehensive support at every crucial step. From selecting a unique name and obtaining essential Director Identification Numbers (DIN) and Digital Signature Certificates (DSC) to assisting with PAN and TAN applications and setting up a dedicated company bank account, we streamline the entire registration process.

Our expert team ensures compliance with regulatory requirements, including the Foreign Exchange Management Act (FEMA), Companies Act, 2013, Reserve Bank of India (RBI) compliances, and the Income Tax Act, 1961.

We facilitate filing annual returns, guide you through SEBI (Listing Obligations and Disclosure Regulations) compliance, and provide tax services to navigate India's taxation policies. With IndiaFilings as your partner, you can initiate and grow your Indian subsidiary business confidently and efficiently.