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What is an Indian Subsidiary of a Foreign Company?
It is a company incorporated in India where a foreign parent company owns more than 50% of its share capital, giving it controlling interest. It operates as a separate legal entity under the Companies Act, 2013.
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Can a foreign company own 100% of an Indian subsidiary?
Yes, in most sectors under the automatic route, 100% foreign ownership is allowed without prior government approval. Restricted sectors may require approval from the Reserve Bank of India or DPIIT.
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What are the key requirements for forming an Indian subsidiary?
You need at least two directors (one must be a resident of India), two shareholders, and a registered office address in India. Additionally, all foreign documents must be notarized and apostilled.
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How long does it take to register an Indian subsidiary?
It generally takes 10–15 working days after document submission and digital verification. The time may vary depending on government approvals and document accuracy.
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Is FDI approval required for setting up a subsidiary?
For most industries, FDI comes under the automatic route, meaning no prior approval is needed. For restricted sectors, approval from relevant authorities is mandatory.
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What are the benefits of incorporating an Indian subsidiary?
It provides legal status, tax benefits, market entry, and operational flexibility in India. It also enhances brand recognition and ensures compliance with Indian regulations.
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Can a U.S. company set up a subsidiary in India?
Yes, a U.S. company can easily establish an Indian subsidiary by complying with RBI and MCA guidelines. EbizFiling helps in managing documentation and legal procedures smoothly.
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What is the minimum capital required for registration?
There is no minimum paid-up capital requirement under the Companies Act, 2013. You can start with any amount suitable for your business plan.
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Is it necessary to have an Indian director?
Yes, at least one director must be a resident of India who has stayed for 182 days or more in the previous year. This is a mandatory requirement for incorporation.
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What are the tax implications for an Indian subsidiary?
An Indian subsidiary is taxed as a domestic company in India, subject to applicable corporate tax rates. It must also comply with transfer pricing and income tax reporting norms.
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Can profits be repatriated to the parent company?
Yes, profits can be repatriated after paying applicable taxes in India and meeting FEMA guidelines. This includes dividends, royalties, or technical fees.
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What licenses are required after incorporation?
Depending on the business type, you may need GST registration, Import Export Code, and industry-specific licenses. EbizFiling can help secure all required registrations.
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Can an Indian subsidiary hold property in India?
Yes, an Indian subsidiary can purchase, own, or lease property in India under its registered name. This includes office premises and operational assets.
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Can a foreign director sign digital documents?
Yes, with a valid Digital Signature Certificate (DSC), foreign directors can digitally sign incorporation forms. EbizFiling assists in obtaining DSC for international directors.
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What are the post-registration compliances for subsidiaries?
Subsidiaries must file annual returns, maintain financial records, and report foreign shareholding to RBI. Compliance is governed by FEMA and the Companies Act.
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Can the subsidiary be converted into another entity type?
Yes, it can be converted into a joint venture or wholly owned subsidiary, depending on the shareholding structure. Necessary filings must be made with MCA and RBI.
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What is the role of the parent company in management?
The parent company holds ownership control but the Indian board manages day-to-day operations. Major decisions are governed by the board resolutions and shareholder agreements.
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Does the subsidiary require a physical office in India?
Yes, a registered office address is mandatory for official correspondence and government notices. Virtual addresses can be used temporarily during setup.
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Is the subsidiary treated as an Indian company?
Yes, it is treated as an Indian private limited company for taxation, compliance, and legal purposes. However, ownership rests with the foreign parent company.
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How can EbizFiling help with subsidiary registration?
EbizFiling provides complete support from documentation, MCA filings, and FDI compliance to post-incorporation services. We ensure a fast, transparent, and legally compliant registration process.