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India is one of the fastest growing economies in the world. With such a huge market, companies around the world are not missing the opportunity of expanding their business. Among many other ways of investing in India by foreign nationals, non-resident Indians and foreign companies, one of it is incorporation of a foreign subsidiary in India. The procedure for incorporating a foreign subsidiary in India is similar to but not same as incorporation of an Indian company within the territory. Some other formalities are required apart from your regular process of incorporation of a company. Let us understand how a foreign company subsidiary can be incorporated in India.


When a company is controlled by another company, which holds more than 50% of voting stock, it is known as a subsidiary company and the company holding the voting stock is known as the parent company. 

Companies Act, 2013 defines subsidiary company as a company in which the holding company:

  1. Controls the composition of the Board of Directors;
  2. Exercises or controls more than one-half of the total share capital

It defines foreign company as:

Any company or body corporate incorporated outside India which-

  1. Has a place of business in India whether by itself or through an agent, physically or through electronic mode; and
  2. Conducts any business activity in India in any other manner.

The subsidiary must follow the rules of the country where it is incorporated. So if a foreign subsidiary is incorporated in India it has to follow the acts and rules that govern the working of companies in India, which is Companies Act, 2013 and the Rules made there under.


Even though foreign companies can open any kind of company be it Public Company, Private Company or Limited Liability Partnership, private limited companies are the most sought for business structure in India and thus a major choice for foreign companies. The Foreign Exchange Management Act does not allow Foreign Direct Investment (FDI) through Proprietorship, One Person Company and Partnership. Therefore, the fastest way of opening a foreign subsidiary in India is by incorporation of a Private Limited Company. Any foreign company can either incorporate a wholly owned subsidiary or a subsidiary which is not wholly owned by the holding foreign company.


  • Minimum number of directors required for incorporation of a Private Limited Company is 2. Among these two, at least 1 should be a resident of India. (a person who has stayed in India for at least 182 days in the previous year is regarded as a resident of India in this context)
  • Minimum number of shareholders for incorporation of a company is 2. Residential status of the shareholder is not relevant in this case
  • Name of subscribers of the holding company, its nominee shareholder
  • Percentage of shareholding of subscribers and face value of shares
  • Self attested and notarized documents
  • In case of company: Board resolution duly passed for entering and forming company in India
  • In case of individuals: Passport copy, driving license, current address proof


Step 1:

DSC and DIN of Directors: Obtaining Digital Signature Certificate (DSC) and Director Identification Number (DIN) of the Directors is the first step to incorporate a foreign company in India. The documents for obtaining DSC and DIN are PAN (For Indian Nationals), Passport (For Foreign Nationals); copy of bank statement, utility bill; residence permits for foreigners (if residing in India), passport size photograph.

Step 2:

Application for Approval of Company Name: A foreign company can use the name it uses for the company where it is incorporated and can use the registered trademark (if any) for incorporation of company in India. Apart from these options, it can opt for any other name as the company so desires.

To get the name approved, the company has to login to the web portal of the Ministry of Corporate Affairs (MCA). An online form “RUN” is to be submitted for approval of name or the application for name can be filed through the integrated “SPICe” form. After completion of the form and paying the requisite fee, a name is reserved for a period of 20 days from the date of approval of the name

Step 3:

After the name of your company is approved, the following documents are to be prepared and submitted to the Registrar of Companies (ROC):

  • Memorandum of Association of the company
  • Articles of Association of the company
  • Declaration by first subscriber(s) and director(s) through Form INC-9
  • Declaration by first directors with copy of id proof and residential address through Form DIR-2
  •  Declaration from foreign subscribers in respect of not having Permanent Account Number (PAN)
  •  Proof of office address, for example, lease deed, rent agreement, etc
  • Copy of utility bills which must not be older than 2 months
  • If the Directors do not have Director Identification Number, they have to mandatorily attach id proof and residential address of the subscribers

These documents must be duly apostilled or notarized in country of origin.

Step 4:

SPICe Form: After all the documents are prepared and ready, the company has to fill e-Form INC-32, SPICe. The form contains details that needs to be filled, like, Name of Company, physical apostilled copy of MOA and AOA, PAN and TAN details, etc. After filling this form it can be uploaded in the Ministry of Corporate Affairs web portal.

Step 5:

Certificate of Incorporation: This will be generated with Company Identification Number, PAN and TAN


Post incorporation of the company the following compliances are to be done by the foreign company:

  1. Opening of Bank Account this step is important so that subscription money can be received from the subscribers
  2. Filing Advance Reporting Form with Reserve Bank of India this form deals with receipt of subscription money. This needs to be done within 30 days from the date of receipt of fund
  3. Allotment of shares this step needs to be done within 2 months from the date of incorporation of subsidiary company
  4. Commencement of Business Certificate this should be filed within 18o days of incorporation of the company
  5. Foreign Inward Remittance Certificate this must be obtained by the Reserve Bank of India according to the Foreign Direct Investment Guidelines
  6. Foreign Currency- General Permission (FC-GPR) the company needs to file details of allotment of shares with RBI within 30 days for which submitting FC-GPR is necessary
  7. Goods and Service Tax Identification Number (GSTIN) this is used to identify business registered under Goods and Service Tax


  • Form FC-1 must be filed within 30 days of incorporation of subsidiary in India. The approval of RBI under the Foreign Exchange Management Act or Regulations must be attached with the form
  • Foreign companies registered in India must keep a record of the financial statement of its business operations in India in accordance with the Companies Act, 2013
  • Every foreign company must gets their accounts audited by a practicing Chartered Accountant of India
  • Form FC-3 must be filed listing the places of business of the foreign company along with the financial statements of the company
  • Form FC-4 (Annual Return) must be filed within 60 days from the final day of financial year to the Registrar of Companies

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