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Overview

An Indian Subsidiary is a company established in India by a foreign parent company to expand its business operations in the Indian market. The subsidiary operates as a separate legal entity and must comply with Indian laws and regulations. This structure allows foreign entities to take advantage of India’s growing economy while maintaining limited liability and operational control.

Advantages

• Market Expansion: Enables access to India's vast consumer base and resources.
• Limited Liability: Protects the parent company from direct liability for the subsidiary's debts.
• Separate Legal Entity: Ensures operational independence while maintaining parent company control.
• Access to Local Benefits: Avail tax incentives, government subsidies, and local talent.
• Ease of Fundraising: Can raise funds locally if needed.

How Fibils Helps

• Comprehensive Incorporation Support: Expert guidance through the process of registering an Indian Subsidiary.
• Compliance Services: Assistance with RBI, FEMA, and FDI compliances.
• Tax and Regulatory Solutions: Help with PAN, GST, and other registrations.
• Legal and Operational Setup: Support with shareholder agreements, office setup, and banking requirements.

Eligibility Criteria

• The parent company must be registered in a foreign jurisdiction.
• At least two directors, with one director being a resident of India.
• Minimum two shareholders (the parent company can be one of them).
• Must have a registered office address in India.

Documents Required

• Certificate of Incorporation and charter documents (MOA/AOA) of the parent company.
• PAN card, Aadhaar card, and address proof of Indian directors.
• Passport and address proof of foreign directors.
• Proof of registered office in India (utility bill, rent agreement, or property documents).
• Board resolution authorizing the creation of the Indian Subsidiary.

Process

• Reserve a unique company name through the Ministry of Corporate Affairs (MCA).
• Submit required documents for verification and approval.
• Draft and file MOA and AOA with the MCA.
• Obtain Certificate of Incorporation.
• Apply for necessary registrations like PAN, TAN, GST, and FDI compliances.
• Begin operations in compliance with local regulations.

Features

• Fully owned or partially owned by the foreign parent company.
• Can engage in permitted business activities under FDI guidelines.
• Operates as a separate legal entity with its own liabilities.
• Mandatory compliance with Indian laws and regulatory filings.

Types

• Wholly Owned Subsidiary: Fully owned by the foreign parent company.
• Joint Venture Subsidiary: Ownership shared between the foreign parent company and local Indian partners.

FAQs
Q1: Can an Indian Subsidiary repatriate profits to its parent company?
A: Yes, profits can be repatriated after complying with FEMA and RBI guidelines.

Q2: Are there restrictions on the industries an Indian Subsidiary can operate in?
A: Yes, certain industries have restrictions under the FDI policy. Consult with experts for guidance.

Q3: Does an Indian Subsidiary need to maintain separate accounts?
A: Yes, the subsidiary must maintain separate financial accounts and undergo statutory audits.

Q4: Can a foreign individual be a director of the Indian Subsidiary?
A: Yes, but at least one director must be an Indian resident.

Establish your Indian Subsidiary with Fibils for smooth incorporation and expert regulatory support. Let us help you unlock the potential of India’s thriving market!