Foreign companies often want to set up an Indian subsidiary because it allows them to tap into India’s massive and growing market with over 1.4 billion people. It’s a great place for businesses to cut production costs, benefit from a skilled workforce, and enjoy a more favourable business environment due to India’s efforts to simplify rules and reduce bureaucracy. Additionally, India’s strategic location in Asia makes it a smart choice for companies looking to expand into other thriving markets in the region.

In simple terms, an Indian subsidiary is like a branch of a foreign company but with more independence. It’s a separate business entity in India that foreign companies create to take advantage of India’s market, low production costs, skilled workers, business-friendly environment, and strategic location. This subsidiary can operate and make decisions on its own, while the foreign company remains the parent overseeing its operations.

Application Requirements for Indian Subsidiary Registration

1. Foreign Investment: You must follow the allowed levels and methods of bringing in foreign investment (FDI) from your parent company. Depending on your sector, you may need approval from the Indian government for foreign investment.
2. Shareholders: Your subsidiary should have at least 2 shareholders. One of them must be your parent company with more than 50% ownership, but it can also own 100% if it nominates at least 2 Indian residents as nominee shareholders.
3. Directors: Your subsidiary needs at least 2 directors, with one being a Resident Indian (someone who has lived in India for over 120 days in the previous financial year).
4. Registered Office: You must have a fully constructed office in India, or you can use a temporary communication address during the initial setup. Later, within 30 days, you should replace it with a permanent registered office address.
5. Company Name: You can use your parent company’s name with “India” as a suffix or choose a different name. The name must be approved by the Registrar of Companies through the proper process.
6. Legal Documentation: If your company documents are from a foreign country, you must get them legalized and then submit them for registration in India.

Documents Needed to Register Indian Subsidiary Registration

• For the Holding Company:
  • Certificate of Incorporation: Proof that your parent company is legally registered.
  • Address Proof: A document showing the address of your parent company.
  • Articles of Association: The rules and regulations that govern your parent company.
  • Shareholding & Directors Details: Information about who owns and runs the parent company.
  • Board Resolution: A formal decision by the parent company’s board to create a subsidiary.
  • Power of Attorney to Authorized Person: Permission for someone to act on behalf of the parent company.
  • Digital Signature: A secure electronic signature for official documents.
• For Individual Promoters:
  • Colour Photo: A recent colour photograph.
  • Passport / Aadhar for Indians: A copy of your passport or Aadhar card for Indian citizens.
  • PAN Card or No PAN Declaration: A copy of your PAN card (if you have one) or a declaration if you don’t.
  • Consent to Act as Director (Form DIR-12): Your agreement to act as a director.
  • Digital Signature: Your secure electronic signature.