An Indian subsidiary is an Indian company whose shares are held, wholly or partly, by a foreign parent. It is almost always incorporated as a Private Limited Company, which is the structure Indian law and Indian banks are built around, and it gives the parent a local corporate identity with its own PAN, its own bank account and its own ability to contract.
India is consistently among the fastest-growing large economies, and most sectors are open to 100% foreign direct investment under the automatic route, which needs no prior government approval. What the law does require is concrete: at least two shareholders, at least two directors of whom one must be resident in India, a physical registered office, and reporting of the foreign investment to the Reserve Bank of India once the capital arrives.
None of it requires anyone to fly to India. The entire incorporation is filed electronically and signed with digital signatures, which is why a foreign parent can be incorporated here remotely.
- Usual structure
- Private Limited
- A public company or an LLP is also possible
- Shareholders
- Minimum 2
- The parent company can be one of them
- Directors
- Minimum 2
- At least one resident in India
- Foreign holding
- Up to 100%
- Automatic route in most sectors
- Minimum capital
- None prescribed
- Authorised capital of ₹1 lakh is required
- Incorporation time
- 15 to 18 business days
- With complete apostilled documents
- Corporate tax
- Around 25.36%
- Effective rate, plus surcharge and cess
- FDI reporting
- Within 30 days
- FC-GPR filed with the RBI after capital arrives