Subsidiary Company Registration in India – Process, Requirements & Cost

• Subsidiary Company Registration allows Indian and foreign companies to legally expand operations in India
• Governed by the Companies Act, 2013 and FDI rules, it offers limited liability and full operational control
• Indian subsidiary registration is the most preferred structure for long-term business presence in India

Introduction

Many businesses lose opportunities in India simply because they don’t have a local legal presence. Clients, investors, and banks prefer dealing with an Indian entity that can sign contracts, raise invoices, and comply with local laws. This is where Subsidiary Company Registration in India becomes essential.

An Indian Subsidiary Company, registered under the Companies Act, 2013, operates as a separate legal entity with limited liability and full operational freedom. It allows both Indian and foreign companies to legally conduct business, hire employees, raise funds, and expand in India without the restrictions faced by branch or liaison offices.

What is a Subsidiary Company?

A subsidiary company is a company that is controlled by another company, known as the holding company. Control typically means owning more than 50% of the share capital or having the power to control the composition of the Board of Directors.

The subsidiary company is registered as a separate legal entity under the Companies Act, 2013. Even though it is owned or controlled by its parent company, it is treated as an independent company for legal, financial, and tax purposes. This separation is one of the key reasons why subsidiary company registration in India is preferred over branch or liaison offices.

Key Points to Understand

• A subsidiary can be wholly owned (100% ownership) or partially owned (more than 50% ownership)
• It has its own PAN, bank accounts, and statutory compliances
• The liability of the holding company is limited to its shareholding
• It can carry out full commercial and revenue-generating activities in India

Relationship Between Holding Company and Subsidiary

The holding company acts as the parent entity, while the subsidiary operates as a separate legal person. Despite ownership, liabilities do not pass upward unless explicitly guaranteed.

Ownership and Control Structure

Ownership can be:

• 100% (wholly owned subsidiary)
• More than 50% (partially owned subsidiary)

Control may be exercised via shareholding, voting rights, or board appointments.

How to Register a Subsidiary Company in India?

Registering a subsidiary company in India is a structured legal process governed by the Companies Act, 2013 and administered through the Ministry of Corporate Affairs (MCA). While the steps are similar to standard company registration, additional planning is required when the holding company is foreign-owned or part of a larger group structure.

Legal Framework Governing Subsidiary Registration

Subsidiary company formation in India is regulated under:

• Companies Act, 2013
• MCA Incorporation Rules (SPICe+ framework)
• FEMA and FDI Policy (for foreign subsidiaries)
• RBI reporting requirements (post-incorporation)

If foreign investment is involved, sector-wise FDI limits and entry routes (automatic or government approval) must be evaluated before incorporation.

Role of MCA, ROC, and Other Authorities

• Ministry of Corporate Affairs (MCA): Central authority overseeing incorporation and compliance
• Registrar of Companies (ROC): State-level authority issuing the Certificate of Incorporation
• Reserve Bank of India (RBI): Regulates foreign investment and post-incorporation FDI reporting
• Income Tax Department: Issues PAN and governs tax compliance

Who Can Apply for Subsidiary Company Registration

The following entities are eligible to register a subsidiary company in India:

• Indian companies expanding under a group structure
• Foreign companies setting up operations in India
• Multinational corporations entering the Indian market
• Startups and funded entities establishing Indian presence

What are the Initial Steps to Register a Subsidiary Company in India?

Before filing incorporation forms with the Ministry of Corporate Affairs, businesses must complete a few critical groundwork steps.

In practice, most delays in subsidiary company registration in India happen not during filing, but at this planning stage. Getting these initial steps right ensures a smooth, rejection-free incorporation and avoids restructuring later.

Deciding the Business Structure

The first step is selecting the appropriate legal structure. In almost all cases, an Indian Subsidiary Company is registered as a Private Limited Company under the Companies Act, 2013.

This structure offers limited liability, ease of fundraising, and flexibility in management, making it ideal for both Indian and foreign holding companies.

Identifying Shareholding Pattern

Next, the shareholding structure must be finalised. This includes:

• Percentage of ownership held by the parent company
• Whether the subsidiary will be wholly owned or partially owned
• Applicability of FDI limits and sectoral caps

Appointment of Directors

A subsidiary company must have:

• At least two directors
• At least one director who is a resident of India

Director eligibility, DIN availability, and residential status should be verified early to avoid last-minute changes.

Selection of Company Name

The proposed company name should reflect its association with the holding company while complying with MCA naming guidelines. Using the parent company’s brand name often requires justification and proper authorisation.

Registered Office Planning

Every subsidiary must have a registered office address in India at the time of incorporation. This address is used for all statutory communication and must be supported by valid ownership or lease documents.

Types of Subsidiary Companies in India

When planning subsidiary company registration in India, choosing the right type of subsidiary is a strategic decision. The structure determines the level of control, regulatory exposure, funding flexibility, and long-term scalability of the business.

Under Indian company law, subsidiaries are broadly classified based on ownership and the nature of the holding company

Wholly Owned Subsidiary

A wholly owned subsidiary is a company in which 100% of the share capital is held by the parent company. This is the most common structure for foreign companies entering India..

• Complete ownership and control by the holding company
• No minority shareholder involvement
• Easier decision-making and governance
• Preferred structure for technology, manufacturing, and service companies

Partially Owned Subsidiary

A partially owned subsidiary is one where the holding company owns more than 50% but less than 100% of the share capital.

Common use cases include:

• Joint ventures with Indian partners
• Strategic alliances
• Sector-specific compliance requirements

Foreign Subsidiary Company

A foreign subsidiary company refers to an Indian incorporated company with foreign shareholding, either wholly or partially owned by a foreign parent.

• Subject to India’s FDI Policy
• Sector-wise investment limits apply
• RBI reporting and FEMA compliance are mandatory

How a Subsidiary Company Works?

A subsidiary company operates as an independent legal entity while remaining strategically controlled by its holding company.

This structure allows businesses to balance local operational freedom with centralised ownership and oversight—one of the key reasons why subsidiary company registration in India is widely preferred for long-term expansion.

Operational Independence of a Subsidiary

Once incorporated, the subsidiary conducts its day-to-day business activities independently. It can hire employees, enter into contracts, raise invoices, and manage operations in its own name, without requiring routine approvals from the holding company.

Decision-Making Powers of Holding Company

The holding company exercises control through:

• Majority shareholding
• Board appointments
• Voting rights on key resolutions

Strategic decisions such as capital infusion, mergers, or restructuring are typically guided by the parent company.Investment must align with sector-wise FDI limits and conditions

Legal and Compliance Responsibilities

Despite ownership by a parent entity, the subsidiary is fully responsible for:

• Statutory filings with ROC
• Tax and GST compliance
• Regulatory and sector-specific obligations

Foreign Subsidiary Company Registration in India

A foreign subsidiary is an Indian incorporated company in which a foreign holding company owns more than 50% of the share capital. Despite foreign ownership, the subsidiary is treated as a domestic Indian company for operational, tax, and legal purposes.

FDI Policy and FEMA Regulations

Foreign subsidiary registration is governed by:

• India’s Foreign Direct Investment (FDI) Policy
• FEMA (Foreign Exchange Management Act) regulations

Most sectors allow up to 100% FDI under the automatic route, while some require prior government approval.

Automatic Route vs Government Route

• Automatic Route: No prior approval required; post-investment reporting is mandatory
• Government Route: Prior approval from the concerned ministry is required before investment

The applicable route depends on the nature of business activity.

RBI and Reporting Compliance

Once incorporated and funded, the subsidiary must comply with RBI reporting requirements, including:

• Filing of FC-GPR for share allotment
• Annual foreign liabilities and assets reporting

Documents Required for Subsidiary Company Registration

Documents of Holding Company

• Certificate of Incorporation
• Memorandum of Association (MOA)
• Articles of Association (AOA)
• Board Resolution approving Indian subsidiary formation
• Authorisation Letter for nominee/signatory

Documents of Directors and Shareholders

• PAN Card (Indian nationals)
• Passport (Foreign nationals)
• Address Proof (Bank Statement / Utility Bill / Driving Licence)
• Passport-size Photograph
• Email ID and Mobile Number

Registered Office Address Proof

• Utility Bill (Electricity / Water / Gas – not older than 2 months)
• Rent or Lease Agreement / Ownership Document
• No Objection Certificate (NOC) from Property Owner

Step-by-Step Process of Subsidiary Company Registration

Step 1: Obtain Digital Signature Certificate (DSC)

• DSC is required for all directors and authorised signatories to file forms with the MCA.

Step 2: Apply for Director Identification Number (DIN)

• DIN is obtained for proposed directors through the incorporation application.

Step 3: Name Approval

• The company name is reserved with the MCA as per naming and trademark guidelines.

Step 4: Draft MOA and AOA

• Memorandum and Articles define the subsidiary’s objectives, shareholding, and internal rules.

Step 5: File Incorporation Forms

• Incorporation documents are submitted online through the MCA SPICe+ portal.

Step 6: Certificate of Incorporation

• Upon approval, the Registrar of Companies issues the Certificate of Incorporation with CIN.

Timeline and Cost for Subsidiary Company Registration

• Government fees and stamp duty vary depending on authorised capital and state of registration.
• Foreign-owned subsidiaries may require additional time due to apostille, notarisation, and FDI-related compliance.

Validity and Renewal for Subsidiary Company Registration

Compliance Requirements After Registration

After completing subsidiary company registration in India, the company must follow ongoing statutory and regulatory compliances to remain legally active and penalty-free.

ROC Annual Filings

• Filing of Annual Return (Form MGT-7 / MGT-7A)
• Filing of Financial Statements (Form AOC-4)
• Disclosure of shareholding and directorship details

Income Tax & GST Compliance

• Filing of annual Income Tax Return
• Advance tax payments (if applicable)
• GST registration and periodic returns (if registered under GST)

FEMA Compliance for Foreign Subsidiaries

• Filing of FC-GPR for allotment of shares
• Annual Foreign Liabilities and Assets (FLA) return
• Compliance with sector-wise FDI conditions

Statutory Audit Requirements

• Appointment of a statutory auditor
• Annual audit of financial statements
• Audit report filing with ROC

Event-Based Compliances

• Change in directors or shareholders
• Increase in authorised or paid-up capital
• Change of registered office
• Issue or transfer of shares

Regular compliance ensures the subsidiary remains operational, credible, and fully compliant under Indian laws.

Common Challenges in Subsidiary Company Registration

• Incorrect Shareholding Structure
  Improper structuring can lead to FDI or FEMA non-compliance.
• Documentation and Verification Issues
  Incomplete, incorrect, or improperly notarised documents cause delays.
• Name Approval Rejection
  Non-compliance with MCA naming guidelines or trademark conflicts.
• FDI and Sectoral Restrictions
  Certain sectors require prior government approval or have ownership caps.
• Delay in Apostille or Notarisation
  Foreign documents often take additional time to legalise.
• Director Residency Issues
  Non-availability of a resident Indian director at incorporation stage.
• Post-Incorporation Compliance Gaps
  Missed ROC, tax, or FEMA filings can attract penalties early on.
• Lack of Compliance Planning
  Absence of a clear compliance roadmap increases regulatory risk after registration.

Why Choose Us for Subsidiary Company Registration?

• End-to-End Registration Support
  Complete handling from structuring to incorporation and post-registration setup.
• Expertise in Indian & Foreign Subsidiaries
  Proven experience with Indian companies and foreign-owned subsidiaries under FDI and FEMA norms.
• Compliance-First Approach
  Registration planned with long-term ROC, tax, and RBI compliance in mind.
• Transparent Pricing
  Clear cost structure with no hidden charges or last-minute additions.
• Dedicated Compliance Assistance
  Single point of contact for incorporation and ongoing statutory requirements.
• Faster, Hassle-Free Process
  Accurate documentation and proactive follow-ups ensure minimal delays.
• Business-Oriented Guidance
  Practical advice aligned with your growth, funding, and expansion plans in India.

Conclusion

Subsidiary Company Registration in India is more than a legal formality—it is a strategic step toward building a credible, compliant, and scalable business presence. Whether you are a foreign company entering the Indian market or an Indian enterprise expanding under a group structure, an Indian subsidiary offers limited liability, operational freedom, and long-term stability under the Companies Act, 2013.

However, the success of a subsidiary depends not just on incorporation, but on correct structuring, regulatory alignment, and ongoing compliance. With professional support from Silvereye Certifications, businesses can avoid common pitfalls, ensure full compliance, and build a subsidiary that is ready for long-term growth.