Starting up a Subsidiary in India: Your Ultimate Guide to registering a Subsidiary Company in India

Do you intend to increase your business presence in India? Formation of a subsidiary is one of the most reliable and stable strategies. Here, we are going to take you through the whole procedure of registering an Indian subsidiary company, explain why it is usually the most appropriate company registration in Indian subsidiary enterprises and how a subsidiary business in India can open growth opportunities.

Reasons to pick an Indian Subsidiary? The Strategic Edge

It is a good place to start before getting into the formalities, why so appealing an avenue is the Indian subsidiary registration:

Separate legal personality: When it is incorporated, the subsidiary becomes a discrete legal entity - liabilities, assets, agreements and liabilities belong to it (not to the parent).
Limited liability: Shareholder (including the parent) protection up to an extent of their investments.
100 percent FDI permitted: In most of the industries, any foreign firm can have 100 percent ownership in the Indian company where it is registered without any pre-registration permission.
Accessibility to local bank and credit facilities: There is a better opportunity of a local entity to open bank accounts, take loans and conduct business in Indian currency, which is not easy with foreign entities.
Perpetual succession: The subsidiary is not subject to alteration in its management or shareholding that will impact the continuation.
Tax and regulatory benefits: India has tax treaties, special economic zone incentives, local compliance, and so on.

Due to these benefits, the subsidiary registration in India has become the best entry and operating mode of many multinational groups in the Indian market.

Indian Subsidiary Business Structures

You are free in making several structural decisions when you decide to proceed with subsidiary company registration in India. The most common ones include:

Wholly Owned Subsidiary

The parent company has 100 percent of the share capital. This provides total control of the operations, policies and decision making.

Partially Owned Subsidiary

The parent does not have the absolute control but only a substantial proportion (say >50% or less). The owners can be local partners or investors.

Joint Venture Subsidiary

To establish a subsidiary, two or more entities join with equal or almost equal share. It comes in handy in local partnerships or pooling of domain expertise.

Every structure possesses advantages and disadvantages, such as the governance, taxation, participation in the locals, and compliance. Depending on the strategic objectives of your business, risk tolerance, availability of capital, and the industry regulations, your decision will be made.

Indian Subsidiary Company Registration Procedure Step-by-Step

A comprehensive stepwise procedure on how to do the indian subsidiary company registration in India is as given below.

Decide the Type & Structure

Choose between a private limited, full ownership, partial ownership or joint venture subsidiary. This aids in the determination of shareholding, management and compliance design.

Get Digital Signature Certificates (DSCs)

Any directors that are proposed must come up with DSCs. Electronic forms will be submitted to the Ministry of Corporate Affairs (MCA) by means of such digital signatures.

Apply Director Identification Number (DIN)

Every director must have a DIN which is a distinct identity with MCA. DIN applications may be made online in the incorporation process.

Name Approval

Select a new name of the subsidiary and seek registration in accordance with the provisions of naming in MCA. Do not use such names that are close to other names.

Draft MoA and AoA

Make ready Memorandum of Association (MoA) and Articles of Association (AoA). These constitution documents identify the aims of the subsidiary, regulations, member rights, and others.

File Incorporation Forms

Approve your name, then submit incorporation documents to ROC with the help of the SPICe+ (Simplified Proforma for Incorporating Company Electronically) form. Add MoA, AoA, identity evidences, address evidences, parental resolution, and capital outlay.

Pay Registration Fees

According to the shares as authorized, a registration fee should be paid to the Registrar of Companies.

Jackson County College has a Certificate of Incorporation

Provided all is well, ROC will provide a Certificate of Incorporation which will be a formal finalization in the registration of a subsidiary company in India.

PAN, TAN & Bank Account

After incorporating, request a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) at the Income Tax Department. Next open a bank account of the subsidiary.

GST & Other Registrations

In case your subsidiary can exceed turnover limits or where taxable supply is involved, request GST registration. Acquire the business-specific licenses or registration also.

Forms, which are necessary in Indian Subsidiary registration

In order to smooth sail your registration of an indian subsidiary, the following is a list of documents that are required:

MoA & AoA
Address proof of company
Utility bills (to check the address)
Parent company authorization incorporation resolution.
Share capital information
Incorporation certificate of parent company (foreign)
DIN and DSC documents of directors.
Identity Proofs of shareholders and directors address.
Passport-size photographs
Director / shareholder statement.
Disclosure of other directorship or other business interests.

The preparedness and accuracy of all documents will prevent the delays in subsidiary registration.

Why Services Plus is the best choice in registering your Indian subsidiary

This is where best company registration of Indian subsidiary turns out to be not a mere saying, but an outcome. By joining the Services Plus team, you enjoy:

Specialised advice - in the areas of legal, tax, compliance and company law.
End to end service - name application to after incorporation licenses.
Speed and efficiency - reducing the registration schedule.
Tailored services - based on the character of your subsidiary business in India.
Open cost model - that does not have any secretive fees.

We do indian subsidiary company registration that is seamless, compliant and scaleable.

Typical Obstacles & The Way to beat them

Despite a clear way, there might be some issues in the indian subsidiary registration:

Name battles: Your first choice of name might be used by someone else - have back-up names.
Checking of the documents: Differences in notarization regulations across nations may result in time wastage - pre-check with Indian embassies.
Other restrictions on Sectoral FDI: Certain sectors are limited to foreign ownership - never forget to inquire about previous approval conditions.
Local compliance burden: Monthly bookkeeping, audits, tax filings — plan for ongoing compliance.
Resident director mandate: There should be at least a director who is an Indian resident - arrange.

Frequent Pitfalls and the Way to avoid them

Despite such a clear direction, certain difficulties might occur in indian subsidiary registration:

Name clash: Your name of choice might belong to someone, you should have alternative names so that you are not denied your desired name.
Doc verification: The disparity between the rules of notarization among the countries may become an issue of delays pre-check with Indian embassies.
Restrictions on sectoral FDI: There are certain industries where there is a limitation on foreign ownership, it is always necessary to ensure that some prior approval is in place.
Local compliance load: Bookkeeping, audits, tax filings - monthly plan- how to continue to comply.
The requirement of resident director: One of the directors should be a resident of India, that is, plan accordingly.

The advisor, who is on the right side, can predict such problems and can guide you out of them.

Growing Your Business through Your Subsidiary

After you have reached the subsidiary registration in India, the following are some of the strategic levers to maximize its effects:

Local brand presence: It is likely that customers and suppliers will feel more comfortable working with Indian branches as opposed to foreign ones.
Tax and treaty benefits: Optimise cross-border dealings using treaties of India on the double taxation avoidance.
Take advantage of government subsidies: Tech parks, SEZs, innovation grants - your subsidiary can benefit.
Access to talent: Recruit local workers that are familiar with Indian markets, languages, culture.
Scaling operations: As your Indian subsidiary expands, you can spin off divisions, joint venture or even some partial divestments.

A properly organized subsidiary company in India is your rocket launch into a further penetration into the market.

Final Thoughts

The process of registering indian subsidiary company may appear to be an uphill task, yet with proper plan of action and advice, the journey will be as easy as it can be. Whether it is total control through a wholly owned subsidiary, or co-owning through a joint venture subsidiary, each path has got its own benefits when well laid.

In case you are venturing into the subsidiary business in India or seeking the most appropriate company registration in Indian subsidiary, we are at Services Plus to assist you not only in the paperwork and compliance but also on the strategy and implementation.