Indian Subsidiary Company Registration
Companies Act 2013 provides all the rules and regulations to form a subsidiary company in India. As per the regulations if the foreign company holds more than 50% shares in the Indian company then the Indian company is called the subsidiary of the foreign company.
What are the type of companies that a foreign national or foreign company can register in India?
3 options are available in India namely:
- 1. Private Limited Company – This is most suited for IT, manufacturing, Back offices and trading companies. It is similar to C corp in USA.
- 2. Branch office – Only used by Banks
- 3. Liason Office – Only used by Airline companies
The most commonly used structure by IT, manufacturing and Trading companies is a Private Limited Company. Branch and Liason office is opened only by the Banking and Airline companies.
How to register a Subsidiary in India?
Incorporating a subsidiary is a simple and completely online process. If you are planning to have more then 5 employees, then registering your own subsidiary makes sense rather than hiring them on contract basis. Following are the steps:
- Obtain the digital signatures for the directors. Its a online process.
- Obtain the DIN that is director identification numbers for the Directors
- Apply for name reservation with the mca.gov.in
- Prepare the Memorandum of association and Articles of Association.
- File the online form for company registration
- Open the bank account with any bank. Its the online process
- Get the labour law and tax registrations.
- Start hiring employees
Who can be the shareholders in the Private Limited company / Subsidiary Company?
2 ways in which a Private Limited Company can be formed-
- Indian Subsidiary Company – In this type the foreign company will be the shareholder. The shares will be held by the parent company.
- Private Limited Company with individual as a shareholder – The individuals will be shareholders in this type. The documentation is a bit less if individuals are the shareholders.
- Yes the Indian company can be registered online in 10-12 business days. You do not need to visit India and just send the scanned copies of documents. The bank account can also be opened with you having to visit India.
- Minimum 2 shareholders are required. Both the shareholders can be foreign company or foreign nationals. 100% shares can be held by foreigners.
- Minimum 2 Directors are required. Of them 1 should be Indian resident that is staying in India. Its not mandatory to give any shares to this Indian director.
- Yes 1 resident Indian Director is mandatory to setup a company in India. We provide the resident director services and the address services. The charges for resident Indian director starts from USD 100/month and USD 50/month for the virtual office.
Is company formation in India completely online? What are the minimum requirements to incorporate a Indian company?
The minimum requirements to setup a company are as follows:
Is the Indian resident director mandatory to register a company in India? Do you provide resident director services?
What are the documents required for Subsidiary company registration in India?
Documents Required:
- Notarized and apostilled copy of passport of foreign nationals
- Notarized and apostilled copy f any utility bill like bank statement, mobile bill or internet bill with name and address on it.
- Notarized nd apostilled copy of certificate of incorporation.
Registration of a Indian Subsidiary Company :
The application for the company registration has to be done through MCA portal. Form Spice + has to filed for the same.
- Name Availability Check
- Application for digital signatures of the proposed Directors
- Preparation of documents like Charter of Company and Articles of association
- Preparation of director Affidavits
- Filing form Spice+
- Opening bank account
- Applying for Tax registration and local labor law licenses.
- Payroll and tax deductions – The payroll has to run by end of every month.
- Book keeping – We use book keeping systems like Quick Books or Zoho books complete this
- Monthly tax filing – Every company has to file monthly GST and PT returns.
- Annual Tax and audit – Every company has to file the annual tx return and get the audit completed..
Bank account opening for Indian Subsidiary company:
We can connect you with global banks like HSBC or even the local banks like HDFC or ICICI. You do not need to visit India to open the account. You can just sign the forms and send it via post. It takes 2-3 weeks to get the account opened.
Monthly and annual compliances for the company:
What is the cost to register a company and for annual tax filing of the company?
Registration – The one time cost to register a company along with Bank account is USD 1100. (This includes government and professional fees fees)
Annual Book Keeping, Tax filing and Payroll fees – This depends on numer of employees. Generally for employees upto 20 the fees starts at USD 200/mont
Indian Company Registration by Foreigners/Non -Indians/NRI
Any person not resident in India or foreign nationals can register a company in India.
Indian company registration is best way to do following activities in India:
- IT company
- Back office for technology companies and Offshore software development centre in India .
- Selling online on amazon or through physical locations in India
- Importing or exporting goods in India
- Hiring employees in India
The Indian Company formation process is completely online . Indian company registration can be completed in 20 days. Our package includes assistance in bank account opening.
Brief company registration process:
|
Step 1 |
Company registration |
· Online process and no need to visit India · 8-10 days to complete · Minimum 1 Indian resident required to be appointed as director · No need to allot any shares to Indian Director · 100% shares can be held by foreign company or foreign nationals |
|
Step 2 |
Bank Account Opening |
· Can be opened online · 15 Days to complete · You get the credential for operating online bank account |
|
Step 3 |
Tax registrations |
· GST registration which is completely online · 5-8 Days |
|
Step 4 |
Payroll Setup |
· Drafting employment agreements · Setting up an online payroll system · Onboarding Employees |
|
Compliances |
Tax and Audit |
Monthly tax filings and annual Audit |
Difference between Private Limited company, Branch office and Liasion office
|
Subsidiary Company |
Branch Office |
Liaison Office |
|
|
Permitted Activities |
All activities possible including manufacturing and trading in India, back office for IT companies or selling online in India |
|
|
|
Minimum requirements |
2 Shareholders ( all can be foreign nationals) 2 Directors ( at least 1 should be Indian resident) |
A Indian resident to head the branch office |
A Indian resident to to head the liaison office |
|
Disadvantages |
No Disadvantages |
Cannot provide all kind of services to its parent company and stringent requirements to setup. |
Cannnot hire employees to provide services to the parent company |
|
Our Take |
This is the most suitable structure for those wanting to start a business in India |
Suitable for equipment suppliers in India to provide after sales services in India |
Suitable for shipping and airline companies in India |
