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Indian Subsidiary Company Registration
Setting up a subsidiary in India is a significant step for expanding your business operations and accessing one of the world’s largest and most dynamic markets. At IndiaFills.com, we specialize in providing comprehensive services for incorporating a foreign subsidiary in India. Our team of experts will guide you through the complexities of the registration process, ensuring legal compliance and assisting with all necessary documentation.
Partner with us to set up a subsidiary company in India and unlock the immense business potential the country offers. 🚀
What is a Subsidiary Company?
A subsidiary company is often referred to as a “sister company” where the parent company (also called the holding company) holds the majority shareholding and exerts control. In India, a subsidiary company is defined as a company where a foreign corporate body or parent entity holds at least 50% of the total share capital.
Types of Subsidiaries in India
- Wholly-Owned Subsidiary
In a wholly-owned subsidiary, the parent company possesses 100% ownership of the subsidiary’s shares. However, this is allowed only in sectors that permit 100% Foreign Direct Investment (FDI). - Subsidiary Company
Here, the parent company owns 50% or more of the subsidiary’s shares.
Before proceeding with setting up a foreign subsidiary in India, it is crucial to obtain approval from the Reserve Bank of India (RBI), which ensures adherence to the country’s foreign investment regulations.
Advantages of Indian Subsidiary Company Registration
- Entry into the Indian Market: India’s competitive market offers abundant opportunities for foreign businesses to expand.
- Foreign Direct Investment (FDI): Foreign companies can invest in Indian subsidiaries, benefiting from the country’s open FDI policies.
- Perpetual Succession: The company continues to operate even if there are changes in management or ownership.
- Limited Liability: The personal assets of shareholders and directors are protected, as the company bears responsibility for its debts.
- Diversification: Establishing a subsidiary opens avenues for foreign companies to expand and diversify their operations in India.
- Separate Legal Identity: A subsidiary is a distinct legal entity, allowing it to own property, enter into contracts, and initiate legal actions.
Regulatory Authorities for Indian Subsidiary Company Registration
- Ministry of Corporate Affairs (MCA): Regulates company formation and compliance.
- Registrar of Companies (ROC): Oversees the registration process.
- Reserve Bank of India (RBI): Regulates foreign exchange and investments.
Key Facts about Company Registration in India
- Company Name: Must be unique and distinguishable from existing businesses.
- Shareholders: The parent company can hold 100% of shares, or two foreign nationals can be shareholders. There is no requirement for an Indian shareholder.
- Share Capital: India does not impose a minimum capital requirement for registration.
- Directors: Minimum of two directors, with at least one being an Indian resident.
- Registered Address: Every company must have a registered office in India.
- Annual General Meeting (AGM): A mandatory requirement under the Companies Act.
- Company Secretary: Essential for maintaining statutory compliance and filing returns.
Taxation and Compliance
- Taxation: Indian subsidiaries are subject to corporate tax rates of approximately 25.36%.
- GST: Applicable to domestic sales, with monthly returns and annual filings required.
- Annual Compliance: Includes statutory audits and mandatory filings under the Companies Act.
How to Register a Subsidiary Company in India?
- Determine the Type of Company: Decide whether you want a wholly-owned subsidiary or a standard subsidiary.
- Obtain Digital Signature Certificate (DSC): This is required for signing documents electronically.
- Apply for Director Identification Number (DIN): A mandatory step for directors.
- Name Approval: Choose a unique name and apply for approval.
- Draft MoA and AoA: Prepare the Memorandum and Articles of Association.
- File Incorporation Documents: Submit documents to the ROC for approval.
- Pay Registration Fees: Fees are based on the authorized capital of the subsidiary.
- Obtain Certificate of Incorporation: If everything is in order, the ROC will issue the Certificate.
- Apply for PAN and Tax Registration: Required for taxation purposes.
- Open a Bank Account: In the subsidiary company’s name.
- GST Registration: If applicable, apply for GST registration.
Compliance Requirements for Indian Subsidiary Registration
- Foreign Exchange Management Act (FEMA): Adherence to foreign exchange laws.
- Companies Act, 2013: Compliance with all provisions under the Companies Act.
- RBI Regulations: Ensure compliance with RBI guidelines on foreign investments.
- Income Tax Act, 1961: Mandatory tax filings and payments.
How IndiaFills.com Can Assist You
At IndiaFills.com, we simplify the entire process of registering your Indian subsidiary:
- Expert Consultation: We help you choose the right structure and ensure compliance with Indian laws.
- Documentation and Filing: From obtaining DSC and DIN to filing necessary forms with the MCA, we take care of it all.
- Tax Compliance: We assist with PAN, TAN, GST registration, and tax filings.
- Ongoing Support: We provide annual compliance services, including statutory audits and filings.
Contact IndiaFills.com today to get started with your Indian subsidiary company registration and expand your business into one of the world’s fastest-growing markets! 🌍
