As a foreign company, expanding your business to India can be a smart move. With its large and growing economy, India offers a wealth of opportunities for businesses of all sizes. One way to establish a presence in India is by registering a subsidiary company.

A subsidiary company is a separate legal entity that is owned by a parent company. It operates independently, but is still controlled by the parent company. This allows the parent company to have a presence in India without having to set up a new company from scratch.

What are the types of subsidiaries in India?

There are two main categories of subsidiaries in India:

  • Wholly-owned subsidiary:

In this type of subsidiary, the parent company owns 100% of the subsidiary’s shares. However, wholly-owned subsidiaries can only be formed in sectors that allow 100% Foreign Direct Investments (FDI).

  • Subsidiary company:

In this type of subsidiary, the parent company owns 50% of the subsidiary’s shares.

The subsidiary must follow the laws of the country where it is incorporated and operates. Hence, if a foreign company is incorporated in India, then it has to follow the applicable laws in India.

Entry route for foreign Investment

  • Automatic Route:

The entry route through which investment by a person resident outside India does not require the prior Reserve Bank approval or Government approval.

  • Government Route:

The entry route through which investment by a person resident outside India requires prior Government approval. The foreign investment received under this route shall be under the conditions stipulated by the Government in its approval.

What are the Documents/Information needed to Form an Indian Company?

  • Documents required from client’s end:

In case of Body Corporate/Company acting as Subscriber cum shareholders in Indian Company:

  1. Copy of Certificate of incorporation.
  2. Copy of Memorandum and Articles of Association.
  3. Board resolution of the existing company authorizing for shareholding in the proposed company.
  4. Coy of PAN Card of Company, in case, the Subscriber Company is registered in India.

Documents that require to be drafted and filed as per Laws in India towards Company Registration:

Alongwith the documents as mentioned above, the following mentioned documents shall also be prepared and filed with the Registrar in order to file the application for Company Registration.

  1. Consent to act as a Director in form DIR 2.
  2. Declaration for non-acceptance of public deposits.
  3. PAN undertaking, in case of foreign national / foreign body corporate.
  4. Memorandum of Association of proposed Indian Company containing the main business activities and capital clause of the Company.
  5. Articles of Association of proposed Indian Company containing the bye-laws, rules and regulations of the Company.

Important Note:

  • All the documents mentioned above shall be notarized by notary public in home country and shall be apostilled/ consularised, as the case may be, in case of Foreign National acting as Director and/or subscriber or in case of Body Corporate acting a shareholder/subscriber in an Indian Company.
  • If a foreign national is present in India on Business Visa, then all the documents requires self-attestation instead of notarization and apostillation/ consularisation.
  • In case of Indian Nationals, self-attested documents would suffice.

Additional compliances in respect of Incorporating a Company having FDI

At the time of Issuance of shares to Foreign Holding Company, Issuing Company must comply with the FEMA provision. Applicant- company needs to file Form FC-GPR with RBI within 30 days from the date of receipt of Money in respect to the shares allotted at the time of Incorporation of a Wholly Owned Subsidiary in India.

Compliance in respect to inward remittance is as follows.

  1. Open current Account in Bank and generate AD code from Bank to receipt remittance from Investor.
  2. Investors remit money in an Indian bank through a swift channel.
  3. Indian bank will update the company about the receipt of money and will share details required to transfer money in companies Capital accounts.
  4. Once documents are received from the company, the bank will transfer money to Company Capital Account.
  5. Indian Bank will issue a Copy of the FIRC and KYC of the Investor to the Company.
  6. The company will file documents with RBI in the form of FC-GPR along with the following documents.
  • Copy of FIRC
  • Copy of KYC
  • Valuation Report
  • CS Certificate
  • Debit Authority letter
  • Other documents, if required by RBI.


  1. As per the provisions of Companies Act in India, there must be at-least 2 shareholders in any Indian Company, therefore there must be at least one additional shareholder in case of wholly owned subsidiary company who shall have only 1 share in order to fulfil the requirement of minimum 2 shareholders.
  1. The following words and combinations thereof cannot be used in the name of a company unless the prior approval of the Central Government is obtained
  • Board;
  • Commission;
  • Authority;
  • Undertaking;
  • National;
  • Union;
  • Central;
  • Federal
  • Republic;
  • President;
  • Rashtrapati;
  • Small Scale Industries;
  • Khadi and Village Industries Corporation;
  • Financial Corporation and the like;
  • Municipal;
  • Panchayat;
  • Development Authority;
  • Nation;
  • Statute or Statutory;
  • Corporation
  • the use of word Scheme with the name of Government (s), State, Bharat or any Government authority or in any manner resembling with the schemes launched by Central, State or local Governments and authorities

An Apostille is simply the name for a specialized certificate, issued by the Secretary of State. The Apostille is attached to your original document to verify the authenticity of the documents so that the same can be accepted in other countries who are members of The Hague Apostille Convention.

Moreover, the Countries which are not the part of The Hague Convention are required to get the documents consularized from the Indian Embassy situated in that of a particular Country.

No, in case a foreign national is in India on valid Business Visa, then all the documents for him does not required to be notarized and apostilled and the company formation application will be filed based on Business Visa, as the place of signing of all the documents shall be within India.