India is becoming one of the most attractive markets in the world for international companies. With its growing economy, large consumer base, and improved infrastructure, many international companies are keen to establish operations in India. One of the best ways to gain entry into the Indian market is by establishing a subsidiary company.
Whether you are an established international company or a new company considering entering the market, this quick guide will help you understand how to establish your subsidiary in India.
Let’s get started.
What is a Subsidiary Company?
A subsidiary is simply a company that is controlled or owned by another company – usually based in another country. So, when a foreign company opens a branch or office in India and forms a local legal company, that becomes its subsidiary.
It’s a smart way to operate locally while still staying connected to the parent company. The Indian subsidiary can hire employees, open bank accounts, sell products or services, and carry out business independently – but under the overall control of the parent company.
Why Set Up a Subsidiary in India?
Here are a few reasons why international companies choose to set up a subsidiary in India:
- Access to the Indian market and customers
- Lower operational costs compared to many other countries
- Skilled workforce in sectors like IT, manufacturing, finance, and more
- Easier compliance and business rules compared to setting up a branch or representative office
- Ability to run the business as an independent legal entity
Who Can Set Up a Subsidiary in India?
Any foreign company – small or large – can set up a subsidiary in India. Since there are no minimum or maximum size limits. In actual fact, most sectors allow for 100% foreign ownership – in many cases, there won‘t even be a requirement for an Indian partner.
That is why the subsidiary model is so popular.
Steps to Set Up a Subsidiary Company in India
Here’s a simple step-by-step breakdown of how to set up your subsidiary in India:
1. Decide the Type of Subsidiary
Most foreign companies go with a Private Limited Company, as it gives full control, flexibility, and legal protection. It also looks more trustworthy to customers, suppliers, and government agencies.
2. Pick a Company Name
Choose a unique name that reflects your brand and is not already taken. Corporate name availability can be researched through India‘s Ministry of Corporate Affairs (MCA) portal. Ensure the name follows basic guidelines and is not too similar to an existing company.
3. Get Your Indian Business Address
You will need to have a registered office address in India. This is where your official documents will be sent. It can be a small office, a co-working space, or a virtual office – as long as it’s legally valid.
4. Get Identification for Your Directors
You will have to appoint a minimum of two directors, one of whom must reside in India. Indian regulations require companies to have at least two directors, and at least one must be a resident of India, which means they have stayed in India for 120 days in the prior financial year.
Thus, ownership can remain totally foreign, but at least one board-level person must be based locally to meet legal requirements.
The directors need to apply for:
- Digital Signature Certificates (DSC) – to sign documents online
- Director Identification Numbers (DIN) – to officially act as company directors
Don’t worry – these can all be done online.
5. Prepare and Submit Documents
You will need to prepare the following:
- Passport and ID proof of the foreign company’s directors
- Proof of address for the Indian office
- Business plan and objectives
- Documents from the parent company to show ownership
These documents might need to be notarized or attested in your home country, depending on where you’re based.
6. Apply for Company Registration
Once everything is ready, the application is submitted through the MCA portal. Once approved, you will receive the Certificate of Incorporation, which means your company is now legally registered in India.
7. Apply for Tax and Bank Registrations
After the company is registered, you’ll need:
- A PAN (Permanent Account Number) – needed for tax filing
- A TAN (Tax Account Number) – needed if you’re deducting tax
- A GST registration – if your business crosses the minimum sales threshold
- A current bank account in the company’s name
How Long Does the Process Take?
If all documents are ready and correctly submitted, the entire process usually takes 2–4 weeks. Some steps, like PAN and GST registration, may take a little longer. With professional help, the process can move faster and smoother.
Common Mistakes to Avoid
- Using an invalid address: Make sure your Indian office address is real and accessible.
- Missing documents: Ensure all paperwork is complete and signed where required.
- No Indian director: At least one director must be based in India, even if temporarily.
- Delays in compliance: Once registered, the company needs to follow monthly and yearly filing rules. Don’t ignore them.
How Indusentry Helps
At Indusentry, we understand how overwhelming the paperwork and process can feel – especially when you’re new to doing business in India. That’s why we offer end-to-end services to make your subsidiary setup simple, smooth, and fast.
We take care of:
- Name approval and documentation
- Setting up the legal structure
- Registering with Indian authorities
- Helping you with tax IDs, GST, and banking
- Offering compliance and legal support after setup
With us, you don’t just register a company – you build a foundation for growth in India.
Final Words
Establishing a subsidiary in India may not be as complex as you may think. With the proper infrastructure, support, and process, you can leverage India as you enter into one of the most exciting markets in the world.
India welcomes global entrepreneurs – and a subsidiary is one of the easiest, safest, and most rewarding ways to enter.
Looking to set up your business in India? Let Indusentry guide you through every step.