Setting up an Indian subsidiary from the UAE

What is different when your parent company is in the UAE?

The UAE is the seventh-largest recorded source of foreign direct investment into India. DPIIT’s fact sheet for April 2000 to March 2026 shows 3.25% of cumulative equity inflows, about US$25.6 billion. This is the country of the immediate investor, so read it as investment recorded as coming from the UAE.

Two agreements shape the relationship. The India-UAE economic partnership agreement (CEPA) came into force on 1 May 2022 and includes services and investment chapters. The bilateral investment treaty (BIT), signed in Abu Dhabi on 13 February 2024, came into force on 31 August 2024 and gives investor protection to UAE investors in India.

The company-law route does not change: in most sectors a UAE company can hold 100% of an Indian private limited company under the automatic route. See the wholly owned subsidiary page. One ownership point deserves care. A UAE holding company whose beneficial owners include a person or entity from a country sharing a land border with India can still be caught by Press Note 3 of 2020, as relaxed by Press Note 2 of 2026 (see the wholly owned subsidiary page), so disclose the ownership chain early.

Why is document authentication different for a UAE parent?

Since the UAE is not a party to the Hague Apostille Convention, mere notarisation will not suffice. The Ministry of External Affairs says documents from countries outside the Convention use normal attestation, which is a consular legalisation chain.

The chain runs from notarisation, to attestation by the UAE’s foreign ministry, to legalisation by the Indian mission in the UAE. Timings vary.

Two practical consequences follow:

• Start document preparation first. Every document that needs a signature, such as a board resolution or a director’s passport copy, goes through the chain before it can be filed.
• Have a practising CA or CS confirm the document list before you notarise anything. A wrong document costs a full cycle of attestation.

The documents guide lists what an incorporation usually needs.

Trademark and name approval. If your proposed company name is based on your trademark, bring the trademark certificate. An internationally valid trademark, as recorded with WIPO, makes name approval easier in India. Also bring a no objection letter from the trademark owner, so that the name approval goes smoothly.

What does the India-UAE tax treaty mean for payments to your parent?

A double taxation avoidance agreement (DTAA) between India and the UAE is in force. Reported ceilings, before surcharge and cess, are:

Source: * PwC Worldwide Tax Summaries, India withholding taxes (reviewed 11 May 2026).

Fees for technical services are treated as business profits. That is the point most likely to matter for a subsidiary that pays service charges to its UAE parent.

Treaty relief needs proof of residence and beneficial ownership. Under the Income-tax Act, 2025, which replaced the 1961 Act from 1 April 2026, the non-resident’s supplementary declaration for treaty relief is Form 41, in place of Form 10F. Payments to the parent are also international transactions that need a transfer-pricing report on Form 48.

How does money move from the UAE to India?

Your UAE bank handles the outward transfer. The Indian side follows the FEMA sequence:

1. The parent remits the share subscription money through an authorised dealer bank in India.
2. For this first capital injection, the subscriber shares are already committed in the Memorandum of Association, so share certificates are issued at the first board meeting rather than through the 60-day allotment rule that applies to a later, fresh issue of shares.
3. The subsidiary files Form FC-GPR within 30 days of allotment.
4. The subsidiary files the annual FLA return by 15 July.

A valuation certificate is not required for the subscriber shares issued at incorporation. This is our understanding of the current position. Confirm it with your Chartered Accountant before you rely on it. After incorporation the FEMA reporting is the subsidiary’s responsibility; the parent remits the funds and supplies documents and KYC.

Foreign-director KYC often slows bank account opening, and unauthenticated documents can slow it further. See the FEMA filings guide for the sequence in detail.

Where ProLead fits

ProLead works with UAE parents remotely, has an associate office in the UAE for coordination on the ground, and has experience of dealing with UAE companies. We coordinate parent-country documents, including the attestation chain, with your local notary and advisers, and handle the incorporation with our practising professionals and support the subsidiary’s FEMA filings.

To discuss your structure, book a free consultation.

Note: Rules and forms change often. This page is general information, not legal or tax advice. Check the current position with a practising Chartered Accountant or Company Secretary before you act.

General information only, not legal or tax advice. Rules and forms change, so confirm the current position with a practising Chartered Accountant or Company Secretary before you act. See our disclaimer.