Setting up an Indian subsidiary from the United Kingdom

What is different when your parent company is in the United Kingdom?

The UK is the sixth-largest recorded source of foreign direct investment into India. DPIIT’s fact sheet for April 2000 to March 2026 shows 4.68% of cumulative equity inflows, about US$36.9 billion. This is the country of the immediate investor, so read it as investment recorded as coming from the UK.

The biggest change for a UK parent is recent. The India-UK economic and trade agreement (CETA) was signed on 24 July 2025 and came into force on 15 July 2026. According to the Press Information Bureau, CETA covers 137 services sub-sectors and includes provisions for business visitors, intra-corporate transferees, contractual suppliers, independent professionals and investors.

CETA does not replace company law or FEMA. The route for your subsidiary is the same as for any foreign parent: in most sectors, 100% ownership under the automatic route, subject to prohibited sectors and caps. See the wholly owned subsidiary page.

Can UK staff work in India without double social security?

A companion Double Contribution Convention on social security was signed on 10 February 2026 and came into force on 15 July 2026. Per the PIB, the exemption from dual social security contributions for temporary assignments was extended to five years, from three. That matters if you second UK employees to the Indian subsidiary, or the reverse.

For Indian-side employment rules, including the new Labour Codes, see the hiring guide.

How do you authenticate UK documents for India?

The United Kingdom has been a party to the Hague Apostille Convention since 24 January 1965, and India since 14 July 2005. The Ministry of External Affairs states that a document apostilled in a Hague member country needs no further attestation or legalisation for use in India. So the route is for a notary public to notarise the parent’s and directors’ documents, and for the Foreign, Commonwealth and Development Office (FCDO) to apostille them.

Typically you need the following, notarised and apostilled:

• For an individual director or subscriber: the passport, as identity and address proof.
• For a corporate subscriber: the certificate of incorporation, a board resolution authorising the subscription and authorised signatory details.

The documents guide lists the full pack.

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-UK tax treaty mean for payments to your parent?

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

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

The rates depend on the category of payment, so do not read them as one blanket figure.

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. Capital gains on a sale of shares in the Indian subsidiary depend on the treaty, the facts and when the shares were acquired. Consult a Chartered Accountant or tax adviser before you plan an exit. Payments to the UK parent are also international transactions that need a transfer-pricing report on Form 48.

How does money move from the UK to India?

Your UK 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. See the guide to opening a bank account and remitting capital for the practical sequence.

Where ProLead fits

ProLead works with UK parents remotely, and has an associate in the UK for coordination on the ground. We coordinate parent-country documents with your local notary and advisers, and handle the incorporation with our practising professionals and support the subsidiary’s FEMA filings. Our leadership includes ACCA (UK) qualified professionals.

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.