How to open a bank account and remit capital to your Indian subsidiary

What is the order of events?

Each step has a clock that starts at the one before it, so sequence matters. For a typical foreign parent the path looks like this:

1. Incorporate the company and receive its PAN and TAN through SPICe+.
2. Open a current account in the company’s name with an Indian bank that acts as an authorised dealer (AD) bank.
3. Remit the subscription money from the parent’s own bank account into that account, through banking channels.
4. Collect the foreign inward remittance certificate (FIRC) and the remitter’s KYC from the bank.
5. The board issues share certificates for the subscriber shares at the first board meeting, held within 30 days of incorporation. This first capital injection is subscription money already committed in the Memorandum of Association, so the 60-day allotment rule for a later, fresh issue of shares does not apply.
6. The subsidiary files FC-GPR on the RBI’s FIRMS portal within 30 days of allotment.
7. The subsidiary files INC-20A within 180 days of incorporation to confirm that the subscribers have paid for their shares.

Why can the bank account take longer than incorporation?

The combined incorporation flow (AGILE-PRO-S, Form INC-35) lets you request a bank account along the way. In practice that option is often not usable for a foreign-owned company, because the bank must complete KYC on foreign directors and a foreign parent. Plan on a direct application to a bank, and start it as soon as the certificate of incorporation arrives.

Bank timelines are anecdotal. In ProLead’s experience, opening typically takes three to six weeks after incorporation when documents are apostilled and eight to ten weeks when they are not.

Banks set their own checklists. Expect to provide the incorporation documents, a board resolution, identity and address proof for directors and the parent’s authorised signatory, and proof of the registered office.

If your parent is in a Hague Apostille Convention country, the parent and director documents are notarised by a notary public and then apostilled in that country. If your parent’s country is outside the Convention, documents go through consular attestation instead: notarisation, attestation by the home country’s foreign ministry, then legalisation by the Indian mission. Our guide to documents required to set up an Indian subsidiary covers the paperwork in more detail.

It can also help to open the account with a bank where the parent already has a banking relationship in its home country. Some banks let you execute and submit account-opening documents at a branch in the parent’s own country instead of requiring every document apostilled, which can shorten this step considerably. Ask your relationship manager early whether this option is available.

What are the deadlines after the money arrives?

The FC-GPR file typically includes the board resolution, the FIRC, KYC of the remitter, the valuation certificate, a Company Secretary certificate and an auditor certificate. PAS-3 with the Registrar within 15 days applies to a later fresh allotment of shares, not to the subscriber shares. If you miss the 60-day allotment window for a fresh allotment, the money generally has to be refunded to the remitter, so do not let funds sit unallotted.

In practice, keep the remitter and the allottee as the same entity. If a different group company will pay, ask your CA first, because the remitter’s KYC has to be reconciled with the shareholder named in the filing. Our guide to FEMA filings for a foreign-owned Indian subsidiary explains each form.

How is the share price set?

Shares issued to a non-resident must be priced at or above fair value, using an internationally accepted pricing methodology for unlisted companies. A Chartered Accountant or a SEBI-registered merchant banker certifies the valuation.

The RBI Master Direction says the valuation certificate must not be more than 90 days old at the date of investment. If you plan to remit in tranches, check the date of the certificate before each remittance.

A valuation certificate is not required for the subscriber shares issued at incorporation. Read our guide to directors, shareholders and capital before you decide how much to subscribe first and how much to inject later.

What happens if you file late?

Late FEMA filings are usually regularised by paying a late submission fee. The fee depends on the amount involved and how long the delay lasts.

Do not treat the fee as the only cost. A late or missing FC-GPR can hold up later share issues, an audit certificate or a new bank facility. Put every deadline in one calendar, using the annual compliance calendar as your starting point.

Who does what?

You, as the parent, arrange the remittance and supply KYC and documents. The company’s board approves the allotment. The subsidiary is responsible for the FEMA reporting, with a CA or CS certifying and filing on its behalf, and the AD bank supports the FIRMS filing. ProLead’s professionals coordinate these steps with your bank and advisers as part of our incorporation and registration services. You can book a free consultation to map your own remittance plan.

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.