Cost to set up a subsidiary in India

What does it cost to set up a subsidiary in India?

The cost is a sum of several parts, not one fee. Some parts are paid to the government and depend on rules you cannot negotiate. Others are professional fees and office costs that depend on your choices. This page names each part and what drives it, and it deliberately gives no rupee or dollar amounts, because official fees change and ProLead quotes to scope.

For indicative ranges, see the cost and timeline page.

What are the components?

Capital you put into the company is not a cost. It is your investment and stays on the company’s balance sheet, although you should plan for the fees that the share issue itself triggers, such as the valuation certificate and the filings that follow it. A costing that leaves these out will look cheaper than it is.

How do government fees work?

The MCA fee is set by nominal (authorised) share capital and is levied on the SPICe+ filing (Form INC-32). It scales with authorised capital. We do not state the fee bands here because they change, so ask for the current figure when you request a quote.

Stamp duty is a state subject. Each state uses its own formula: a fixed amount, a percentage of authorised capital with a cap, or capital slabs.

What else changes the total?

• Authorised capital. A higher authorised capital raises the MCA fee and usually the stamp duty. Set it to match your funding plan for the next stage, not the maximum you can imagine.
• State. The state of the registered office decides stamp duty and state-level registrations such as professional tax and Shops and Establishment, which are state-specific.
• Foreign documents. More directors and more parent documents mean more notarisation and apostille. See documents required.
• Registered office. Owned, leased and virtual offices carry very different costs. A virtual or nominee-supported registered office is an option for teams without Indian premises, and it changes both the cost and the paperwork.
• Speed. Faster set-up needs more parallel work. See how long it takes.
• Sector. A sector on the government route or with caps adds advice time.

What are the running costs after incorporation?

Set-up is a one-off. The running costs recur: statutory audit, annual filings with the Registrar, income-tax return, FEMA returns such as the FLA return, payroll, accounting and, where applicable, GST and the transfer-pricing report in Form 48. The annual compliance calendar lists them, and the cost and timeline page gives indicative ranges for payroll, accounting and the annual compliance package. Budget for these from the start, since over time they can outweigh the set-up fee.

How do you get a reliable quote?

Give your adviser these details and ask for a written quote:

1. Your parent company’s country and ownership chain.
2. Your sector and the planned activities in India.
3. Planned authorised capital and first remittance.
4. Preferred state and city.
5. Number and nationality of directors, and who will be the resident director.
6. Registered office plan.
7. Expected headcount in year one.
8. Which registrations you need: GST, EPFO, ESIC, payroll.

Then check that the quote separates government fees, charged at actuals, from professional fees, and that it states what is included and what is not. Ask what happens to the price if the state, capital or document count changes. A quote that is silent on these points is usually a quote for the simplest case, and you will pay the difference later. Also ask whether recurring compliance is priced separately, so you can compare the first-year cost like for like.

To get a quote for your case, book a free consultation. ProLead’s incorporation work is described under incorporation and registrations.

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.