How to incorporate a subsidiary in India, step by step

What happens before you file?

1. Confirm the sector route. Check that your sector allows 100% foreign ownership under the automatic route, and check whether any beneficial owner comes from a country that shares a land border with India. See the wholly owned subsidiary page for the rules.
2. Decide the structure. Fix the shareholders (a private company needs at least two members), the directors (at least two, one of whom meets the 182-day residence test in the financial year), the authorised capital and the registered office address.
3. Prepare the parent’s and directors’ documents. Foreign individuals’ passports and the parent’s corporate papers must be legalised for use in India. For a Hague Apostille Convention country, they are notarised by a notary public and then apostilled. For any other country, they are notarised and then attested by the Indian consulate or embassy. If the company name is based on your trademark, also arrange the trademark certificate (an internationally valid mark, as recorded with WIPO) and a no objection letter from the trademark owner, so that name approval goes smoothly. Our guide to documents required has the checklist.
4. Obtain a Class 3 digital signature certificate for each first director. DINs for first directors are applied for within the SPICe+ filing, so they are not a separate first step. A foreign national without a DIN can associate a DSC as authorised representative using PAN.

How do you file with MCA?

1. Reserve the name. Apply through the RUN (Reserve Unique Name) form with up to two proposed names. The reservation is valid for 20 days from approval, so have your SPICe+ filing ready. Names with a foreign country name need proof of a business relationship.
2. Complete SPICe+ (Form INC-32), with the e-memorandum (INC-33) and e-articles (INC-34). DINs for the first directors are allotted with this filing.
3. Add the linked registrations. AGILE-PRO-S (INC-35) covers EPFO and ESIC registration, and optionally GSTIN and other registrations, though in practice it usually makes more sense to apply for GST separately. PAN and TAN are issued through SPICe+.
4. Receive the certificate of incorporation. The company exists from the date on the certificate.

What comes after the certificate?

1. Open the bank account. The bank account option inside SPICe+ is often not practical for a foreign-owned company because of foreign-director KYC, so plan for a separate application with the parent’s documents.
2. Remit the capital. Money reaches the company through banking channels, and the AD bank issues an inward remittance certificate.
3. Issue share certificates for the subscriber shares at the first board meeting (see step 5 below). This first capital injection is subscription money already committed in the Memorandum of Association at incorporation, so the 60-day allotment rule for a later, fresh issue of shares does not apply here.
4. File the FEMA returns. File Form FC-GPR through the AD bank on FIRMS within 30 days of allotment. A valuation certificate must not be more than 90 days old at the date of investment. Form PAS-3 with MCA (within 15 days of allotment) applies to a later fresh allotment of shares, not to the subscriber shares issued at incorporation. See FEMA filings for a foreign-owned Indian subsidiary.
5. Hold the first board meeting within 30 days of incorporation, and appoint the first auditor within 30 days of registration, and file the appointment with MCA.
6. File INC-20A within 180 days of incorporation, declaring that each subscriber has paid for the shares. The bank statement and registered-office evidence support it.
7. Set up recurring compliance. Significant beneficial owner declarations where they apply, DIN KYC every three financial years by 30 June, the FLA return by 15 July, and annual accounts and returns.

How long does it take?

Only the deadlines above are fixed by rule. Everything else is anecdotal. ProLead’s usual process runs up to about 30 days to a certificate of incorporation, most of it spent on parent-company documents and their apostille or attestation. Name approval typically takes one to three working days, and a simple incorporation typically takes 7 to 15 working days in total, with foreign-director apostille adding time. Foreign-parent structures typically take 7 to 10 weeks at best and longer with delays, and opening a bank account can add several weeks. ProLead has completed one overseas group’s subsidiary in under three weeks, including opening the bank account. See how long it takes and the cost and timeline page.

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.