In the wake of India’s liberalization policies, the country has been transformed into a land of opportunity. With its English-speaking, young, and growing middle class—representing one of the largest economies in the world—enormous talent pool, growing appreciation, and appetite for good quality products and services, it’s no surprise that many overseas businesses have India firmly in their sights.
Of course, with the opportunity comes challenges, and India has its share. A large bureaucracy varied by state and region, culture, industry sector, foreign investment regulations, forex restrictions, etc. adds layers of complexity that can be tedious while forming a subsidiary of a foreign company in India.
Your Local-Global Experts
With Remunance by your side, you are spared the need to understand the many and varied Indian subsidiary laws or the need to hire a skilled lawyer.
From EOR services to growing your remote team in India to incorporating your legal entity and getting it off the ground, our legal experts have the experience and knowledge to incorporate the subsidiary in India take the burden completely off your shoulders.
Company formation in India can be a time- and cost-intensive exercise, without the right guidance. There are several aspects to consider, plan and provide for, from incorporation to extraction of revenue to IP protection.
Remunance has the people, knowledge and legal acumen to make it happen for you. Beyond our experience, which stretches back more than a decade, we pride ourselves on our forthrightness, transparency, and steadfastness. When we onboard a client, we take on a partner for the long haul.
Forming your own entity brings a number of benefits, the biggest being limited liability from the parent company. This protects shareholders from possible loss. In addition, a local subsidiary can acquire property and has the freedom to decide how your subsidiary should be run, its culture, processes, etc. can be the same as the parent company or completely different.
Remunance’s team, comprising chartered accountants and lawyers, and legal professionals, facilitate a smooth set-up and operations
Foreign company registration in India/renewal with concerned authorities, compliance management
Accounting & Taxation support
We provide cloud-based accountancy software and ERPs so you have clear sight of fiscal matters from wherever you are. Our team coordinates with your own CFSs, CPA, and auditors to ensure the accounting is compliant with your own country’s GAAP
Registration with different government authorities, as needed
Our management team will guide your team through various processes— e.g. fund flow, banking, local culture—helping you get off the ground smoothly
This includes hiring, onboarding, payroll management, taxation, benefits, etc.
How can a company operating outside India, start a business in India and retain 100 % ownership? or What is the procedure for foreign companies to start a business in India?
- Yes. Anyone can start a company in India, by complying with the provisions of the Companies Act and approval from the Reserve Bank of India as necessary.
- A company outside India can form a wholly owned (100%) subsidiary in India. There has to be one local Indian Resident Director.
- Foreign Companies can set up a company in India as their subsidiary.
- For all practical purposes, the branch will be treated as a local company and will have to comply with all local filing and compliances
What are the mandatory financial and legal compliance requirements for a subsidiary / foreign company in India?
- All local laws will be applicable to foreign Companies having offices in India / Indian subsidiaries as applicable to any Indian company
- For any company other than a ‘Non-Banking Financial Company’ an amount of a minimum of INR 1 lakh in the form of share capital is required
- Reserve Bank of India is the apex bank of India. All foreign Investments are subjected to RBI’s auto/ specific approvals
Checklist for Pvt. Ltd. Company formation in India
For setting up a subsidiary in India, you will need:
- Minimum 2 directors, out of which one will be an Indian resident (All directors will need a Director Identification Number and Digital Signature)
- Finalize place of business as a registered office
- Finalize 3 name options with justifications
- Decide the main object, ie. the area of Business/ activities of the business for the company
- The holding company will be required to sign the incorporation documents in it own country and there has to be an apostille for the same
Is it easy to set up a company?
- Yes. Mere setting up of a company (Other than NBFC or negative list) is a straightforward process and not time-consuming
- Based on the area of work/ activities and approvals required, the minimum period will be 4 weeks is required. It may take up to a maximum of 24 weeks.
- Winding up a Pvt. Ltd. company is a complex process and will take a longer duration. It can take up to a year or two and involves clearance from various government departments.
Which laws are applicable for the Indian subsidiary/ office of a foreign company operating in India
- Employee-related laws – Provident fund, Profession Tax, Employee State Insurance, labor welfare, salary TDS, minimum wages, bonus, etc
- Other commercial laws – Companies’ Act, FEMA, Income Tax, GST
- Indian subsidiary/ office of a foreign company operating in India will be subjected to statutory Audit under the Companies Act, Tax audit under Income Tax Act, GST audit, Transfer Pricing Audit
From the Blog
Five things to know before you form a subsidiary company in India
How to setup a subsidiary in India
PEO VS Subsidiary – What’s Best for International Business Expansion in India?