Subsidiary of a Foreign Company Registration

Yes, in most sectors India permits 100% foreign direct investment (FDI) under the automatic route — meaning no prior approval from the government or RBI is required. Sectors such as IT services, consulting, manufacturing, e-commerce, and R&D all allow full foreign ownership. A few sectors (defence, media, banking, insurance) have FDI caps or require government approval; our team will advise you on which route applies to your business before incorporation begins.

Yes. Section 149(3) of the Companies Act, 2013 requires that every company incorporated in India must have at least one director who has stayed in India for a total of not less than 182 days during the financial year. This is a continuing requirement — not just at the time of incorporation. If the foreign parent does not have an India-based person available, StartBusiness can help you identify and appoint a qualified nominee director to fulfil this statutory obligation.

FC-GPR (Foreign Currency — Gross Provisional Return) is a mandatory RBI filing required under FEMA regulations whenever a company in India allots shares to a foreign investor. After the share allotment to your parent company is recorded, the FC-GPR must be filed through the RBI's FIRMS (Foreign Investment Reporting and Management System) portal within 30 days of the allotment date. It reports the details of the FDI received, the valuation of shares, and the shareholding structure. Our Professional and Growth plans include complete FC-GPR filing support.

Yes, profits can be freely repatriated to the foreign parent company in the form of dividends, provided Indian corporate tax has been paid and the required tax deducted at source (TDS) on dividends is deposited with the Indian tax authorities. There is no RBI approval required for dividend repatriation under the automatic route for most sectors. The subsidiary must also comply with the applicable Double Taxation Avoidance Agreement (DTAA) between India and the parent company's home country to optimise withholding tax on dividends.

The typical timeline ranges from 20 to 45 business days depending on the plan selected and the complexity of the foreign shareholding structure. The process includes name approval on MCA (3–5 days), DSC and DIN procurement for foreign directors (5–10 days), drafting and notarisation/apostille of parent company documents, SPICe+ filing, and post-incorporation registrations such as PAN, TAN, and GST. The notarisation and apostille of foreign directors' documents in their home country is often the longest step, and our team coordinates this process with you proactively.

An Indian subsidiary with foreign investment has two core annual FEMA obligations: (1) FC-GPR filing within 30 days of any new share allotment to foreign investors, and (2) the Foreign Liabilities and Assets (FLA) Return submitted to RBI by 15 July each year, reporting the outstanding FDI position as of 31 March. Additionally, if the subsidiary has related-party transactions with the parent (royalties, management fees, intercompany loans), transfer pricing documentation under the Income Tax Act is required. StartBusiness's annual FEMA compliance package covers all of these filings, keeping your subsidiary audit-ready throughout the year.