How to Form an Indian Subsidiary in Delhi: Complete Guide

Thinking of expanding your business into India? Setting up a subsidiary in Delhi could be your golden ticket. With booming markets, a massive consumer base, and investor-friendly policies, India—especially Delhi—has become a hotspot for foreign businesses. This guide will simplify every step of forming an Indian subsidiary for you.

What is a Subsidiary Company in India?

A subsidiary company in India is a business entity where a foreign parent company holds a majority of shares, typically 99% or 100%. This structure allows foreign companies to operate in India while enjoying full control and limited liability.

Why Choose Delhi to Set Up Your Indian Subsidiary?

Delhi is the heartbeat of India’s commercial landscape. With world-class infrastructure, access to policymakers, and a flourishing startup ecosystem, Delhi offers everything a foreign company could ask for. Plus, being close to the capital ensures smooth legal processes and rapid business growth.

Types of Subsidiaries in India

Wholly Owned Subsidiary: In this structure, the foreign parent company owns 100% shares of the Indian subsidiary. It’s perfect if you want complete control of your business.

Joint Venture: If you wish to partner with a local player, a Joint Venture allows shared ownership, resources, and risks.

Benefits of Setting Up a Subsidiary in Delhi

• 100% Foreign Direct Investment (FDI) allowed in many sectors
• Complete control over operations
• Access to a skilled workforce
• Tax benefits and government schemes
• Easy access to North Indian markets

Step-by-Step Process to Form an Indian Subsidiary in Delhi

• Determine the Type of Entity: Choose between a Private Limited Company, LLP, or Branch Office.
• Name Approval: Reserve a unique company name via the MCA RUN service.
• Prepare Documents: DSC, DIN, MoA, AoA, etc.
• Incorporate the Company: Use the SPICe+ form on the MCA portal.
• Post-Incorporation Tasks: Apply for PAN, TAN, open a bank account, and register under GST if applicable.

Documents Required for Subsidiary Registration

• Foreign Directors: Passport (Notarised & Apostilled), Address Proof, Photos
• Indian Directors: PAN, Aadhaar, Address Proof, Photo
• Office Address Proof: Rent Agreement, NOC, Utility Bill

Mandatory Legal Compliances

• Annual filings with ROC
• Statutory register maintenance
• Auditor appointment
• Board meetings and AGM
• IT Returns filing

Bank Account Opening

With incorporation documents in hand, opening a business account with major Indian banks like SBI, HDFC, and ICICI is straightforward.

Taxation of Foreign Subsidiaries

• Corporate Tax: Between 25%-30% depending on turnover
• GST: Mandatory above INR 40 lakhs (INR 20 lakhs for services)
• Transfer Pricing: Must comply with Indian rules for parent-subsidiary transactions

Labor Laws & Hiring

• Issue formal offer letters
• Minimum wage compliance
• EPF & ESI registration
• Maintain employee records

Intellectual Property Protection

India follows a “first to file” system. Register trademarks, copyrights, and patents early to secure your IP rights.

FEMA and RBI Compliance

Report all foreign investments within 30 days of share allotment using the FC-GPR form under FEMA guidelines.

Common Challenges

• Documentation delays
• Complex tax/labor compliance
• Transfer pricing complications
• Bureaucratic red tape

Why Professional Help Matters

Engaging a firm familiar with Indian subsidiary laws ensures a smoother and compliant entry into the Indian market.

Conclusion

Setting up an Indian subsidiary in Delhi can be a game-changer for your global business strategy. With the right knowledge and support, the process becomes straightforward and rewarding.

FAQs

1. What is the minimum capital to start a subsidiary in India?
No minimum capital requirement. You can start with as little as INR 1 lakh.

2. Can a foreigner be a director in an Indian company?
Yes, but at least one director must be an Indian resident.

3. How long does it take to incorporate a subsidiary in Delhi?
Usually 15-20 working days if documentation is complete.

4. Is GST registration necessary?
Yes, once your turnover exceeds the mandatory threshold.

5. What are the annual compliances?
ROC filings, IT returns, board meetings, statutory records, and labor law compliance.

For assistance, Contact Us