Indian Subsidiary

An Indian Subsidiary is a company incorporated in India under the Companies Act, 2013, which is owned and controlled by a foreign parent company. Setting up a subsidiary in India allows multinational corporations to establish a strong local presence, benefit from India’s growing market, and operate under full compliance with Indian laws. Unlike a branch office or liaison office, a subsidiary is a separate legal entity, which limits the liability of the parent company to the extent of its investment in the Indian entity.

The process of incorporating an Indian subsidiary involves several key steps. First, the foreign parent company must obtain approval for the company name and ensure compliance with the Foreign Direct Investment (FDI) policy in India. Next, Digital Signature Certificates (DSC) and Director Identification Numbers (DIN) are obtained for proposed directors. The parent company then drafts the Memorandum of Association (MOA) and Articles of Association (AOA), specifying the subsidiary’s objectives, governance structure, and operational framework. These documents are filed with the Registrar of Companies (RoC), and upon verification, the subsidiary receives a Certificate of Incorporation, making it a legally recognized Indian company.

An Indian subsidiary provides advantages such as operational independence, enhanced credibility in the local market, better tax planning, and ease in raising funds from Indian banks or investors. It also allows the parent company to fully comply with local labor, corporate, and taxation laws while maintaining strategic control.

Overall, establishing an Indian subsidiary is an effective way for foreign companies to expand their operations in India, gain access to a large consumer base, and ensure legal and operational security for their business activities.