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How to Set Up a Foreign Subsidiary in India

A foreign company can set up an Indian subsidiary (usually a private limited company) to do business in India. Here is the process.

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FEMA
Published
August 20, 2026
Last updated
Oct 5, 2026
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4 min
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Last updated: October 2026Verified against: Government sources

A foreign company can set up an Indian subsidiary (usually a private limited company) to do business in India. Here is the process.

Structure options

  • Wholly-owned subsidiary (private limited company)
  • Joint venture with an Indian partner
  • Liaison/branch/project office (limited activities)

Process

  • Reserve the name and incorporate via SPICe+
  • Have at least one resident director
  • Obtain PAN, TAN, GST and a bank account
  • Report the FDI to the RBI (FC-GPR)

Compliance

Follow FEMA/FDI rules, RoC filings and annual FLA reporting.

Frequently Asked Questions

How does a foreign company set up in India?

Usually by incorporating a wholly-owned private limited subsidiary via SPICe+.

Does an Indian subsidiary need a resident director?

Yes — at least one director must be resident in India.

What FDI reporting applies?

Form FC-GPR to the RBI on allotment of shares.

What are the alternatives to a subsidiary?

A joint venture, or a liaison/branch/project office for limited activities.

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Quick recapKey facts & short answers

Key Facts About How to Set Up

  • Applies in: All states across India, under the relevant central law.
  • Mode: Mostly online via the official government portal.
  • Typical timeline: Ranges from a few days to a few weeks depending on the case.
  • Non-compliance: May attract penalties, interest or late fees.
  • Expert help: TaxClue completes the entire process end to end for you.

How does a foreign company set up in India?

Usually by incorporating a wholly-owned private limited subsidiary via SPICe+.

Does an Indian subsidiary need a resident director?

Yes — at least one director must be resident in India.

A penalty is the visible cost of a delay; the lost time and credibility are the larger part.

— TaxClue Compliance Desk

How to Set Up: a key compliance topic in Indian tax and corporate law that businesses and individuals must understand to remain compliant.

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Why This Matters

Staying compliant with Indian regulations protects your business from penalties, interest and unnecessary legal trouble. It is always wise to maintain proper records and documentation so that any future scrutiny can be handled smoothly. Rules and thresholds in fema are revised periodically, so it helps to review your obligations at the start of each financial year. Professional guidance from a qualified CA, CS or advocate ensures that filings are accurate and submitted well before the due date.

Small businesses and startups especially benefit from setting up a simple compliance calendar to track recurring deadlines. Government portals now allow most applications and filings to be completed online, reducing paperwork and turnaround time. Keeping your PAN, registration certificates and board resolutions organised makes every subsequent filing faster. When in doubt, it is better to seek clarification early rather than risk a notice or a late-filing penalty later.

A clear understanding of the applicable law helps you make confident, well-informed business decisions. TaxClue's experts regularly assist businesses across India with end-to-end fema support at transparent, affordable pricing. Timely compliance also improves your credibility with banks, investors and government authorities. Reviewing your obligations with a professional at least once a year keeps your business audit-ready and stress-free.

Staying compliant with Indian regulations protects your business from penalties, interest and unnecessary legal trouble. It is always wise to maintain proper records and documentation so that any future scrutiny can be handled smoothly. Rules and thresholds in fema are revised periodically, so it helps to review your obligations at the start of each financial year. Professional guidance from a qualified CA, CS or advocate ensures that filings are accurate and submitted well before the due date.

Small businesses and startups especially benefit from setting up a simple compliance calendar to track recurring deadlines. Government portals now allow most applications and filings to be completed online, reducing paperwork and turnaround time. Keeping your PAN, registration certificates and board resolutions organised makes every subsequent filing faster. When in doubt, it is better to seek clarification early rather than risk a notice or a late-filing penalty later.

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Disclaimer: This article is for general informational purposes only and does not constitute professional tax, legal or financial advice. Laws, rates and due dates change and can vary by individual case — always verify with the relevant government source (e.g. mca.gov.in, incometax.gov.in) or consult a qualified professional before acting. TaxClue accepts no liability for decisions taken based on this content.

People also ask

Questions, answered

Short, direct answers to the 4 questions readers ask most on this topic.

Usually by incorporating a wholly-owned private limited subsidiary via SPICe+.

Yes — at least one director must be resident in India.

Form FC-GPR to the RBI on allotment of shares.

A joint venture, or a liaison/branch/project office for limited activities.