Setting Up a Subsidiary in India: A Foreign Investor's 2026 Playbook
India's market scale and talent pool make it a priority destination for global expansion. For most foreign companies, a wholly owned subsidiary — a Private Limited Company incorporated in India — offers the cleanest structure for control, liability, and repatriation.
Choosing the Right Entity
- Wholly Owned Subsidiary (WOS): A Private Limited Company where the foreign parent holds up to 100% equity (in sectors under the automatic route). Most popular.
- Liaison Office: Represents the parent but cannot earn income — suited to market research.
- Branch Office: Can undertake specified commercial activities with RBI approval.
FDI Routes
Foreign Direct Investment comes through two routes. Under the automatic route, no prior government approval is needed (most sectors). Under the government route, approval from the relevant ministry is required (defence, media, and certain regulated sectors). Confirm your sector's cap before you commit capital.
Incorporation Steps
- Step 1: Obtain DSC and DIN for proposed directors (at least one Indian-resident director is mandatory).
- Step 2: Reserve the company name via SPICe+ Part A.
- Step 3: File SPICe+ Part B with MOA, AOA, PAN, TAN, and bank-account application.
- Step 4: Open a bank account and remit share capital through banking channels.
- Step 5: File Form FC-GPR with the RBI within 30 days of allotting shares.
Post-Setup FEMA Compliance
Foreign-owned entities carry extra reporting: annual FLA return to the RBI, FC-GPR for each capital infusion, and transfer-pricing documentation for related-party transactions. Non-compliance under FEMA can attract penalties of up to three times the amount involved.
Typical Timeline
Incorporation takes 2–3 weeks once documents are apostilled. Budget additional time for bank-account activation and RBI filings.
Statura offers end-to-end subsidiary setup, FDI/FEMA compliance, and liaison office services for foreign investors entering India.