US to India · Incorporation guide
How to Incorporate a Subsidiary in India from the US
A practical guide for US businesses planning to establish an Indian subsidiary, covering structure, documents, incorporation steps, foreign investment and ongoing compliance.
A US company planning to build a team, serve customers or run business operations in India may consider setting up an Indian subsidiary. The right approach depends on the proposed activities, ownership, sector, investment plan and long-term operating model.
This guide explains the main decisions and stages involved. It is designed to help a US parent company prepare for a structured discussion with its Indian legal, tax and compliance advisers.
Quick answer
A common route is to incorporate an Indian private limited company with the US parent holding the shares. The process typically involves choosing the structure and name, preparing parent-company and director documents, obtaining digital signatures, filing incorporation forms with the Ministry of Corporate Affairs, and completing post-incorporation banking, tax and foreign-investment steps. The exact requirements depend on the facts and the applicable rules.
1. Confirm that a subsidiary fits your India plans
A subsidiary is a separate Indian legal entity. It can generally enter into contracts, employ staff and conduct permitted business in its own name. A wholly owned subsidiary may be possible where the sector and foreign-investment rules allow it.
Before deciding, define what the India operation will do: software development, consulting, sales, manufacturing, support services or another activity. The answer affects sector approvals, tax, GST, employment and the practical structure.
- Activities and target customers in India
- Whether the sector has foreign-investment conditions or approval requirements
- Expected ownership, capital and funding arrangements
- Hiring plans, contracts, intellectual property and group transactions
2. Prepare the parent-company and director documents
The document list varies with the shareholders and directors involved. Foreign corporate documents may need notarisation, apostille or other authentication depending on the country of execution and the filing requirements. Names, addresses and passport details should be consistent across documents.
- US parent-company formation and authorisation documents, as applicable
- Board or shareholder approval for the Indian investment
- Identity and address evidence for proposed directors and shareholders
- Registered-office evidence and consent from the property owner, where required
- Proposed shareholding, director details and business activity description
3. Complete the incorporation filings
The incorporation process is handled through the Ministry of Corporate Affairs portal. It commonly includes name selection, digital signatures for signatories, the integrated incorporation application and constitutional documents. The precise forms and attachments depend on the proposed company and current MCA requirements.
A careful review before filing helps reduce avoidable resubmissions. Incorporation is not complete until the Registrar of Companies issues the certificate.
4. Plan foreign investment and banking steps
After incorporation, the company needs to arrange its banking and funding process. Foreign capital must follow the applicable foreign-exchange rules, sector conditions, pricing requirements and reporting timelines. The correct reporting depends on the instrument, transaction and ownership structure.
Do not assume that the certificate of incorporation alone completes the foreign-investment process. Keep a record of remittances, allotment documents, valuation support where applicable and required filings.
5. Set up tax, accounting and ongoing compliance
Before the company starts operating, map its direct-tax, GST, withholding-tax, payroll, employment and corporate-law responsibilities. Requirements depend on turnover, activity, employee count, transaction type and other facts.
For a foreign-owned company, also consider intercompany agreements, transfer pricing, group reporting, documentation for cross-border payments and the reporting needs of the US parent. Establish a compliance calendar at the outset rather than waiting until the first due date.
- Accounting and monthly close process
- GST and tax registrations where applicable
- Payroll, withholding and employment-related compliance
- Annual financial statements, audit and corporate filings
- FEMA reporting and transfer-pricing documentation, where applicable
6. Track the first post-incorporation deadlines
The Certificate of Incorporation is an important milestone, but it does not complete every setup obligation. Put the first board meeting, auditor appointment, commencement-of-business declaration and foreign-investment reporting on a calendar as soon as the company is formed. Confirm each obligation and deadline against the current rules and the company's circumstances.
| Item | Typical deadline to check | Why it matters |
|---|---|---|
| First board meeting | Within 30 days of incorporation | The board must formally address initial business and governance matters. |
| First auditor | Generally within 30 days; a separate member-appointment process applies if the board does not appoint one | Do not leave the first statutory audit appointment until year-end. |
| INC-20A declaration | Within 180 days of incorporation, where applicable | The company may be restricted from commencing business or borrowing until the required declaration is filed. |
| Issue of equity instruments to a non-resident investor | Generally within 60 days of receiving consideration under the applicable FEMA rules; confirm the exact route and requirements | If instruments are not issued within the prescribed period, refund requirements may apply. Coordinate the issue, bank evidence and reporting with the authorised dealer bank. |
| FC-GPR | Generally within 30 days of issue of equity instruments to a non-resident, where applicable | This is an important FEMA reporting step after foreign investment. |
| Annual FLA return | Generally by 15 July where the reporting requirement applies | Check whether the company has reportable foreign liabilities and assets for the relevant year. |
7. How AU Corporate can support the process
We help US businesses assess their India-entry plans, compare possible structures and coordinate incorporation, foreign-investment considerations, tax, accounting, payroll and ongoing compliance. The scope is tailored to your stage of planning and the responsibilities your US team will retain.
Common questions
Frequently asked questions
Can a US company own 100% of an Indian subsidiary?＋
A wholly owned subsidiary may be possible in many sectors, but eligibility depends on the activity, applicable foreign-investment policy, sector conditions and any approval requirements.
Do the US directors need to travel to India?＋
Many incorporation steps can be coordinated remotely, but identity verification, document authentication, banking and other requirements depend on the people involved and the relevant institution.
How long does incorporation take?＋
Timing depends on document readiness, name availability, authentication, filing review and any resubmission. A reliable estimate should be provided after the facts and documents are reviewed.
What happens after the company is incorporated?＋
The company may need to complete banking, capitalisation, foreign-investment reporting, tax registrations, accounting setup and applicable corporate, tax and employment compliance.
Can AU Corporate help after incorporation?＋
Yes. Support can include accounting, tax and GST compliance, payroll, FEMA-related reporting, transfer pricing and ongoing corporate compliance, depending on the agreed scope.
Primary sources
Official sources to verify current requirements
Regulatory requirements can change and depend on the facts. Check the current version and applicability before taking action.
Next step
Planning an India operation from the United States?
Share your proposed activities and timeline with our team. We can help identify the questions to resolve before you commit to a structure or filing plan.
Discuss your plansFor an overview of our services for US businesses, visit the company registration in India from the USA page.
Related guides
Understand the factors that affect setup cost and timing.
Compare two common routes for a US business.