Setting Up an Indian Subsidiary for a US Research or CRO Company

Prepared by AU Corporate's CA-led advisory team · Published 12 October 2026 · General guidance only; regulated research requires activity-specific review.

A US research business may consider India for scientific support, data analysis, laboratory work, clinical research operations, research administration or other specialist services. These activities should not be treated as one regulatory category. Before setting up an Indian entity, identify the work it will perform and whether any study, product or facility approvals apply.

1. Classify the proposed research activity

Start with a clear description of the work rather than relying on the label “research” or “CRO”. The regulatory position may differ depending on whether the team performs non-clinical analysis, scientific support, clinical-trial tasks, bioavailability or bioequivalence studies, laboratory testing, data management or research administration.

This is an initial planning list, not a legal classification. A regulatory specialist should confirm the relevant category, especially before any activity involving human participants, investigational products or regulated studies begins.

2. Choose the right legal structure

A private limited subsidiary may be worth evaluating where the US parent wants a dedicated Indian entity to employ a team, sign service agreements, pay local costs or build a long-term research operation. Other structures may be available in some cases, but eligibility, permitted activities, ownership and governance conditions differ.

Describe the proposed activities accurately when checking foreign-investment rules. If the business combines general research support with regulated services, assess each material activity separately rather than assuming one answer covers the whole operation.

3. Map sponsor, CRO and study responsibilities

For clinical research, identify the sponsor, the Indian entity, any CRO and the other parties involved. Define which tasks are delegated, who oversees the work, how deviations and safety matters are escalated, which records must be maintained and who is responsible for each required submission or approval.

Where tasks are delegated, the written agreement and study documentation should match the applicable rules. Do not assume that outsourcing a task removes every obligation of the sponsor or replaces a required regulatory or ethics approval.

4. Build quality and data controls into the operating model

Research operations depend on reliable records. Define document control, access permissions, change history, quality review, training, incident handling, retention, vendor oversight and business continuity. If the India team will access US or other overseas systems, assess the data and security requirements of each party.

For data involving participants, health information, confidential study materials or personal information, review the applicable privacy, consent, security and cross-border transfer requirements. The correct controls depend on the study, data type and locations involved.

5. Document intercompany services, fees and intellectual property

If the Indian entity performs research or support services for its US parent, document the scope, deliverables, quality responsibilities, cost allocation, service fees, confidentiality, IP rights and ownership of work product. If patents, inventions, datasets, protocols or methods may be created, decide how ownership and permitted use will be handled before work starts.

Cross-border related-party transactions may require transfer-pricing analysis and documentation. Keep the contract, invoices, cost calculations and records of services consistent with the work actually performed.

6. Plan people, facilities and vendors

Identify the skills and roles required, who will employ the team, the qualifications or training needed, and whether any staff require study-specific or facility-specific training. If the business needs a laboratory, equipment, clinical sites, specialist vendors or local investigators, assess those needs and the associated permissions separately.

Include payroll, applicable employment registrations, insurance where relevant, procurement, safety, vendor qualification and records management in the operating plan.

7. Set up the corporate and tax compliance calendar

Alongside any research-specific obligations, plan company-law filings, accounting, audit, income tax, GST where applicable, payroll, withholding, foreign-investment reporting and transfer-pricing work. Assign an owner and evidence checklist for each recurring task.

For the company formation steps, see our company registration guide for US businesses, the post-incorporation checklist and the annual compliance calendar.

Official regulatory starting points

• Central Drugs Standard Control Organisation (CDSCO) CRO information.
• India clinical research regulatory overview from the National Institute of Allergy and Infectious Diseases' ClinRegs resource.
• DPIIT for foreign-investment policy and sector conditions.
• Ministry of Corporate Affairs for company incorporation and filings.

These links are starting points. Confirm current requirements for the exact study, product, facility and service model before beginning regulated activity.

Frequently asked questions