India Entry Series: Part 2 – Step-by-Step Guide to Incorporating a Wholly Owned Subsidiary in India

Expanding into India? Setting up a wholly owned subsidiary (WOS) is one of the ways foreign companies can establish a presence in the Indian market.

But what does the incorporation process involve? What are the documentation, timelines, and other considerations?

In this article, we break down the step-by-step process, required documents, timelines, and other factors that foreign companies must consider before incorporating a WOS in India.

A. Process for Incorporating a WOS in India
The incorporation process involves multiple steps, from name reservation to initial documentation to final regulatory approvals. Below is step-by-step breakdown:

Step 1: Name Reservation
The first step in incorporating a company is obtaining approval for its name from the Registrar of Companies (ROC)[1]. The proposed name must comply with the provisions of the Companies Act, 2013, read with the Companies (Incorporation) Rules, 2014.
Process:
1. Check Name Availability: Conduct a preliminary search on the Ministry of Corporate Affairs (MCA)[2] portal to ensure the proposed name is unique and not identical or similar to existing companies or trademarks.
2. Apply via SPICe+ – Part A: Submit the name approval request through SPICe+ (Simplified Proforma for Incorporating Company Electronically) – Part A on the MCA portal.
3. Comply with Naming Guidelines: Ensure the name:
– Does not infringe existing trademarks
– Adheres to restrictions on certain words (e.g., “National,” “Bank,” “India” require additional approvals)
– Includes the appropriate suffix based on the company type (e.g., “Private Limited” for a private company)
4. Approval from ROC: The ROC will either approve or request modifications. Once approved, the name is reserved for 20 days[3].

Step 2: Preparation of Charter Documents and Other Incorporation Documents
Once the company’s name is approved, the next step is to prepare the charter documents and other required documents for incorporation. The key documents include:
1. Charter Documents: These documents interalia stipulate the company’s objectives and internal regulations. The charter documents are
– Memorandum of Association (MoA): Outlines the company’s name, registered office, objectives, liability of members, and authorised share capital
– Articles of Association (AoA): Specifies the rules and regulations for the company’s management and internal governance
2. Declaration by First Directors and Subscribers[4] (Form – INC-9): Each subscriber to the MoA and the first directors of the company must declare that[5]:
– they have not been convicted for any offence related to the formation, management, or promotion of a company.
– they have not been found guilty of fraud, misconduct, or violation of duties under the Companies Act or any previous company law in the last five years.
– all documents submitted for company registration are true, complete, and correct to the best of their knowledge.
3. Consent of Directors (Form – DIR-2): The proposed directors of the company need to provide consent to act as directors of the company.[6]
4. Other Required Documents: In addition to the charter documents and declarations, various proofs and supporting documents are required for the company, directors, and subscribers. These include:
– Company documents: Proof of the registered office address
– Director documents: Identity and address proof of the proposed directors
– Subscriber documents: Identity and address proof of initial shareholders (subscribers)
A detailed list of these documents is provided in the next section.

Step 3: Preparation and Filing of Incorporation Form
After gathering all necessary documents, the next step is to prepare and file the incorporation application using SPICe+ (Simplified Proforma for Incorporating Company Electronically) – Part B on the MCA portal. SPICe+ is an integrated form that allows for multiple registrations in a single application.
Process:
1. Filling SPICe+ Form: The form captures key details, including company name, registered office, capital structure, and details of directors and subscribers.
2. Uploading MoA and AoA: The MoA and AoA must be attached in the prescribed format. These are required to be signed by the subscribers to the MoA and a practicing professional (CA/CS/CMA/Advocate).
Where the subscriber to the MoA is a foreign national, foreign parent company, or Non-Resident Indian (NRI), the MoA and AoA must be apostilled/legalised and notarised, unless the signing party visits India and intends to incorporate the company while holding a valid business visa.
3. Filing AGILE-PRO Form: This enables registration for:
– GST (optional)
– EPFO (Employees’ Provident Fund)
– ESIC (Employee State Insurance)
– Professional Tax (for certain states) (if applicable)
4. Digital Signature & Submission: The forms must be signed by a proposed director and a practicing professional (CA/CS/CMA/Advocate) digitally through their respective Digital Signature Certificates[7] before submission to the ROC.

Step 4: Approval and Issuance of Certificate of Incorporation
Once the incorporation forms are submitted, the ROC reviews the application and verifies the documents. If everything is in order, the ROC approves and issues the COI.
Process of Approval:
1. Verification by ROC: The ROC examines the incorporation application, supporting documents, and digital signatures. If any discrepancies are found, resubmission may be required.
2. Issuance of Certificate of Incorporation (COI): Upon approval, the ROC issues the COI with the Company Identification Number (CIN). This serves as proof that the company is legally registered.
What Does the Certificate of Incorporation Include?
– Company Name and Registered Office Address
– Corporate Identification Number (CIN)
– Date of Incorporation
– PAN and TAN
– DIN to Directors (if not already allotted)
With the COI in place, the company is officially incorporated, and business operations can begin.

B. Documents Required for Incorporation
The incorporation process requires multiple sets of documents, categorized as follows:
For Directors & Shareholders (Foreign Nationals/Entities/Non-Resident Indians)
– Passport (Notarized & Apostilled or legalised)
– Address proof (Utility bill/Bank Statement)
– Specimen signature
– Passport-sized photographs
For Directors & Shareholders (Indian Nationals)
– PAN Card (mandatory)
– any one of the following:
    – Voter’s identity card
    – Passport copy
    – Driving License copy
    – Unique Identification Number (UIN)
    – Aadhar
– Address proof (Utility bill/Bank Statement)
For the Foreign Parent Company
– Certificate of Incorporation (Notarized & Apostilled or Legalised)
– Certified true copy of the Board resolution specifying inter alia the authorization to subscribe to the MoA of the proposed company and to make investment in the proposed company, the number of shares proposed to be subscribed in the proposed company, and the name of the person authorized to subscribe to the MoA
For the Indian Subsidiary (WOS)
– Address proof of the registered office in India

C. Estimated Timeline for Company Incorporation
The incorporation of a company generally takes around 15-25 days, but this timeline is not fixed. Several factors can impact the processing time, including:
– Availability and accuracy of documents: Any errors or missing information may lead to delays.
– ROC processing time: The approval process depends on the workload of the ROC.
– MCA portal functioning: Technical issues or downtime on the MCA portal can affect submission and approval timelines.
– Resubmission requirements: If the ROC raises queries or requests modifications, additional time may be needed for corrections.
– Number of applications under review: A high volume of filings, especially during peak periods, can lead to slower approvals
– FDI and other regulatory approvals: Where government approval is required under Foreign Direct Investment policy and/or for regulated sectors, such as defense, telecom, the timeline may extend due to the process involved in obtaining these approvals.

D. Cost Considerations for Incorporation

The cost of incorporating a company includes below main components:
– Statutory Fees: Payable to the government
– Professional Fees: Payable to professionals assisting with incorporation
– Others: Payable for notarisation, apostillation, DSC, etc.

E. Important points to note during incorporation

– Resident Director Requirement: At least one director of the company must be a resident in India, i.e., has stayed in India for a minimum of 182 days in the previous calendar year.
– Foreign Exchange Management Act, 1999 (FEMA) Compliance: In case of foreign investments, the company must ensure compliance with the provisions of the FEMA, including sectoral caps and regulatory approvals. Depending on the sector, FDI may be permitted under: (a) Automatic Route (no prior approval required), (b) Government Route (prior approval from authorities required)
– Sectoral Regulations: Certain sectors, such as banking, insurance, telecom, and defence, have specific entry conditions and may require prior approval from the concerned regulatory authority.

F. Closing
Establishing a WOS in India requires careful planning, regulatory compliance, and sector-specific considerations. With the right guidance, the process can be seamless and efficient.

At CorpNinja Advisors, we assist foreign companies in setting up their operations in India with a structured and compliant approach.
📩 Have questions? Email us at hello@corpninjaadvisors.com. Let’s navigate your India entry strategy together!

[1] The ROC is a government authority under the Ministry of Corporate Affairs (MCA) that handles the registration and regulation of companies in India.
[2] The Ministry of Corporate Affairs (MCA) is the government body in India responsible for regulating companies, LLPs, and corporate governance. It oversees compliance with company law and manages the online portal used for company filings and registrations.
[3] On application to the RoC and payment of prescribed fees, the RoC may reserve the name for sixty days from the date of approval.
[4] A subscriber is a person who agrees to become a shareholder when a company is incorporated. They are the first owners of the company and sign the MoA to show their commitment to taking up shares in the company.
[5] Apostillation and notarisation or legalisation may be required if signed outside India.
[6] Apostillation and notarisation or legalisation may be required if signed outside India.
[7] A Digital Signature Certificate (DSC) is an electronic signature used to authenticate and securely sign incorporation documents. It is legally recognized under the Information Technology Act, 2000, and is mandatory for filing incorporation forms with the Ministry of Corporate Affairs (MCA). DSC needs to be obtained from a licensed certifying authority in India.