India subsidiary setup for US companies - 2026 playbook

We set up Indian subsidiaries for US founders most months. The companies that get it right finish in three to four weeks. The companies that do it wrong spend three to four months untangling registrations, FEMA filings and bank-account paperwork. The difference is almost always the order of operations - what you sequence first, what you do in parallel, and what you absolutely cannot skip.

Pick the right structure (week 0)

Almost every US company setting up in India should incorporate a wholly-owned Indian subsidiary as a Private Limited company. Branch offices, project offices and liaison offices exist but they have severe restrictions. Branch offices cannot do anything beyond a narrow list of permitted activities (exports, consultancy, research, IT). Liaison offices cannot earn revenue at all. For 95% of US founders, a Pvt Ltd subsidiary is the answer.

FDI route: most sectors fall under the Automatic Route, meaning no government approval is required to bring capital in. IT, IT-enabled services, SaaS, consulting, manufacturing - all automatic up to 100%. Defence, telecom, multi-brand retail, print media - require government approval. Confirm your sector before incorporation.

The 12 things that need to happen

In rough order. Many of these run in parallel, but the dependencies matter.

1. Name reservation via SPICe+ Part A (1-2 days). Two name choices, one must be unique and ideally not too close to your US parent's brand.
2. Digital Signature Certificate (DSC) for every director (1-3 days). Indian directors do this via Aadhaar e-KYC. US directors need a notarised + apostilled passport and address proof.
3. Director Identification Number (DIN) allocated to every director who does not already have one (concurrent with DSC).
4. Memorandum of Association (MoA) + Articles of Association (AoA) drafted around your US parent's specific business objectives and capital structure (2-3 days).
5. SPICe+ Part B filed (1 day). Includes incorporation, PAN, TAN, EPFO, ESIC, professional tax, and the bank account opening request bundled.
6. Certificate of Incorporation issued by MCA (3-5 days from filing). This is your company's birth certificate.
7. GST registration filed (1 day after CoI, approved in 3-5 days).
8. Bank account opened (5-7 days after CoI). We work with HSBC, Citi, ICICI, HDFC and Kotak - choose based on your US parent's existing banking relationship.
9. First capital wired from US parent to Indian subsidiary under Automatic Route. Bank issues FIRC (Foreign Inward Remittance Certificate).
10. Allot shares to the US parent against the capital received (board resolution + Form PAS-3 to MCA).
11. Form FC-GPR filed with RBI within 30 days of share allotment - this is the FEMA reporting step that most first-timers miss.
12. First payroll cycle: Provident Fund, ESIC, professional tax, TDS on salary - all wired and filed within statutory deadlines.

The week-by-week timeline that actually works

Week 1: Foundation

Strategy call to confirm entity, FDI route, director composition, and capital structure. Issue DSCs for all directors. File SPICe+ Part A for name reservation. Get the registered office address locked down with a clean NOC from the owner.

Week 2: Filing

MoA and AoA drafted and signed. SPICe+ Part B filed. Most of the wait this week is MCA processing. While waiting, prepare the bank account opening kit - KYC documents for every director, board resolution for account opening, and the FATCA/CRS declarations the bank will need.

Week 3: Operations setup

Certificate of Incorporation arrives. Immediately file GST registration, open bank account, set up the accounting software (we recommend Zoho Books or NetSuite depending on your scale). Begin drafting payroll structures, employment contracts, and the chart of accounts in both IND-AS and a US GAAP-compatible mapping.

Week 4: Capital and FEMA

US parent wires capital to the Indian bank. Bank issues FIRC. Allot shares to US parent (board resolution + PAS-3). File FC-GPR within 30 days. Run the first internal compliance review to confirm everything is documented. You are now operational.

Where US founders trip up

Resident director

Indian company law requires at least one director who was a resident in India in the previous financial year (182+ days). US-only founder teams cannot legally incorporate without this. We arrange a nominee director or your CFO retainer can include a partner director seat. Plan this before the first form is filed.

FC-GPR within 30 days

FEMA's clock starts the moment shares are allotted to the US parent. Miss the 30-day window and you fall into compounding - the RBI processes a separate compounding application that takes 3-6 months and includes a penalty. Filing on time is free; filing late is expensive and slow.

Transfer pricing from day one

Any service the Indian subsidiary provides to the US parent - and almost every Indian subsidiary will at some point - triggers transfer pricing. A formal TP study with benchmarking and Form 3CEB is due with the income tax return. If you wait until audit to set this up, you are exposed. Set the pricing policy on day one.

GST under LUT for service exports

When your Indian subsidiary invoices the US parent for software, support or shared services, those are exports of services and qualify for zero-rated treatment under Letter of Undertaking (LUT). Without an LUT in place, you pay IGST upfront and chase a refund - typical 90-day delay. File the LUT before the first invoice.

What it costs

Government fees: roughly ₹15,000 to ₹35,000 depending on authorised capital and stamp duty. Bank fees and document apostille for US directors typically add another $300-600. Professional fees: at ADAPT a flat-fee India entry engagement covers the full 12-step setup - request a quote based on your specific structure.

Once operational, expect ₹40,000 to ₹2 lakh per month in ongoing CFO + compliance costs depending on team size and transaction volume. This is the all-in number including statutory audit, transfer pricing audit, and quarterly reporting.

ADAPT runs the full 12-step India entry from Ahmedabad, in US-friendly hours. Strategy call to first invoice in 4 weeks. Send us a 1-line description of what your US company does and we will quote the engagement within 48 hours.