Foreign Subsidiary Registration India — FDI, FEMA: Documents and Evidence
Most delay on Foreign Subsidiary Registration India — FDI, FEMA comes down to paperwork that was not ready, so it is worth knowing what will be asked for. The questions below are the ones raised most often in practice; the full scope of the service is on the Foreign Subsidiary Registration India — FDI, FEMA page.
What is the valuation requirement for FDI — can I issue shares at face value?
Shares issued to a foreign investor must be priced at not less than the fair market value determined by a SEBI-registered Category I Merchant Banker or a Chartered Accountant using a recognised valuation methodology — typically DCF (Discounted Cash Flow) for an operating business or NAV (Net Asset Value) for a newly incorporated entity or a holding company. The critical requirement is that the certificate must be obtained before allotment — not prepared retroactively. For a company with operating history, issuing shares below FMV to a foreign investor is a FEMA violation.
In practice: A missing valuation that later has to be obtained retroactively is a documentation gap to watch for when early FDI is self-managed.
What is Form FC-TRS — when is it required?
Form FC-TRS (Foreign Currency — Transfer of Shares) is an RBI reporting obligation that arises on the transfer of shares of an Indian company between a resident and a non-resident, or between two non-residents. It is filed via the AD bank on the FIRMS portal within 60 days of the date of transfer. , the foreign investor is buying from an Indian seller), the price must not be below FMV. For a transfer from a non-resident to a resident (foreign investor selling to an Indian buyer), the price must not be above FMV. A valuation certificate is required for the transfer. Form FC-TRS is separate from Share Transfer Form SH-4 under the Companies Act.
In practice: FC-TRS is required on every such transfer — not just the first one. A secondary sale of shares by a foreign investor to another party, a buyback by the company, and a transfer by a foreign co-founder to a new investor all trigger FC-TRS. Every share movement involving a foreign party should be tracked, and the FC-TRS process initiated immediately upon transfer execution.
What is an apostille — and which countries require it for company documents?
An apostille is a form of authentication issued by the competent authority of a country that is a member of the 1961 Hague Apostille Convention, certifying that a public document (such as a Certificate of Incorporation) is genuine. For countries that are Hague Convention members (including the US, UK, Germany, Netherlands, Singapore, and most EU countries), an apostille suffices for acceptance in India. For documents from countries that are not Hague Convention members (historically some countries in the Middle East and certain parts of Asia — and the UAE's current status should be confirmed on the HCCH status table), notarisation by a local notary followed by attestation by the Indian Embassy in that country is the alternative path. MCA and RBI both require apostilled or properly attested foreign corporate documents.
In practice: Whether an apostille or full consular legalisation is required for UAE-India corporate documents depends on the current Hague Convention status between the two countries, which we confirm before documents are prepared. The issuing authority can also differ between UAE emirates, and we guide clients through the correct authority for their emirate to avoid rejected documents.
What is the minimum number of directors required for an Indian subsidiary — can all be foreign nationals?
An Indian Private Limited Company requires a minimum of 2 directors. There is no maximum for a private company. At least one director must satisfy the resident director requirement under Section 149(3) — physically present in India for at least 182 days in the previous calendar year. There is no restriction on foreign nationals or NRIs serving as directors beyond the residency requirement — a company can have all foreign directors plus one qualifying Indian resident director. Foreign nationals who are directors must obtain a DIN (Director Identification Number) from MCA, which requires submitting apostilled passport and address proof.
In practice: The 182-day residency requirement is calculated based on physical presence in India, not tax residency. A person who is an Indian citizen but has been abroad for more than 183 days in the previous calendar year does not qualify as the resident director. This is a factual determination made annually — the composition of the board must be checked each financial year.
How long does the entire foreign subsidiary setup take — from first call to fully operational?
The end-to-end timeline from first consultation to a fully operational Indian subsidiary with all FDI compliance complete and operations underway depends on MCA processing, bank KYC and the case; confirm current processing times. The key stages in sequence are: FDI advisory and structure design; name clearance and document preparation; SPICe+ filing and MCA processing; bank account opening (often the longest single step due to AD bank KYC); inward SWIFT remittance; valuation certificate and share allotment (the certificate must be obtained before allotment); FC-GPR filing and FIRMS processing; post-incorporation registrations — GST, TDS, PF/ESI. Commencement of Business Declaration (INC-20A) is due within 180 days — PNPC initiates it at Day 90 to ensure compliance.
In practice: The most frequent delay is bank account opening — AD bank KYC for a foreign-shareholder company is more involved than for a domestic company. We coordinate bank KYC from Week 1 in parallel with the incorporation, not as a sequential step after COI, to compress the overall timeline.
How much does PNPC charge for incorporating a foreign subsidiary and managing FEMA compliance?
PNPC charges a fixed fee agreed in writing before any work begins. The fee covers the full scope of services: FDI route advisory, Press Note 3 screening, incorporation under Companies Act (SPICe+, custom MoA/AoA), AD bank coordination for inward remittance, valuation certificate coordination, share allotment, FC-GPR filing, post-incorporation setup (INC-20A, ADT-1, GST, TDS), and the first-year FEMA compliance calendar. Additional costs include government fees (minimal), stamp duties, apostille fees (paid to the relevant authority in the investor's home country), and (if applicable) separate valuation fees for complex valuation assignments. Annual retainer fees for ongoing compliance — FLA, MCA filings, transfer pricing, GST, income tax — are agreed separately. We provide a detailed written scope and fee letter before engagement — we do not start work without one.
In practice: Ask any adviser you consider to confirm in writing: does the quoted fee include FC-GPR, FLA return, the valuation certificate, and coordination with the AD bank? Confirm each item individually, as these may be charged separately or not offered at all. The cost of an FC-GPR compounding is far higher than the cost of getting it right at the start.
Where this sits in the wider engagement
Foreign Subsidiary Registration India — FDI, FEMA rarely arrives on its own. The statutory basis and the current requirements are set out on the Foreign Subsidiary Registration India — FDI, FEMA service page, and the related services are grouped under Business Setup.
What PNPC does
PNPC Global has practised since 1986 across India and the UAE. On Foreign Subsidiary Registration India — FDI, FEMA we take the work end to end — reviewing the facts, preparing and filing what is required, and dealing with the authority through to closure.