Key Takeaways
- Total setup cost for a foreign subsidiary: ₹1.5–2.5 lakhs ($1,800–3,000) all-in
- Government fees are trivial — professional fees are the real cost
- Ongoing compliance costs ₹25,000–1,00,000/month depending on team size
- Always use a firm that understands cross-border structures — budget services cost more in the long run
One of the first questions I get from international companies exploring India is straightforward: “How much will this cost us?”
The honest answer is: it depends — but not in a vague, hand-wavy way. There are clear cost buckets, and I can give you real numbers. Here’s the full breakdown for 2025.
Government Fees & Incorporation Costs
Setting up a Private Limited Company (the standard structure for foreign subsidiaries) involves several government-mandated fees.
Digital Signature Certificate (DSC)
Every director needs a DSC for signing electronic filings. This costs ₹1,000–2,000 (~$12–25) per director. You’ll need at least two directors, and at least one must be an India-resident director.
Director Identification Number (DIN)
DIN applications are part of the SPICe+ incorporation form now, so there’s no separate fee — it’s bundled into the incorporation filing.
Name Reservation & Incorporation (SPICe+ Form)
The Ministry of Corporate Affairs (MCA) charges based on your authorized share capital:
| Authorized Capital | Government Fee |
|---|---|
| Up to ₹1 lakh | ₹0 (included in SPICe+) |
| ₹1 lakh – ₹5 lakhs | ~₹2,000–5,000 |
| ₹5 lakhs – ₹10 lakhs | ~₹5,000–10,000 |
| ₹10 lakhs – ₹1 crore | ~₹10,000–50,000 |
💡 Tip: Most foreign subsidiaries start with ₹1–10 lakhs authorized capital, so government fees stay under ₹15,000 (~$180).
Stamp Duty
Stamp duty on the Memorandum and Articles of Association varies by state. In most states, expect ₹1,000–5,000 (~$12–60). Some states like Delhi and Karnataka are on the lower end; Maharashtra tends to be higher.
PAN & TAN Registration
PAN (tax ID) and TAN (tax deduction ID) come automatically with SPICe+ now. No additional cost.
Registered Office
You need a registered office address in India from day one. If you don’t have a physical office yet, virtual office or co-working registered address services run ₹5,000–15,000/year (~$60–180/year).
Professional Fees
This is where the real cost sits. Government fees are trivial — professional fees for getting everything done correctly are the bulk.
Incorporation Service
A professional firm handling end-to-end incorporation (SPICe+ filing, MOA/AOA drafting, RBI compliance for foreign investment, opening bank accounts) typically charges:
- ₹50,000–1,50,000 (~$600–1,800) for standard incorporation
- ₹1,50,000–3,00,000 (~$1,800–3,600) if the structure is complex (multiple shareholders, specific share class arrangements, sector-specific approvals)
RBI Compliance for Foreign Investment
When a foreign company invests in an Indian subsidiary, you need to file with the Reserve Bank of India. Key filings:
- FC-GPR (Foreign Currency – Gross Provisional Return): Filed when shares are allotted to the foreign parent
- Annual Return on Foreign Liabilities and Assets (FLA): Filed every July
⭐ Key Point: Most firms include basic RBI compliance in their incorporation package. If billed separately, expect ₹15,000–30,000 (~$180–360).
Bank Account Opening
Opening a current account for a foreign-owned subsidiary can be surprisingly painful. Banks have enhanced due diligence for foreign-owned entities. Budget 2–6 weeks and potentially ₹5,000–15,000 in professional assistance if your firm doesn’t include this.
Total Setup Cost: The Real Numbers
Here’s what it actually costs end-to-end:
| Cost Component | Budget Range (₹) | Budget Range ($) |
|---|---|---|
| Government fees (MCA, stamp duty) | ₹5,000–20,000 | $60–240 |
| Digital signatures | ₹2,000–4,000 | $25–50 |
| Professional fees (incorporation) | ₹75,000–2,00,000 | $900–2,400 |
| RBI compliance filings | ₹15,000–30,000 | $180–360 |
| Registered office (first year) | ₹5,000–15,000 | $60–180 |
| Bank account assistance | ₹5,000–15,000 | $60–180 |
| Total | ₹1,07,000–2,84,000 | $1,300–3,400 |
⭐ Key Point: For most companies, the sweet spot is ₹1.5–2.5 lakhs ($1,800–3,000) all-in for a clean, standard incorporation.
Ongoing Annual Compliance Costs
Setting up the company is step one. Keeping it compliant is the ongoing commitment.
Mandatory Annual Filings
- Annual Return (MGT-7): Filed with MCA every year
- Financial Statements (AOC-4): Audited balance sheet filed with MCA
- Income Tax Return: Due by October 31 (for companies requiring audit)
- GST Returns: Monthly or quarterly depending on turnover
- TDS Returns: Quarterly filings for tax deducted at source
- RBI Annual Return (FLA): If foreign-owned
Monthly Compliance (Once You Have Employees)
- Provident Fund (PF) contributions and filings
- Employee State Insurance (ESI) if applicable
- Professional Tax (varies by state)
- TDS deposits by the 7th of each month
Accounting & Compliance Cost
For ongoing accounting, tax compliance, and statutory filings, budget:
| Team Size | Monthly Compliance Cost |
|---|---|
| No employees (dormant/holding) | ₹15,000–25,000/month ($180–300) |
| 1–10 employees | ₹25,000–50,000/month ($300–600) |
| 10–50 employees | ₹50,000–1,00,000/month ($600–1,200) |
| 50+ employees | ₹1,00,000+/month ($1,200+) |
Statutory Audit
Every Indian company must be audited annually, regardless of size. Audit fees range from ₹30,000–1,00,000/year ($360–1,200) for small subsidiaries.
DIY vs. Using a Professional Firm
| Factor | DIY / Online Platforms | Professional Firm |
|---|---|---|
| Cost | ₹15,000–40,000 | ₹75,000–2,50,000 |
| Timeline | 3–8 weeks | 2–4 weeks |
| RBI compliance | Usually not included | Included |
| Bank account help | No | Yes |
| Post-incorporation setup | No | Yes (PF, ESI, GST, PT registration) |
| Ongoing advisory | No | Yes |
| Risk of errors | Higher | Lower |
| Best for | Simple domestic companies | Foreign subsidiaries |
💡 Tip: Foreign companies trying to save money with budget online incorporation services often end up spending more — fixing RBI non-compliance, re-doing bank account applications, or dealing with filings done incorrectly.
✅ Recommendation: For a foreign subsidiary, always use a firm that understands cross-border structures. The incremental cost is small compared to the cost of getting it wrong.
Hidden Costs Most People Miss
A few things that catch companies off guard:
-
India-resident director requirement — You need at least one director who has stayed in India for 182+ days. If you don’t have one, you’ll need to appoint someone, which can mean additional costs or arrangements.
-
Transfer pricing documentation — If your Indian subsidiary transacts with the parent company (which it almost certainly will), you need transfer pricing documentation. This can cost ₹50,000–2,00,000/year depending on complexity.
-
GST registration — If you’re providing services (likely), you need GST registration. The registration itself is free, but compliance adds to your monthly accounting costs.
-
Advance tax — India requires quarterly advance tax payments. Miss them, and you pay interest. Your advisor should calendar these for you.
Timeline: What to Expect
| Step | Timeline |
|---|---|
| Documentation & preparation | 1–2 weeks |
| MCA incorporation (SPICe+) | 1–2 weeks |
| PAN/TAN issuance | Automatic with SPICe+ |
| Bank account opening | 2–6 weeks |
| RBI filings (FC-GPR) | 1–2 weeks after share allotment |
| PF/ESI/GST registrations | 1–2 weeks |
| Total: Ready to operate | 6–12 weeks |
FAQ
How long does it take to set up a company in India?
From start to fully operational (incorporated, bank account open, all registrations done), expect 6–12 weeks. The incorporation itself takes 1–2 weeks, but bank account opening for foreign-owned companies often takes the longest.
Can a foreign company own 100% of an Indian subsidiary?
Yes, in most sectors. India allows 100% foreign direct investment (FDI) under the automatic route for most business activities including IT, consulting, and professional services. A few sectors (like insurance, telecom, defense) have caps or require government approval.
What’s the minimum capital required to set up an Indian subsidiary?
There’s no minimum capital requirement for a Private Limited Company. You can start with ₹1 lakh ($1,200) authorized capital. However, you should capitalize the company with enough to cover initial setup and operating costs — I typically recommend at least ₹10–25 lakhs ($12,000–30,000) to start.
Do I need to visit India to set up the company?
No. The entire incorporation process can be done remotely with digital signatures and notarized/apostilled documents. However, opening a bank account may require the directors to visit a branch — some banks have relaxed this with video KYC, but it varies.
Setting up a company in India is more affordable than most people expect. The real investment is in ongoing compliance — get that right from day one, and you’ll save yourself significant headaches down the road.
If you’re evaluating India entry and want a realistic cost estimate for your specific situation, let’s talk. I’ll give you a clear picture of what to expect.