Post Incorporation Compliance for Foreign Subsidiary in India

Incorporating an Indian company is only the first stage of establishing a business presence in India. After obtaining the Certificate of Incorporation, a foreign-owned subsidiary must complete several time-sensitive corporate, banking, foreign investment, taxation and operational requirements.

Post incorporation compliance for a foreign subsidiary in India includes holding the first Board meeting, appointing the statutory auditor, receiving subscription money, completing commencement-of-business requirements, issuing or facilitating evidence of shares, reporting foreign investment and obtaining applicable business registrations.

These requirements are particularly important for wholly owned subsidiaries established by overseas parent companies. Failure to complete the relevant filings can result in penalties, regulatory difficulties and delays in commencing operations or receiving further investment.

EzyBiz India Consulting LLP provides integrated India Market Entry Consulting Services, including subsidiary incorporation, FEMA and RBI reporting, ROC compliance, corporate taxation, accounting, payroll and ongoing regulatory advisory.

This guide concentrates on the first 180 days after incorporation. For recurring ROC, income-tax, GST, FEMA, transfer-pricing and other annual obligations, read our separate Foreign Subsidiary Compliance in India guide.

1. Post Incorporation Compliance Checklist for Foreign Subsidiaries

What Must Be Completed After Incorporation?

A newly incorporated foreign-owned Indian subsidiary should establish a compliance plan covering the following activities:

• Verify incorporation documents, PAN and TAN;
• hold the first Board meeting;
• appoint the first statutory auditor;
• open the Indian corporate bank account;
• receive share subscription money through permitted channels;
• file Form INC-20A where applicable;
• complete share certificate or dematerialisation requirements;
• undertake applicable FEMA reporting, including FC-GPR;
• maintain statutory registers and beneficial ownership records;
• assess GST, IEC and employment registrations;
• establish accounting and tax compliance processes; and
• prepare an annual statutory compliance calendar.

Important Deadlines During the First 180 Days

Each timeline should be calculated using the actual incorporation date, capital transactions and applicable legal provisions. The table is a planning checklist rather than a substitute for an event-specific compliance review.

How Foreign Parent Companies Should Organise Compliance

The overseas parent should designate responsible persons for corporate secretarial work, banking, foreign investment reporting, accounting, taxation and operational approvals.

An Indian director, finance manager or authorised representative should coordinate local execution. The foreign parent should monitor deadlines and receive copies of important acknowledgements and statutory records.

2. First Board Meeting and Statutory Auditor Appointment

First Board Meeting Within 30 Days

Under Section 173 of the Companies Act, 2013, an Indian company is generally required to hold its first Board meeting within 30 days from incorporation.

The first Board meeting ordinarily addresses:

• Noting the Certificate of Incorporation and constitutional documents;
• disclosure of directors’ interests;
• appointment of the first statutory auditor;
• opening and operation of bank accounts;
• authorisation of bank signatories;
• administration of subscriber shares and share certificates;
• statutory registers and company records; and
• initial regulatory and operational matters.

Appointment of First Statutory Auditor

Section 139(6) of the Companies Act generally requires the Board to appoint the company’s first statutory auditor within 30 days of incorporation.

Where the Board fails to appoint the auditor, the matter must be addressed through the prescribed member-appointment procedure.

The first auditor ordinarily holds office until the conclusion of the first Annual General Meeting.

The requirement applies even where the Indian subsidiary has not started generating revenue.

Auditor Consent, Eligibility and Appointment Records

The company should obtain the auditor’s written consent and eligibility confirmation, maintain the relevant Board resolution and review the applicable appointment-filing requirements.

The ADT-1 filing position for the first auditor should be assessed under the rules and MCA procedures applicable to the appointment, rather than assuming that every appointment follows the same filing process as a subsequent AGM appointment.

Statutory-audit planning should begin early so the company establishes appropriate accounting records from its first transaction.

3. Bank Account, Subscription Capital and Commencement of Business

Opening a Corporate Bank Account in India

Following incorporation, the Indian subsidiary should open a corporate bank account with an authorised Indian bank.

The bank may require:

• Certificate of Incorporation;
• PAN and company constitutional documents;
• Board resolution approving bank signatories;
• director and signatory KYC;
• foreign shareholder corporate records;
• ownership and beneficial ownership information;
• registered-office evidence; and
• business activity and source-of-funds information.

Bank account activation remains subject to the bank’s KYC and verification procedures.

Receipt of Subscription Money from Foreign Shareholders

The foreign shareholder must arrange payment of the subscribed share capital through permitted banking channels in compliance with the applicable FEMA regulations.

The company should preserve bank statements, remittance details, investor KYC records and evidence identifying the shareholder from whom the funds were received.

Subscription capital should be correctly reconciled with the Memorandum of Association and the company’s statutory ownership records.

Filing Form INC-20A Within 180 Days

Section 10A of the Companies Act generally requires a company incorporated with share capital to file a declaration for commencement of business in Form INC-20A within 180 days of incorporation, subject to applicable statutory provisions.

The subscribers must have paid the value of the shares agreed to be taken by them, and the company must satisfy the relevant filing requirements.

A company to which Section 10A applies must not commence business or exercise borrowing powers before completing the prescribed commencement requirements.

Non-compliance may attract statutory penalties and other consequences.

Official forms and instructions can be accessed through the Ministry of Corporate Affairs.

4. Share Certificates, Beneficial Ownership and Dematerialisation

Issue of Share Certificates to Memorandum Subscribers

Section 56(4) of the Companies Act generally provides for delivery of share certificates to subscribers to the Memorandum within two months from incorporation, subject to the applicable legal provisions concerning dematerialised securities.

The company should distinguish the shares subscribed at incorporation from subsequent fresh allotments.

The statutory treatment and filing requirements for a later issue of shares may differ from those applicable to shares initially subscribed through the incorporation documents.

Stamp Duty and Statutory Shareholder Records

Applicable stamp duty must be considered under the relevant Indian stamp-duty framework.

The company should maintain accurate records of its share capital, subscribers, beneficial owners, shareholder declarations and relevant corporate approvals.

Where nominee shareholders hold shares on behalf of the foreign parent, the appropriate beneficial-interest declarations and regulatory filings should be examined.

Dematerialisation, ISIN and Form PAS-6

Foreign-owned private limited companies should examine whether Rule 9B of the Companies (Prospectus and Allotment of Securities) Rules applies to their securities.

Where applicable, the company may need to obtain an ISIN, facilitate dematerialisation and complete relevant securities-related requirements.

Form PAS-6 and the applicable half-yearly reconciliation obligations should be assessed according to the company’s legal classification, exemption status and current rules.

A foreign subsidiary should not automatically assume that small-company exemptions are available solely because its turnover or paid-up capital is low.

5. FEMA and RBI Compliance After Incorporation

FDI Eligibility, Entry Route and Investment Conditions

The foreign parent should confirm that its proposed Indian activities comply with applicable FDI sectoral conditions, foreign ownership limits, investment routes and investor-related requirements.

Many sectors permit 100% foreign investment under the automatic route, but this is not universal.

Relevant information is available through the Department for Promotion of Industry and Internal Trade.

Filing Form FC-GPR Through RBI FIRMS

Where an Indian company issues equity instruments qualifying as foreign direct investment, Form FC-GPR is generally required within 30 days from the date of issue of the instruments.

Reporting may involve prescribed corporate information, remittance particulars, authorised dealer bank documentation, investor KYC and applicable pricing or certification requirements.

The company should register the relevant users and complete the required reporting procedures through the RBI FIRMS framework.

EzyBiz provides FEMA and RBI Advisory Services to foreign-owned Indian companies.

Annual FLA Return and Subsequent Foreign Investment

Where applicable, the Indian subsidiary must submit the annual Foreign Liabilities and Assets return to RBI, generally by 15 July following the relevant reporting year.

Subsequent capital transactions, share transfers, downstream investment and foreign financing may create additional reporting obligations, including FC-TRS or other relevant forms.

Official regulatory information is available from the Reserve Bank of India.

6. Banking Documentation and Foreign Investment Reconciliation

Authorised Dealer Bank Coordination

The Indian subsidiary should coordinate foreign investment transactions with its Authorised Dealer bank.

Banking records should identify the remitting shareholder, amount, date, purpose and relevant foreign currency particulars.

Any discrepancy between the foreign parent, subscriber records and actual remittance information should be resolved before regulatory reporting.

Reconciliation of Share Capital and Financial Records

The finance team should reconcile the issued capital, subscribed capital, paid-up capital and shareholder ledger with the company’s bank records and statutory registers.

Corporate records and regulatory filings should present a consistent ownership and funding position.

Planning Future Capital Infusions

Foreign parents should prepare an initial funding plan based on expected payroll, rent, professional services, technology expenses, working capital and anticipated operating losses.

Additional capital issues and inter-company loans are separate transactions that require their own regulatory, corporate and tax analysis.

7. GST, IEC and Business Registrations After Incorporation

GST Registration and Taxable Activities

GST registration is not automatically compulsory merely because the Indian company is foreign-owned.

Applicability depends on the nature of supplies, turnover, place of supply and other relevant statutory conditions.

Where registration is required, the company should implement appropriate tax invoicing, return-filing and input tax credit procedures.

Our GST Registration Services support new companies establishing taxable operations in India.

Importer Exporter Code and DGFT Requirements

A newly incorporated subsidiary intending to import or export goods should determine the applicability of Importer Exporter Code requirements.

IEC applicability to services should be examined with reference to the specific activity and relevant DGFT provisions.

Official information is available through the Directorate General of Foreign Trade.

State and Sector-Specific Business Licences

Other registrations may depend on the location, business activity and employees.

Examples include Shops and Establishments registration, Professional Tax, factory licences, environmental permissions and sector-specific approvals.

Manufacturing businesses should evaluate these requirements before commissioning facilities or commencing regulated activities.

8. Income Tax, TDS and Payroll Setup

PAN, TAN and Initial Accounting Setup

After incorporation, the company should verify its PAN, TAN, bank details and applicable statutory registrations.

The finance team should establish a chart of accounts, accounting policies, document retention procedures, payment controls and tax-compliance responsibilities.

Our Accounting Setup for New Companies in India guide provides additional implementation guidance.

Domestic TDS and Non-Resident Payments

The Indian subsidiary may need to deduct tax at source on specified payments, including salaries, rent, professional services, contractor payments, interest and applicable payments to non-residents.

International payments require separate evaluation of Indian taxability, applicable treaty provisions and any required Form 15CA or Form 15CB compliance.

Our International Tax Advisory Services support these cross-border matters.

Payroll, Provident Fund and Employment Compliance

Where the subsidiary recruits employees, it should establish payroll processes and determine applicable provident fund, employee state insurance, professional tax and other employment requirements.

Foreign expatriates and seconded employees may require additional review of immigration, Indian taxation and applicable social security agreements.

Payroll compliance should be designed before the first salary cycle rather than after employee payments have commenced.

9. Inter-Company Agreements and Transfer Pricing

Management, Technical and Service Agreements

Foreign-owned subsidiaries frequently receive services or other support from their overseas parent companies.

These arrangements may cover management services, software access, technology licensing, engineering, procurement, finance support and other commercial functions.

Appropriate agreements should clearly explain the nature of the services, parties’ responsibilities, pricing and supporting documentation.

Transfer Pricing and International Transaction Reporting

Transactions between an Indian subsidiary and foreign associated enterprises may be subject to India’s transfer-pricing requirements.

The company should evaluate arm’s-length pricing, supporting documentation, withholding tax and applicable reporting obligations before commencing regular inter-company transactions.

Explore our Transfer Pricing Advisory Services.

10. Statutory Registers and Financial Controls

Corporate Records and Company Secretarial Setup

After incorporation, the company should maintain applicable statutory registers, shareholder information, directors’ records, minutes books and other relevant documents.

The registered office should maintain or make available the prescribed statutory records as required by Indian company law.

Accounting, Bank Reconciliation and MIS

The subsidiary should establish appropriate accounting records, regular bank reconciliations, vendor and customer ledgers, expenditure approval limits and management reporting.

The foreign parent may require monthly reporting or group accounting adjustments in addition to the Indian statutory accounting requirements.

Our Accounting and Bookkeeping Services support foreign-owned businesses.

11. Conditional Compliance for Foreign-Owned Private Companies

Beneficial Ownership and Nominee Shareholding

Where a foreign parent uses nominee shareholding or has a multilayered ownership structure, the company should review the relevant registered and beneficial ownership declarations.

Forms and procedures may include applicable declarations under Sections 89 and 90 of the Companies Act, depending on the shareholding facts.

Additional Capital, PAS-3 and Other ROC Filings

Subsequent fresh allotments may require Form PAS-3 and other relevant corporate procedures, depending on the allotment structure.

Director appointments, registered-office changes, capital alterations and other corporate events may require separate MCA filings.

Applicable filing requirements should be determined for each event rather than treating all post-incorporation transactions alike.

12. First 180 Days Compliance Implementation Plan

Illustrative 180-Day Implementation Roadmap

Statutory deadlines run from their specified legal triggers and are not extended by the planning periods in this table. For example, INC-20A must not be delayed beyond its prescribed deadline merely because operational activities have not started.

Responsible Persons and Supporting Documents

For each compliance item, management should identify the responsible person, statutory deadline, required documents, filing authority and acknowledgement.

A central compliance tracker should record completion status and outstanding issues.

13. Common Post Incorporation Compliance Mistakes

Delays in Capital Receipt and Commencement Filing

A common problem is incorporating the company without coordinating bank onboarding and receipt of subscription money.

This can affect the company’s ability to complete the commencement-of-business filing and related share capital documentation on time.

Incorrect FEMA Reporting and Inconsistent Records

Incorrect remittance information, mismatches in shareholder records, incomplete bank KYC or errors in the reported share issue can create reporting difficulties.

The Indian subsidiary should reconcile all supporting records before submission and preserve the acknowledgement and related correspondence.

14. Transition from Initial to Annual Compliance

Statutory Audit, Financial Statements and Annual ROC Forms

After the initial post-incorporation period, the company moves into its recurring annual compliance cycle.

This generally includes statutory audit, financial statements, Board and shareholder meetings, annual ROC filings and applicable income-tax reporting.

Foreign parent-controlled subsidiaries should separately evaluate eligibility for exemptions and company classifications, rather than assuming that a low-turnover subsidiary automatically qualifies as a small company.

Annual FEMA, Tax and Regulatory Reporting

The ongoing compliance calendar may include annual FLA reporting, corporate tax, transfer pricing, GST, TDS, payroll and event-specific corporate filings.

For the detailed annual calendar, visit our Foreign Subsidiary Compliance in India guide.

15. Frequently Asked Questions

Is FC-GPR Required Immediately After Incorporation?

FC-GPR generally applies when the Indian company issues equity instruments qualifying as FDI. The usual reporting deadline is 30 days from the issue of those instruments.

The company should distinguish the initial subscription under the Memorandum from subsequent allotments and confirm the proper reporting particulars with its authorised dealer bank.

Are GST Registration and IEC Compulsory for Every Subsidiary?

No. Their applicability depends on the company’s actual business activities, transactions and statutory conditions.

A newly incorporated foreign-owned company that has not commenced taxable supplies or import-export transactions should assess the relevant legal triggers rather than automatically applying for every registration.

16. EzyBiz Post Incorporation Compliance Services

End-to-End Support for Foreign-Owned Subsidiaries

EzyBiz India Consulting LLP assists overseas businesses with post-incorporation and ongoing statutory compliance.

Our services include:

• First Board meeting and corporate documentation support;
• first auditor appointment coordination;
• bank account onboarding assistance;
• foreign share subscription and capital documentation;
• INC-20A compliance;
• share certificates and dematerialisation advisory;
• FC-GPR and related FEMA reporting;
• FLA and other applicable RBI filings;
• GST and import-export registration assistance;
• accounting and financial controls setup;
• corporate taxation and withholding compliance;
• transfer pricing and inter-company transaction support;
• payroll and employee compliance; and
• ongoing ROC and annual regulatory compliance.

Our team includes Chartered Accountants, Company Secretaries and associated professionals, including professionals with Big Four experience.

Contact Our India Market Entry and Compliance Team

Whether your overseas company has recently incorporated an Indian subsidiary or is planning its first capital infusion, EzyBiz can assist with establishing an appropriate post-incorporation compliance framework.

Mobile: +91 98992 17778

Email: anil@ezybizindia.in

WhatsApp: Speak with Our India Compliance Team

Related Services

• India Market Entry Consulting Services
• Wholly Owned Subsidiary Registration in India
• Foreign Subsidiary Annual Compliance
• Foreign Company Registration in India
• Company Registration Services
• Setting Up Business in India
• FEMA and RBI Advisory Services
• Corporate Structure and Management Control
• Accounting Setup for New Companies
• Accounting and Bookkeeping Services
• GST Registration Services
• International Tax Advisory
• Transfer Pricing Advisory Services
• GST and Indirect Tax Advisory
• Joint Venture Registration

Official Regulatory References

• Ministry of Corporate Affairs
• Reserve Bank of India
• Department for Promotion of Industry and Internal Trade
• Directorate General of Foreign Trade
• GST Portal
• Income Tax Department

Reviewed By: CA Anil Agrawal, Founder, EzyBiz India Consulting LLP. Over 20 years of professional experience in India market entry, company registration, FEMA, taxation, transfer pricing and cross-border regulatory advisory.

Last Updated: November 2026

Disclaimer: This article provides general information and does not constitute legal, tax, FEMA, corporate or regulatory advice. Post-incorporation requirements depend on the company’s legal classification, shareholders, sector, investment transactions, directors, business activities and applicable statutory conditions. Deadlines and filing obligations should be verified under the current Companies Act, FEMA regulations, RBI reporting instructions, GST law, income-tax provisions and other applicable rules. Share certificate, dematerialisation and foreign investment reporting obligations require transaction-specific review. Professional advice should be obtained before submitting statutory filings or commencing regulated business activities.