Foreign Subsidiary in India — Post-Registration Compliance Guide
Establishing a foreign subsidiary in India is just the beginning of your operational journey. To maintain good standing with Indian authorities and avoid penalties under FEMA or GST laws, you must adhere to strict post-registration compliance protocols. This guide outlines the critical timelines for filing annual returns, maintaining statutory registers, and managing currency repatriation procedures required by the Reserve Bank of India (RBI) in 2026. Our team at PNPC Global ensures that your entity remains compliant from day one, handling complex filings with the Ministry of Corporate Affairs (MCA), GST Network (GSTN), and RBI. By understanding these obligations early, you can focus on market expansion rather than navigating regulatory red tape or facing costly fines for non-compliance. We manage the complexities of local statutory requirements while allowing your international headquarters to maintain full control over strategic decisions. Whether dealing with a Wholly Owned Subsidiary (WOS) or a Joint Venture structure, our compliance framework ensures you meet all Indian legal standards without disrupting your core business strategy.
Before you start
- Valid Certificate of Incorporation issued by the Registrar of Companies (ROC)
- PAN and TAN certificates for the new entity
- GST Registration certificate with valid UIN
- Bank Account opening confirmation from a scheduled commercial bank in India
Step-by-step
File Annual Return within 60 Days of Financial Year End
You must file Form AOC-4 with the MCA portal containing audited financial statements and balance sheets. This deadline is strictly enforced, and late filing attracts a penalty that increases by ₹50 for every day it remains outstanding after the due date.
Submit DIR-12 Form within 30 Days of Changes
Any change in registered office address or alteration to subscriber details must be reported via FORM DIR-12. Failure to update these records on time can lead to the company being struck off from the register, halting all business operations.
File Quarterly GST Returns (GSTR-3B)
Submit GSTR-3B within 20 days of the end of each tax month. This involves declaring outward supplies and inward purchases to ensure your Input Tax Credit claims are valid against output liability.
Maintain FEMA Foreign Exchange Records
Keep detailed records of all foreign remittances, capital imports/exports, and royalty payments. These documents must be retained for at least eight years to substantiate transactions during any RBI or ED (Enforcement Directorate) audit.
Conduct Annual General Meeting (AGM)
Hold the AGM within six months from the close of your financial year. Minutes must be recorded and filed via Form MGT-14 on the MCA portal to ensure transparency in corporate governance.
File Income Tax Returns (ITR)
The company secretary or authorized signatory must file ITR-6 by July 30th of every financial year. Late filing attracts a penalty under Section 271(1)(a) and may attract interest on unpaid taxes.
Renew GST Registration if Turnover Drops
If your annual turnover falls below the threshold limit, you must cancel or modify your registration. Conversely, ensure renewal of any specific category registrations like E-way bill generation permissions before their expiry dates.
Common mistakes to avoid
- Failing to file Form AOC-4 within six months leads to a default status and potential blacklisting.
- Not maintaining separate books for foreign currency transactions violates FEMA regulations.
- Ignoring the deadline for filing DIR-12 results in discrepancies between MCA records and actual company details.
Frequently asked questions
What happens if I miss the annual return deadline?
Late filing attracts a penalty of ₹50 per day plus interest on unpaid taxes. Persistent non-compliance can lead to prosecution under Section 447 of the Companies Act.
Can I repatriate profits without RBI approval in 226?
Yes, provided you have filed Form FC-GPR-1 and submitted audited financials. Profits can be remitted freely if all statutory dues like GST and Income Tax are cleared.
Is a local director mandatory for foreign subsidiaries?
Yes, under the Companies Act 2013 (as amended), every company must have at least one resident Indian as a Director to ensure regulatory oversight.
Prefer we handle Foreign Subsidiary Incorporation in India?
Our team in India & UAE completes every step above for clients daily — accurately and on time.