Siya Madhu

For foreign companies entering the Indian market, GST registration is an important part of establishing a compliant operating structure. The requirement, however, depends on how the foreign business intends to operate in India, whether through an Indian subsidiary, branch or other presence, as a non-resident taxable person, or by supplying certain digital services from outside India. A key consideration for foreign companies establishing an Indian entity is the Permanent Account Number (PAN). PAN is generally required before an Indian entity can proceed with the standard GST registration process. This means that a foreign company planning to establish an Indian subsidiary will typically need to complete the incorporation and PAN process before applying for GST registration. This makes GST registration an important part of the broader India market-entry process rather than a standalone tax registration. Does a foreign company need GST registration in India? GST registration in India is not mandatory for every business solely because it operates in India. The requirement depends primarily on the nature of the business, the type of supplies being made, turnover and the specific provisions applicable to the taxpayer. For domestic businesses, GST registration is generally linked to prescribed turnover thresholds, subject to specified exceptions. However, certain categories are required to register irrespective of turnover. For foreign businesses, GST registration requirements depend on the nature of their supplies, place of supply, and operating model in India. While certain foreign businesses supplying goods or services in India may be required to obtain GST registration, others may be subject to alternative compliance mechanisms, including the reverse charge mechanism applicable to eligible imports of services. Non-resident taxable persons making taxable supplies in India are generally subject to compulsory GST registration under the applicable provisions of the CGST Act. The appropriate GST registration route should therefore be assessed alongside the proposed business structure, place of supply, nature of activities and tax position in India. GST Registration for Domestic Companies: Turnover Threshold For most businesses operating within India, GST registration is governed primarily by an annual aggregate turnover threshold. Under the current rules, a business supplying goods must register once its turnover crosses ₹40 lakh, while a business supplying services must register once it crosses ₹20 lakh, in most states. Certain special category states apply lower thresholds. Below these limits, registration is generally optional, meaning a small business can choose to remain unregistered unless it falls into one of the mandatory categories described below. Turnover is calculated on an aggregate, all-India basis under a single PAN, rather than on a state-by-state basis. A business with operations spread across multiple states must therefore combine its turnover across all such states when determining whether the threshold has been crossed. For foreign companies, however, the turnover threshold should not be considered in isolation. Certain categories of foreign businesses are required to register irrespective of the value of their supplies. Categories Where GST Registration Is Mandatory Regardless of Turnover Even businesses well below the turnover threshold are required to register under GST if they fall into any of the following categories: E-commerce operators and sellers transacting through e-commerce platforms Casual taxable persons undertaking occasional transactions in India Non-resident taxable persons (NRTPs) supplying goods or services in India Businesses required to deduct or collect tax at source under GST Persons making inter-state taxable supplies Agents supplying goods or services on behalf of another registered person Persons liable to pay tax under the reverse charge mechanism Suppliers of online information and database access or retrieval (OIDAR) services from outside India to unregistered recipients in India For these categories, the ₹40 lakh and ₹20 lakh thresholds do not apply, and registration may be compulsory from the outset. Why PAN Is Important for GST Registration For a foreign company planning to establish an Indian subsidiary, obtaining PAN is an important step before GST registration. The sequence generally works as follows: Foreign parent company → Indian entity incorporation → PAN/TAN → GST registration → commencement of relevant business operations and ongoing compliance The Indian company’s PAN is used as part of the GST registration process. Under the GST registration rules, applicants generally declare their PAN when applying through Form GST REG-01, and the PAN is validated against the income-tax database This means that a foreign company cannot simply treat GST registration as the first step in setting up an Indian subsidiary. The underlying Indian entity and its tax registrations need to be established in the appropriate sequence. This is particularly relevant for larger foreign businesses that intend to establish a long-term operating presence in India. Does a Foreign Company Need PAN for GST Registration? Not necessarily. The requirement depends on which GST registration route applies to the foreign business. A foreign company establishing an Indian subsidiary will generally obtain PAN for the Indian company and then proceed with regular GST registration. A foreign business that qualifies as a Non-Resident Taxable Person (NRTP) follows a separate registration process. Under the GST rules, an NRTP applies using Form GST REG-09 and must have an authorised signatory who is resident in India and has a valid PAN. Foreign digital businesses supplying Online Information and Database Access or Retrieval (OIDAR) services from outside India to non-taxable online recipients in India are subject to a specific GST registration and compliance mechanism under Section 14 of the IGST Act, 2017 and Rule 14 of the CGST Rules, 2017. Such suppliers are generally required to register under the simplified registration framework and discharge IGST on the applicable supplies. Therefore, the PAN requirement should be assessed together with the nature of the foreign company’s presence and the applicable GST registration category. GST registration requirement for foreign company The requirements applicable to foreign businesses differ from those applicable to domestic entities. The applicable route depends on the nature of the foreign entity’s presence in India. GST Registration Requirement for Foreign Companies With an Indian Subsidiary A foreign company may establish an Indian subsidiary or operate through another permitted form of presence, depending on its business model and … Read more

Setting up a wholly owned subsidiary in India means working through seven steps in order starting with a Digital Signature Certificate and finishing with the FC-GPR filing to the Reserve Bank of India. All told, you’re looking at between USD 7,500 and USD 20,000 when using a local service provider, not counting initial capitalisation (India Company Incorporation – Company Registration Cost in India 2026). FDI equity inflows from April to December 2025 hit USD 47.87 billion — a 22% year-on-year increase (IBEF, citing DPIIT data, 2025). The business case for setting up a wholly owned subsidiary in India has rarely been stronger. The following is a detailed walkthrough of each stage, with associated costs at every step. What Are The Key Steps To Set Up A Wholly owned subsidiary In India from United States and United Kingdom? The process moves through seven sequential stages, with a total timeline of 7 to 21 working days under standard conditions on the MCA V3 portal via SPICe+, according to Global Law Experts (2026). Delays tend to crop up when the RoC spots document discrepancies or during peak filing periods. Step 1: Obtain Digital Signature Certificates (DSCs). Every proposed director needs a Class 3 DSC, costing INR 2,000 to INR 6,000 per certificate (indiacompanyincorporation.com, 2026). Step 2: Reserve a company name via RUN (Reserve Unique Name) or SPICe+ Part A. You submit two name options to the Registrar of Companies (RoC). No separate fee applies beyond the SPICe+ filing. Step 3: Prepare and file the SPICe+ form (Part B). This single form covers incorporation, DIN allotment for directors, PAN, TAN, EPFO, ESIC, and a bank account opening request. The MCA filing fee for authorised capital up to INR 15,00,000 comes to INR 500. If your capital goes above that threshold, the fee is INR 500 plus INR 300 for every additional INR 10,00,000 (mca.gov.in, 2026). Step 4: Draft and file the MOA and AOA. These are the constitutional documents that set out the subsidiary’s objects and governance structure. Stamp duty varies by state and this is where costs start to diverge meaningfully, as we’ll cover further below. Step 5: Receive the Certificate of Incorporation (COI), PAN, and TAN. All three are now issued at the same time through the SPICe+ process. Step 6: Open a bank account and remit share capital. The authorised dealer (AD) bank handles the inward remittance. AD bank charges range from INR 5,000 to INR 50,000 (globallawexperts.com, 2026). Step 7: File Form FC-GPR with the RBI within 30 days of share allotment. Professional fees for this filing come to roughly USD 132. As Bansi Shah, Lead- International Clients Group at Ascentium Indai, put it in May 2026: “With the Enforcement Directorate stepping up scrutiny of FEMA violations in 2025, especially delayed FC-GPR filings, these reporting timelines matter a lot more.” Filing late incurs a penalty of Rs. 7,500 plus 0.025% of the transaction amount, multiplied by the number of days the filing is late.     Registering from the UK and US: A Practical Checklist If the parent company is incorporated in the UK or the US, there’s a short additional checklist worth following to keep incorporation and RBI/AD bank processing running smoothly in India: Core corporate documents: certified true copies of the Certificate of Incorporation, Memorandum and Articles of Association, a current extract of the register of directors/secretary (Companies House for the UK; the relevant State Secretary of State for the US), and a board resolution approving the investment and authorising a signatory for the India incorporation. Notarisation and apostille: all overseas corporate and KYC documents need to be notarised and apostilled. For UK documents, the FCDO issues the apostille after notarisation; for US documents, it’s the Secretary of State in whichever state the document was notarised. India accepts apostilled documents under the Hague Convention, which both the UK and US have signed up to. Power(s) of Attorney and authorised signatory proof: executed POAs, where used, must be notarised and apostilled; banks and the RoC will usually want the authorised signatory’s notarised passport and proof of address. KYC and beneficial ownership: passport copy, recent residential address proof, and director/beneficial owner declarations (notarised and apostilled). Be prepared for AD banks to ask for extra proof of where the funds came from (audited financials, bank statements) for cross-border remittances from the UK/US. Tax residency and treaty documents: if the parent wants to claim benefits under the India–UK or India–US tax treaty, get a tax residency certificate (TRC) from HMRC (UK) or the relevant US tax authority and keep certified copies for the AD bank and tax filings in India. Translations and local format: UK and US documents are in English and don’t normally need translating, but make sure certified copies meet RoC and bank requirements (some banks insist on specific formatting or apostille placement). RBI/FC‑GPR and AD bank coordination: get in touch with the authorised dealer bank in India early; they’ll certify the inward remittance and guide you through the FC‑GPR filing details (valuation certificate, share allotment schedule). Delays usually come down to incomplete bank KYC or not enough proof showing where the funds came from in the UK/US parent account. Resident director options: if the UK/US parent can’t appoint an Indian resident director, use a reputable resident director service or appoint a local director via the board resolution before filing SPICe+. What Does It Actually Cost to Incorporate a Wholly Owned Subsidiary in India in 2026? Total cost comes down to three main things: which state you register in, how much authorised capital you choose, and whether you hire a chartered accountant, company secretary, or full-service provider. Professional fees on their own run from INR 25,000 to INR 2,00,000 or higher (indiacompanyincorporation.com, 2026). Combined government filing fees and stamp duty fall between INR 7,000 and INR 30,000, subject to authorised capital and the chosen state of registration. It’s worth paying close attention to the state-level differences. Delhi has the lowest combined stamp duty at roughly USD 34, while West Bengal reaches about USD 64 for the same authorised capital bracket … Read more