Forming a US Subsidiary of an Indian Company: Documents and Approvals

Build the parent-company authority file

The working file for an Indian company forming a US subsidiary should establish four things: the parent exists, its decision makers authorized this investment, the proposed funding can lawfully leave India, and the US ownership record will identify the parent correctly. Use the following document map to assign each item to its recipient. These are different evidence requests; a registrar, an Indian authorised dealer bank and a US bank do not receive an identical bundle.

Keep a master index showing the document owner, version, recipient and outstanding request. A parent’s incorporation certificate proves the Indian company exists; it does not establish that a particular employee may subscribe for shares. Likewise, a passport identifies a person but does not by itself authorize that person to bind the parent.

For investments to which it applies, section 186 of the Companies Act, 2013 requires sanction at a Board meeting with the consent of all directors present. Its approval limits, exceptions and public-financial-institution conditions need a transaction-specific review. The exception for acquiring securities of a wholly owned subsidiary concerns the special-resolution requirement in subsection (3); it is not a blanket exemption from section 186. Have the company secretary record why the chosen approval route applies, together with any required register entries, disclosures and filings.

Make the subsidiary’s ownership and state choices explicit

Decide whether the Indian company will own a US corporation’s stock or an LLC membership interest before documents are signed. A subsidiary formed under US state law is a separate entity. Registering the Indian parent itself to do business in a US state is a different transaction, with a different applicant and potentially different reporting consequences. An employee or director should not appear as the beneficial purchaser merely because they handled the filing.

For a corporation, settle the authorized share structure, subscription terms, initial directors, officers and signing authority. For an LLC, settle the member identity, management arrangement, contribution and operating agreement. These instructions should agree with the parent resolution. An LLC’s US tax classification also needs review: state-law limited liability does not determine its federal treatment. The IRS SS-4 instructions describe the default disregarded treatment of a domestic single-member LLC and partnership treatment of a domestic multi-member LLC. Obtain India–US tax advice before treating either as equivalent to a corporate subsidiary.

Select the formation state using the operating plan: premises, employees, management, customers and investor requirements. Delaware is an illustration, not an assumed recommendation. Its Division of Corporations formation instructions require an in-state registered agent with a physical street address and allow submission through its document filing service or by mail. Other states use their own certificates and systems. A registered agent receives legal papers; that role does not establish a bank-approved operating address.

The SBA registration guidance explains that business activity in another state can require foreign qualification, often supported by a certificate of authority and good-standing evidence. Record the actual operating state alongside the formation state. The US company registration service page can help scope formation coordination once those two locations and the proposed owner are clear.

Use an investment release register for Indian approvals

A permitted automatic-route investment does not ordinarily require a separate RBI approval letter. It still requires eligibility, supporting documents and processing through the designated AD bank. Under RBI’s current Overseas Investment Master Direction , updated April 1, 2026, approval-route proposals go through that bank and the relevant PRAVAAH form. Financial commitment above USD 1 billion in a financial year requires prior RBI approval even within otherwise available automatic-route limits.

Use this register as a finance-team control, not as an official government form. Give each row a named reviewer and attach their evidence or written reason for marking it inapplicable. Do not release funds merely because the US certificate has arrived. The decision concerns the investment and its funding, not just the existence of its recipient.

Agree the bank’s document requirements before paying for notarisation, apostilles or translations. Ask which document needs an original, certified copy, English translation or other authentication, and who may certify it. Do not infer a universal apostille requirement from a provider’s checklist. For pricing or valuation evidence, have the AD bank specify what it requires for the proposed instrument and transaction.

Carry one transaction identity through formation and remittance

Name one person to coordinate the Indian finance team, company secretary, US adviser and designated bank. Their handoff record should repeat the parent’s exact legal name, the subsidiary’s legal name, entity type, currency, instrument and authorized amount. Changes belong in that record before instructions are reissued. This prevents a state filer’s abbreviated customer name from becoming the purchaser name in the ownership documents.

1. Confirm the approval and funding sequence with the AD bank before entering the subscription or acquiring equity. Do not treat incorporation, share acquisition and payment as interchangeable events. Where documents provide for deferred payment, obtain advice on its reporting and commitment treatment.
2. Prepare the state filing and parent mandate together. Check name spelling and the proposed capital terms against the governance documents. Use the selected state’s accepted filing channel and retain its submission reference.
3. Complete the initial overseas-investment package through the designated bank. Regulation 9 of the OI Regulations requires a UIN before outward remittance or acquisition of equity, whichever is earlier. Regulation 10 requires financial-commitment reporting at remittance or commitment, whichever occurs first.
4. Execute the authorized transaction and retain the payment trail. The bank debit, currency conversion, receiving-account details and subscription or contribution reference should identify the same investment. Ask the bank how its acknowledgements will be delivered.
5. Reconcile the issued shares or membership interest to the agreed consideration and actual funding. Record any outstanding consideration or other difference explicitly, with the advisers’ treatment, rather than forcing the figures to match.

The final investment schedule should distinguish equity, a parent loan, a guarantee and an ordinary operating invoice. Labels matter because the same cash movement cannot be assumed to satisfy every category. For a proposed parent loan, the OI Regulations require the relevant ODI/control conditions and an arm’s-length loan agreement. Have the two-country advisers align the agreement, interest terms, accounts and remittance description before the first advance.

Budget separately for state filings, registered-agent service, any additional-state registration, document certification, legal and tax advice, bank charges and ongoing reporting. Invested capital belongs in the funding plan, not in a service-fee total. Processing dates depend on the selected state, submission method, bank review and any approval case; arrange the dependencies before committing to a launch date.

Keep the post-investment evidence file open

A state-stamped certificate establishes the entity’s formation; it does not establish the completed investment in the parent’s records. The ownership evidence must connect the Indian investor to the acquired interest. For a corporation, retain the executed subscription, issue authorization, stock ledger and applicable certificate or uncertificated-share record. For an LLC, retain the admission and contribution records and operating agreement identifying the Indian member. Ask the AD bank which legally effective evidence it will accept.

Under regulations 9 and 10 of the OI Regulations , investment evidence is due to the AD bank within six months from remittance or the relevant capitalization event. Calendar the actual trigger date. APR reporting is generally due each December 31; where the foreign entity’s accounting year ends December 31, the deadline is December 31 of the following year. Review the applicable exceptions and audited-financial-statement requirements rather than assuming US incorporation removes the audit question.

For a controlled subsidiary, arrange accounting and audit support early enough to produce the required reporting evidence. Also assess the Indian entity’s Foreign Liabilities and Assets return obligation and applicable financial-statement disclosures with its advisers. Keep submission acknowledgements in the same index as the investment evidence. Recording a future deadline is useful, but an acknowledgement is what closes a completed filing task.

If an existing overseas-investment reporting delay is discovered, refer it to the designated bank before a further commitment or transfer. Regulation 12 restricts those actions until the delay is regularised. The remedy depends on the missed requirement and available late-submission procedure; quietly attaching the old document to a new transfer request does not establish that the delay has been resolved.

Separate tax, bank and operating clearances

Prepare Form SS-4 using the subsidiary’s legal identity and actual facts. The responsible party generally must be a natural person with ultimate control, rather than the Indian corporate parent or a nominee. The IRS responsible-party and application instructions allow “foreign” or “N/A” where that person lacks and is ineligible for an SSN or ITIN. Applicants without the specified US residence, office or business location cannot use the online process; select the applicable international telephone, fax or mail route. The IRS does not charge an EIN application fee.

Give the US tax preparer the ownership chart and a transaction ledger from inception. A 25% foreign-owned US corporation generally files Form 5472 when it has reportable related-party transactions. A foreign-owned US disregarded entity can require Form 5472 with a pro forma Form 1120, including for qualifying contributions or distributions. The IRS Form 5472 instructions distinguish those filings and their submission rules. Do not infer an exemption from an absence of customer revenue. Maintain contracts and support for intercompany charges as they arise.

BOI is a separate regime. As checked October 26, 2026, FinCEN’s official BOI page confirms that US-created companies are exempt under its final rule effective August 14, 2026. An Indian-law entity registered in the United States can fall within the foreign reporting-company definition unless exempt. That distinction is another reason to identify the actual applicant before filing; it does not remove IRS reporting or bank ownership enquiries.

For banking, supply the institution’s requested corporate documents, beneficial-ownership chain, signatory identification and business evidence. The bank decides whether it accepts the structure, addresses, remote verification and source of funds. Formation and an EIN do not guarantee account opening or payment-platform approval. An unresolved account requirement can delay usable funding even when the legal investment route has been established.

Before trading or hiring, assign state and local tax registration, payroll and licensing checks to the actual activities and locations. The SBA launch checklist treats registration, tax IDs, permits and banking as separate tasks. Use the corporate-parent control and reporting checks when an LLC is being considered, while retaining the Indian approval and overseas-investment workstream described here.

Release the subsidiary mandate with named owners

Hand the formation team a settled owner, entity, state and governance instruction; hand the designated bank a consistent investment package and approval assessment. The immediate priority is agreement between the parent’s mandate and the proposed funding instrument . If either changes, obtain the appropriate revised authority and bank review before relying on the earlier package.

Keep three named owners after formation: one for US governance and tax records, one for Indian remittance and reporting evidence, and one for banking and operating permissions. Escalate a disputed investment route, missing consent or unresolved reporting delay to the relevant adviser and AD bank. Close each task only against its own acceptance or evidence record, so a certificate received in one jurisdiction does not conceal an unfinished obligation in the other.