Cost of Setting Up a Subsidiary Company in India (Government + Professional Fees)
Cost is one of the first questions foreign companies ask before entering India. The good news is that incorporation itself is affordable; the real budget should account for professional services, document legalisation, and recurring compliance. This guide gives a transparent breakdown of the cost of setting up a subsidiary company in India — government fees, stamp duty, professional charges, and ongoing costs.
What Makes Up the Total Cost?
The overall cost has four components: government and statutory fees, stamp duty, professional fees, and document legalisation (apostille). On top of the one-time setup, there are recurring annual compliance costs.
1. Government and Statutory Fees
The Ministry of Corporate Affairs charges fees for name reservation, incorporation (SPICe+), DIN, PAN, and TAN. For companies with modest authorised capital, MCA has reduced or zero incorporation fees, so the statutory portion is generally low. Digital Signature Certificates for directors are a small per-person cost.
2. Stamp Duty
Stamp duty on the Memorandum and Articles of Association varies by state and authorised capital. States levy different rates, so the same company can cost slightly more or less depending on where the registered office is located.
3. Professional Fees
This is usually the largest controllable element. A professional firm handles drafting, filing, coordination, and FDI reporting. Fees depend on the complexity — a straightforward wholly owned subsidiary costs less than a setup needing sectoral approvals or a resident director arrangement.
4. Document Legalisation (Apostille)
Foreign documents must be notarised and apostilled in the home country. These charges are paid abroad and vary by country, but they are an unavoidable part of a foreign subsidiary’s setup. See our document checklist for what needs legalising.
Indicative Cost Structure
| Component | Nature | Notes |
|---|---|---|
| MCA/government fees | One-time | Low for modest capital |
| Stamp duty | One-time | State-dependent |
| DSC for directors | One-time | Per director |
| Professional fees | One-time | Scope-dependent |
| Apostille/notarisation | One-time | Paid abroad |
| Annual compliance | Recurring | Audit, ROC, tax, FEMA |
Recurring Annual Costs
After incorporation, budget for the statutory audit, annual ROC filings (AOC-4 and MGT-7), income tax return, GST returns (if registered), and FEMA reporting in the first year. Many foreign subsidiaries outsource this to a company secretarial services provider on a retainer.
How to Control Costs
- Start with a realistic authorised capital to keep stamp duty in check.
- Bundle incorporation and first-year compliance with one firm.
- Begin apostille early to avoid rushed, expensive courier and legalisation.
- Choose the registered-office state thoughtfully.
Frequently Asked Questions
Is there a minimum capital cost?
No statutory minimum capital is required, so you are not forced to lock in large funds at incorporation.
Why do professional fees vary so much?
They depend on scope — resident director needs, sectoral approvals, and FDI complexity all affect the work involved.
Are there hidden recurring costs?
The main recurring costs are audit, ROC filings, tax, and FEMA reporting — plan for these from year one.
Does the state affect cost?
Yes. Stamp duty differs by state, which slightly changes the total.
Get a Clear Cost Estimate
S. Choudhary & Co. provides transparent, all-inclusive quotes for foreign subsidiary setup and compliance. See our incorporation services or call +91 90248 28295 · sushil@sushilchoudhary.com.
