# Bank Account for a Foreign Subsidiary in India, KYC and Timeline 2026

> Source: https://krystal7.com/insights/bank-account-for-indian-subsidiary-documents-timeline
> Publisher: Krystal7 Consultants (Krystal7 Innovations Private Limited), Gurugram, India
> Author: CA Nandini
> Published: 17 Jan 2026; updated 24 Oct 2026
> Summary: A foreign owned Indian company opens a current account with KYC on owners above 10 percent, then must allot shares within 60 days of the remittance.

*Written by CA Nandini Hasija, Krystal7 Consultants. Last updated 23 October 2026.*

## AI Overview Summary

- A new Indian subsidiary opens a current account by giving the bank its incorporation certificate, MOA, AOA, PAN, a board resolution and KYC of signatories, under paragraph 33 of RBI's 2025 KYC Directions.
- The bank must identify every natural person who owns more than 10 percent of the Indian company, directly or through the foreign parent, or who controls it through other means.
- Video KYC cannot onboard a foreign director who is abroad, because RBI requires the V-CIP system to block connections from IP addresses outside India.
- Share capital must arrive by inward remittance through banking channels, the shares must be issued within 60 days of receipt, and Form FC-GPR is due within 30 days of issue.
- FDI money cannot be credited to an EEFC account, which RBI limits to foreign exchange earnings and keeps only as a non interest bearing current account.

**A foreign subsidiary in India opens a current account with an Authorised Dealer (AD) Category I bank. RBI's KYC Directions for commercial banks of 28 Nov 2025 set the list. Paragraph 33 asks for the certificate of incorporation, MOA and AOA, PAN, a board resolution and KYC of signatories and owners above 10 percent. The parent then remits share capital. The company must issue shares within 60 days of receipt and file Form FC-GPR within 30 days of the issue.**

This page covers the documents, beneficial owner checks, foreign director KYC and video KYC limits. It also covers how share capital should arrive, the FIRC and FC-GPR link, EEFC accounts, choosing a bank and a realistic timeline.

## How does a foreign subsidiary open a bank account in India?

A foreign subsidiary opens a current account at an AD Category I bank once MCA issues the certificate of incorporation and PAN. The board passes a resolution naming the signatories. The bank collects the company's documents and the KYC of its signatories and beneficial owners, verifies the registered office and activates the account.

The process starts inside the incorporation filing. MCA's [AGILE-PRO-S page](https://www.mca.gov.in/MinistryV2/agile.html) says a new company filing Form INC-35 with SPICe+ must apply for a bank account through it. The form passes the application to a bank integrated with MCA. That bank then runs its own KYC. The SPICe+ application does not replace bank KYC. Our [SPICe+ guide](/insights/spice-incorporation-spice-plus-guide-2026) covers the incorporation side.

The steps, in the order they usually run:

1. MCA issues the certificate of incorporation, with the company's PAN and TAN.
2. The board holds its first meeting and resolves to open the account and name the signatories.
3. The company submits the account opening form and the KYC documents to the bank.
4. The bank identifies the beneficial owners, looking through the foreign parent.
5. Every signatory completes KYC, in person, by video or through certified copies.
6. The bank verifies the registered office address.
7. The bank opens the account, issues net banking access and uploads the KYC to the central registry.
8. The parent remits the share capital, and the bank issues the FIRC.

Section 173(1) of the Companies Act, 2013 requires the first board meeting within 30 days of incorporation. That meeting is the natural place to pass the bank resolution. Every Indian company also needs at least one resident director under section 149(3). That director often becomes the first signatory, because Indian KYC is easier for a person in India. See [resident director requirement](/insights/resident-director-requirement-indian-company).

## Which documents does the bank ask for?

RBI issued the [KYC Directions for commercial banks](https://www.rbi.org.in/scripts/BS_ViewMasDirections.aspx?id=13141) as RBI/DOR/2025-26/169 on 28 Nov 2025, updated as on 1 Oct 2026. Paragraph 33 lists what a bank must collect for a company. It asks for certified copies, or equivalent electronic documents, of seven items. Banks add their own forms on top.

| Document | Who provides it | Rule | What we check before submitting |
|---|---|---|---|
| Certificate of incorporation | MCA, through SPICe+ | Para 33 | CIN and name match the bank form exactly |
| Memorandum and Articles of Association | Company | Para 33 | Signed, stamped copy as filed with MCA |
| PAN of the company | Income Tax Department, issued with incorporation | Para 33 | PAN name matches the certificate |
| Board resolution and power of attorney for those who will transact | Board of the Indian company | Para 33 | Names, signing limits and joint or single operation |
| KYC of beneficial owners and of managers or employees holding an attorney | Each individual | Para 33, read with para 23 | Passport and address proof for foreign nationals |
| Names of persons holding senior management positions | Company | Para 33 | Directors and key officers listed with roles |
| Registered office and principal place of business, if different | Company | Para 33 | Lease or ownership proof and a utility bill |
| FATCA and CRS self certification | Company and its controlling persons | Para 66 | Entity classification and tax residence of controlling persons |
| Ownership chart up to natural persons | Company and foreign parent | Para 38 | Percentages at every layer, adding to 100 |

Paragraph 66 still ties FATCA and CRS reporting to rules 114F to 114H of the Income Tax Rules, 1962. That holds even in the text updated as on 1 Oct 2026. From 1 Apr 2026 the Income Tax Rules, 2026 carry the framework in rules 238 to 240. They sit under [section 508 of the Income Tax Act, 2025](https://www.incometaxindia.gov.in/w/section-508-2).

[Rule 238](https://www.incometaxindia.gov.in/w/rule-238-1) holds the definitions. [Rule 239](https://www.incometaxindia.gov.in/w/rule-239-1) sets the information to report, in Form 166 (old Form 61B), by 31 May of the following year. [Rule 240](https://www.incometaxindia.gov.in/w/rule-240-1) sets the due diligence. The bank asks for the self certification either way.

Banks usually ask for the parent's own documents too. The list tends to include the parent's certificate of incorporation, its constitutional documents, a register of shareholders and a resolution approving the investment. Many banks want these notarised, apostilled or consularised, depending on the country. We send the bank's exact list to the parent before anyone visits a notary.

## Who is a beneficial owner for bank KYC?

For a company customer, the beneficial owner is any natural person who owns more than 10 percent of the shares, capital or profits. The holding can be direct or through other entities. A person who controls the company by other means also counts. Control includes the right to appoint most directors or to steer management or policy, including through agreements.

The definition sits in paragraph 5(1)(iv)(a) of the KYC Directions. It follows rule 9(3) of the Prevention of Money laundering (Maintenance of Records) Rules, 2005. Paragraph 38 tells the bank to identify the beneficial owners and take reasonable steps to verify them.

A foreign parent is a juridical person, so the bank looks through it. Suppose the parent owns 99.99 percent of the Indian company. Any natural person who owns more than 10 percent of the parent is then a beneficial owner of the Indian company. Where funds or other companies sit in between, the bank traces each chain.

Where no natural person crosses the line, rule 9(3) of the PML Rules treats the senior managing official as the beneficial owner. For a venture backed parent with a wide cap table, this is often the parent's chief executive.

Paragraph 38(1) gives one exemption. The bank need not identify shareholders or beneficial owners where the customer, or the owner of its controlling interest, is one of these:

1. An entity listed on a stock exchange in India.
2. An entity resident in a jurisdiction notified by the Central Government and listed on a stock exchange there.
3. A subsidiary of such a listed entity.

A subsidiary of a listed foreign group should ask the bank early whether the parent's jurisdiction is notified. If it is not, the full look through applies.

Bank KYC is a separate test from the Companies Act test for a Significant Beneficial Owner. The company still files its own register and Form BEN-2 under section 90. We cover that in [BEN-2 and significant beneficial owners with a foreign parent](/insights/significant-beneficial-owner-ben-2-foreign-parent).

| Point | Beneficial owner for bank KYC | Significant Beneficial Owner under the Companies Act |
|---|---|---|
| Law | Rule 9(3), PML (Maintenance of Records) Rules, 2005; para 5(1)(iv) and 38, KYC Directions | Section 90, Companies Act, 2013; Companies (Significant Beneficial Owners) Rules, 2018 |
| Threshold for a company | More than 10 percent of shares, capital or profits | At least 10 percent of shares, voting rights or distributable dividend |
| Control test | Right to appoint most directors or control management or policy | Right to exercise significant influence or control |
| Fallback when no one crosses the line | Senior managing official | No individual to report in Form BEN-2; see our SBO page for the company's other duties |
| Who acts | The bank identifies and verifies | The company files Form BEN-2 with the Registrar |
| Listed parent exemption | Yes, under para 38(1) | Separate exemptions in the SBO rules |

## How do foreign directors and signatories complete KYC?

A foreign signatory or beneficial owner gives the bank a passport as the Officially Valid Document, plus an address proof. The bank verifies the person in a branch, by video if the person is in India, or through certified copies. Which route works depends on where the person is and on the bank's own policy.

Paragraph 5(1)(xiv) of the KYC Directions lists the OVDs, starting with the passport. A foreign passport carries no address. For that case, paragraph 5(1)(xiv)(d) lets the bank accept documents issued by a foreign government department. It also accepts a letter from the foreign embassy or mission in India as proof of address.

The proviso to paragraph 5(1)(v) lets a bank accept certified copies from named certifiers. It names Non Resident Indians and Persons of Indian Origin. The certifiers include authorised officials of overseas branches of Indian scheduled commercial banks and branches of overseas banks that have relationships with Indian banks. A notary public abroad, a court magistrate, a judge and the Indian embassy or consulate are also on the list.

For foreign nationals who are neither NRIs nor PIOs, banks often apply similar certifiers as a matter of internal policy. Some banks with overseas branches let a foreign signatory complete KYC at that branch. We ask the bank in writing which certifiers it accepts before the parent books an appointment.

| Route | Who can use it | Where the person must be | What the bank receives | Common catch |
|---|---|---|---|---|
| In person at an Indian branch | Any signatory or beneficial owner | In India | Original passport, visa, address proof, photograph | Needs a trip; the bank may want the branch near the registered office |
| Video KYC (V-CIP) | Signatories and beneficial owners of a company | In India, on an Indian IP address | Live video, passport, live GPS location | Blocked for anyone abroad |
| Certified copies from an approved certifier | NRIs and PIOs under para 5(1)(v); others by bank policy | Abroad | Copies certified by an overseas branch, notary, judge or Indian mission | Banks differ on which certifiers they accept |
| KYC at the bank's overseas branch | Signatories of banks with an overseas branch | In that country | Branch officer's verification | Only where the bank has a branch nearby |
| Apostilled or consularised copies | Parent documents and, by bank policy, individuals | Abroad | Notarised copy with apostille or consular stamp | Country specific; some banks ask for both |

Our [DIN guide for foreign directors](/insights/foreign-national-director-indian-company-din) covers the MCA side of the same documents. We prepare one notarised and apostilled set that serves the DIN, the bank and the FC-GPR file, where the bank accepts it.

## Can a foreign director use video KYC from abroad?

No. RBI allows video KYC (V-CIP) for authorised signatories and beneficial owners of a company. Paragraph 27(1)(iii) of the KYC Directions requires the V-CIP system to block connections from IP addresses outside India. Paragraph 27(1)(iv) requires live GPS coordinates in the recording. A foreign director abroad must use another route.

Paragraph 26(1) sets the scope of V-CIP. It covers new individual customers, proprietors, and authorised signatories and beneficial owners of legal entity customers. So a foreign director visiting India can complete V-CIP from a hotel in Bengaluru. The same director cannot complete it from London.

Paragraph 27(3)(i) also requires the bank to store V-CIP data and recordings on systems in India. Using a VPN to show an Indian IP address does not fix the problem. The live GPS coordinates still show the real location. We tell founders plainly not to try it.

The practical answer for a director abroad is one of three routes:

1. Visit an Indian branch, or complete V-CIP, on the next trip to India.
2. Use certified copies from a certifier the bank accepts.
3. Use the bank's overseas branch, where it has one.

Many groups make the resident director the first operating signatory. The foreign directors sign later, once their KYC clears. Joint signing rules can add them as approvers on net banking without delaying the account.

## What KYC does the bank need on the foreign parent?

The bank needs enough on the parent to trace ownership to natural persons and to confirm who authorised the investment. Expect the parent's incorporation certificate, constitutional documents, shareholder register, board resolution and an ownership chart. Banks apply enhanced checks under paragraph 61 where the parent sits in a country that FATF flags.

The parent's documents also matter for the remittance. The name on the parent's bank account abroad should match the shareholder name in the MOA or allotment. A mismatch makes the bank hold the inward remittance until someone explains it. We have seen remittances sent from a sister company's account, which the bank cannot treat as the shareholder's investment.

Land border countries add a layer. The parent or a beneficial owner may sit in a country that shares a land border with India. The investment then needs government approval under Press Note 3 (2020 Series). The [Cabinet decision of 10 Mar 2026](https://www.pmindia.gov.in/en/news_updates/cabinet-approves-changes-in-guidelines-on-investments-from-countries-sharing-land-border-with-india/) changed this for small stakes. Non controlling land border beneficial ownership of up to 10 percent can stay on the automatic route, with a report to DPIIT.

In our experience banks ask for the approval letter before they credit share capital. See [Press Note 3 and land border FDI](/insights/press-note-3-fdi-land-border-countries).

After opening, paragraph 65(6) requires the bank to upload the company's KYC to the Central KYC Records Registry. That applies to company accounts opened on or after 1 Apr 2021. Paragraph 65(2) sets 10 days from the start of the relationship. Paragraph 65(7) requires the bank to pass the KYC Identifier to the company. Keep it, because other regulated entities can retrieve the record with it.

## How should the parent remit share capital?

The parent sends the money by inward remittance through banking channels to the company's account. FEMA 395/2019-RB also allows a debit to a repatriable foreign currency or rupee account in India (regulation 3.1, Schedule I, paragraph A(1)). The company must issue the shares within 60 days of receipt and refund anything unissued within the next 15 days.

The [FEMA 395 regulations](https://rbi.org.in/Scripts/NotificationUser.aspx?Id=11723&Mode=0), amended up to 13 Jun 2026, set these clocks. For partly paid shares, the 60 days run from each call payment. The refund goes back by outward remittance through banking channels, or to a repatriable account.

Four practical points decide whether the remittance goes through cleanly:

1. **Remitter name.** The money must come from the shareholder's own account. A remittance from an affiliate or a founder's personal account is not the shareholder's investment.
2. **Purpose.** The parent's bank message should say the money is equity investment in the named Indian company. The AD bank maps it to the FDI purpose code. See [purpose codes for foreign remittances](/insights/purpose-codes-for-foreign-remittance-india).
3. **Charges.** Ask the parent to send the payment with SWIFT charge code OUR. With SHA or BEN, intermediary banks deduct fees and less arrives.
4. **Shares follow the rupees.** The company issues shares for the rupee amount credited, as shown on the FIRC. We fix the share count only after the FIRC arrives.

The subscription money for the MOA shares needs the same care. Section 10A of the Companies Act, 2013 requires a declaration in Form INC-20A within 180 days of incorporation. The declaration confirms that every subscriber has paid for its shares, with proof of payment. The bank account has to be live well before that date. See [INC-20A for a foreign subsidiary](/insights/inc-20a-commencement-of-business-foreign-subsidiary).

| Event | Time limit | Counted from | Law |
|---|---|---|---|
| First board meeting, with the bank resolution | 30 days | Incorporation | Section 173(1), Companies Act, 2013 |
| Share certificates to MOA subscribers | Two months | Incorporation | Section 56(4)(a) |
| Issue of shares against FDI received | 60 days | Receipt of the money | FEMA 395, Schedule I, para A(2) |
| Refund of money not converted into shares | 15 days | End of the 60 days | FEMA 395, Schedule I, para A(3) |
| Form FC-GPR | 30 days | Issue of the shares | FEMA 395, regulation 4(1) |
| Form PAS-3, return of allotment | 30 days | Allotment | Section 39(4) and rule 12 |
| Form INC-20A, with proof of subscription money | 180 days | Incorporation | Section 10A |

## How do the FIRC and investor KYC link to Form FC-GPR?

The FIRC proves the FDI inflow, and the bank's KYC on the foreign investor proves who sent it. Both go into Form FC-GPR on RBI's FIRMS portal. The rupee amount on the FIRC must match the amount the company reports as consideration. If they differ, the AD bank sends the form back.

FC-GPR is filed on FIRMS, which RBI's [Master Direction on Reporting under FEMA](https://www.rbi.org.in/scripts/bs_viewmasdirections.aspx?id=10202) (updated as on 1 Oct 2026) governs. Before the first filing, the company completes its Entity Master and creates a business user on FIRMS. The AD bank then verifies the form against its own records of the remittance.

The AD bank's checklist on FIRMS decides the final list. In our filings, the supporting papers usually include these items:

1. The FIRC for each remittance, or the bank's certificate for a debit to a repatriable account.
2. The KYC report on the foreign investor, which the AD bank provides from the remitting bank's details.
3. The valuation certificate supporting the issue price under the pricing rules.
4. The company secretary's or director's declaration on compliance with FEMA.
5. The board resolution allotting the shares.

The KYC report is the step founders forget. The AD bank obtains the remitter's KYC through the overseas remitting bank. That takes days, sometimes weeks, so we request it the day the money lands. The 30 day FC-GPR clock does not stop while the bank waits.

Shares issued to MOA subscribers are FDI too. Regulation 4(1) of FEMA 395/2019-RB counts the 30 days from the date of issue. It does not treat MOA shares separately. Paragraph 8.5 of the Master Direction on Foreign Investment prices shares issued on subscription to the MOA at face value. RBI's text does not say whether the date of issue for these shares is the date of incorporation or the day the subscription money arrives. We ask the AD bank in writing which date it takes, and we file early.

A late FC-GPR attracts a Late Submission Fee under A.P. (DIR Series) Circular No. 16 of 30 Sep 2022. See our [FC-GPR filing guide](/insights/fc-gpr-filing-timeline-and-process-for-foreign-founders) and the batch page on the [late submission fee](/insights/late-submission-fee-fema-reporting).

## Can share capital be credited to an EEFC account?

No. An Exchange Earners' Foreign Currency (EEFC) account is for foreign exchange earnings, such as export proceeds. RBI's [EEFC FAQ](https://www.rbi.org.in/scripts/faqview.aspx?id=21) says the permitted inward remittances exclude those received as foreign currency loans or investment from abroad. FDI is converted into rupees and credited to the current account.

The rules come from FEMA 10(R)/2015-RB, the Foreign Exchange Management (Foreign Currency Accounts by a Person Resident in India) Regulations, 2015. The RBI FAQ, last updated on 5 Jul 2016, summarises them:

1. A person resident in India, including a company, may open the account.
2. Up to 100 percent of foreign exchange earnings can be credited to it.
3. It can be held only as a current account, and it pays no interest.
4. Debits cover permitted current and capital account payments abroad and some payments in India.
5. The FAQ says each month's accruals are converted into rupees by the last day of the next month, after approved uses and forward commitments.

An EEFC account helps a subsidiary that bills its parent in dollars and pays foreign vendors in dollars. It avoids converting twice. Our [EEFC account guide](/insights/eefc-account-for-foreign-owned-company) covers the credits and debits in detail.

From 1 Oct 2026, export proceeds follow the Foreign Exchange Management (Export of Goods and Services) Regulations, 2026 (FEMA 23(R)/2026-RB). Services exporters now file the EDF instead of SOFTEX, which affects what lands in the EEFC account.

## How should a foreign owned company choose its bank?

Choose on what the subsidiary will do in its first two years, not on the brand the parent uses at home. The account needs an AD Category I licence for FDI, a team that handles FC-GPR, and a workable KYC route for foreign signatories. Net banking controls that let the parent approve payments matter as much as fees.

We do not recommend or rank banks. These are the criteria we test, with the question we put to the bank in writing:

| Criterion | Why it matters | Question to ask the bank |
|---|---|---|
| AD Category I status and FDI desk | FIRC, investor KYC report and FC-GPR all run through it | Which team verifies FC-GPR, and how fast is the KYC report issued? |
| KYC route for foreign signatories | Decides whether directors abroad can sign | Which certifiers do you accept, and do you have an overseas branch? |
| Integration with AGILE-PRO-S | Lets the account application start inside SPICe+ | Is the bank on MCA's integrated list for INC-35? |
| Net banking controls | The parent can approve payments with maker and checker roles | Can a director abroad approve payments, and with what token? |
| EEFC and forex pricing | Billing the parent in foreign currency costs less | What spread over the reference rate applies to conversions? |
| Average balance and charges | Small subsidiaries pay penalties on high minimum balances | What is the minimum balance and the charge for a shortfall? |
| Branch location | Some banks open accounts only at a branch near the registered office | Must the home branch be in the same city as the registered office? |
| Payroll and tax payments | GST, TDS, PF and salaries run through the account | Can the account pay GST and TDS challans and bulk salaries online? |

Ask for the answers by email. Relationship managers change, and written answers survive the change.

## How long does it take to open the account?

No rule sets a timeline for opening a bank account. In our practice, we plan for about 30 calendar days from incorporation to an operational current account. The time goes on KYC of foreign signatories and the registered office check. Share capital and FC-GPR follow once the account is live.

| Stage | What happens | Who acts | Planning time in our practice | Rule that sets a limit |
|---|---|---|---|---|
| 1 | Incorporation, PAN and TAN | MCA and Income Tax Department | Day 0 | None |
| 2 | Board resolution for the account | Board | Within the first week | First board meeting within 30 days, section 173(1) |
| 3 | Account form and company documents | Company | First week | None |
| 4 | KYC of foreign signatories and beneficial owners | Each individual and the bank | The longest stage | None; V-CIP needs the person in India |
| 5 | Registered office verification | Bank | After documents are in | None |
| 6 | Account opened and net banking active | Bank | About 30 calendar days from incorporation | None |
| 7 | Share capital remitted and FIRC issued | Parent and bank | After the account is live | INC-20A within 180 days of incorporation |
| 8 | Shares issued | Board | After the FIRC | 60 days from receipt |
| 9 | FC-GPR and PAS-3 | Company and AD bank | After allotment | 30 days from issue |

The two delays we see most often are signatory KYC and the address check. A virtual office or a shared desk without a clear agreement fails the bank's address verification. Use a lease or a no objection letter with a utility bill in the company's or the owner's name.

## What happens after the account is open?

The account becomes the base for every other registration. GST, payroll, tax payments and the first FDI reporting all draw on it. Four tasks follow straight away, and two recur every year.

1. **GST bank details.** Rule 10A of the CGST Rules, 2017 requires bank account details after GST registration. Our [GST registration guide](/insights/gst-registration-for-foreign-companies-in-india) covers the registration itself.
2. **Allotment and PAS-3.** Issue the shares and file PAS-3 within 30 days under rule 12, read with section 39(4). Stamp duty of 0.005 percent applies to the issue. Our [PAS-3 guide](/insights/pas-3-return-of-allotment-foreign-investors) lists the attachments.
3. **Demat shares.** A subsidiary of a body corporate does not qualify as a small company under section 2(85). Rule 9B of the Companies (Prospectus and Allotment of Securities) Rules, 2014 then applies. It requires a private company that is not small to issue securities only in demat form. It must also facilitate demat of all its securities. [PIB](https://www.pib.gov.in/PressReleasePage.aspx?PRID=1991275) reported the rule under G.S.R. 802(E) of 27 Oct 2023. Rule 9B(2) gives eighteen months from the close of any financial year whose last day finds the company not small. On our reading, a company incorporated in 2026 with a 31 March year end starts the count at 31 Mar 2027. It then has until 30 Sep 2028. Check the current rule text on the MCA site before you fix the date.
4. **Signatory changes.** Each change of signatory needs a fresh board resolution and the new person's KYC.

Two items recur. The bank updates KYC periodically under paragraph 42 of the KYC Directions, and asks for fresh documents. The company also files the annual FLA return on FLAIR by 15 July, using the same FDI figures the FIRCs support.

## What changed in 2026

The bank side of this process moved to new RBI Directions on 28 Nov 2025, before this page's publish date of 17 Jan 2026. The later changes below came after that date. The text states the law as on 23 Oct 2026.

| Old rule | New rule | Date | Instrument |
|---|---|---|---|
| Master Direction on KYC, 2016 for banks | KYC Directions for commercial banks, consolidated | 28 Nov 2025 | RBI/DOR/2025-26/169 |
| KYC Directions as first issued | Updated text | 1 Oct 2026 | RBI KYC Directions, updated as on 1 Oct 2026 |
| FEMA 395 as amended to 15 Jan 2025 | Further amendment | 13 Jun 2026 | FEMA 395(4)/2026-RB |
| SOFTEX for software exports, 2015 export regulations | EDF for services, new export regulations | 1 Oct 2026 | FEMA 23(R)/2026-RB |
| Income Tax Act, 1961 | Income Tax Act, 2025 | 1 Apr 2026 | Act 30 of 2025 |
| Rules 114F to 114H, Income Tax Rules, 1962 (FATCA and CRS) | Rules 238 to 240, Income Tax Rules, 2026; Form 166 replaces Form 61B | 1 Apr 2026 | Income Tax Rules, 2026 (G.S.R. 198(E) of 20 Mar 2026) |
| Land border beneficial owner sent the case to approval at any level | Non controlling stake up to 10 percent on the automatic route, with a DPIIT report | 10 Mar 2026 | Cabinet decision of 10 Mar 2026 |
| Master Direction on Reporting under FEMA, earlier text | Updated text | 1 Oct 2026 | RBI Master Direction, updated as on 1 Oct 2026 |

None of these changes altered the 60 day issue rule, the 15 day refund rule or the 30 day FC-GPR clock.

## Worked example

In this scenario a US parent funds a new subsidiary. ParentCo Inc. incorporates IndCo Private Limited on 2 Nov 2026. ParentCo subscribes 9,999 shares of INR 10 in the MOA and its nominee subscribes one share. The exchange rate of INR 88.00 per USD and the bank charges are assumed for illustration.

IndCo's current account goes live on 2 Dec 2026, 30 days after incorporation. ParentCo remits USD 60,000 on SWIFT charge code SHA. An intermediary bank deducts USD 25. The money lands on 9 Dec 2026.

| Item | Working | Amount |
|---|---|---|
| Remitted by ParentCo | Given | USD 60,000 |
| Intermediary charge | Deducted on SHA | USD 25 |
| Credited to IndCo | 60,000 minus 25 | USD 59,975 |
| Rupee amount on the FIRC | 59,975 × 88.00 | INR 52,77,800 |
| Subscription money for 9,999 MOA shares | 9,999 × 10 | INR 99,990 |
| Balance for a further issue | 52,77,800 minus 99,990 | INR 51,77,810 |
| Shares at INR 10 face value | 51,77,810 ÷ 10 | 5,17,781 shares |
| Stamp duty on the further issue at 0.005 percent | 51,77,810 × 0.005 percent | INR 259 (rounded) |

Here the rupee figure divides evenly. When it does not, any residue left unissued must be refunded within 15 days after the 60 days. That is why we fix the share count only after the FIRC arrives. With charge code OUR, the full USD 60,000 would have arrived.

The board allots the 5,17,781 shares on 15 Dec 2026. The deadlines then fall as follows:

1. Latest date to issue shares: 9 Dec 2026 plus 60 days, which is 7 Feb 2027.
2. Latest refund of any unissued money: 7 Feb 2027 plus 15 days, which is 22 Feb 2027.
3. Form FC-GPR for the further issue: 15 Dec 2026 plus 30 days, which is 14 Jan 2027.
4. Form PAS-3: also 14 Jan 2027, 30 days from allotment.
5. Form INC-20A: 2 Nov 2026 plus 180 days, which is 1 May 2027.

The investor KYC report is requested on 9 Dec 2026, the day the money lands. That leaves the full 30 day FC-GPR window for the bank to deliver it. The FC-GPR reports INR 51,77,810, which matches the balance of the FIRC after the subscription money.

The 9,999 MOA shares need their own Form FC-GPR for INR 99,990. Which day starts that 30 day count is the open point described above, so we settle it with the AD bank before the money lands.

## Common mistakes

1. **Sending capital before the account is live.** Money sent to a wrong or pending account bounces or sits in suspense. Fix: remit only after the bank confirms the account number in writing.
2. **Remitting from the wrong entity.** A sister company's or founder's account does not prove the shareholder's investment. Fix: send from the shareholder's own account, in its exact legal name.
3. **Using SHA or BEN charges.** Intermediary deductions leave odd rupee figures. Fix: use charge code OUR, and fix the share count after the FIRC.
4. **Booking video KYC for a director abroad.** V-CIP blocks foreign IP addresses. Fix: plan an Indian branch visit or a certified copy route.
5. **Missing the investor KYC report.** The FC-GPR stalls without it. Fix: request it from the AD bank the day the money lands.
6. **Treating FDI as an EEFC credit.** Investment from abroad cannot go into EEFC. Fix: credit share capital to the rupee current account.
7. **A weak registered office proof.** Address verification fails on a virtual office. Fix: provide a lease or no objection letter and a recent utility bill.
8. **Stopping the beneficial owner chart at the parent.** The bank needs natural persons above 10 percent. Fix: draw every layer to individuals, or to the senior managing official.
9. **Letting the 60 day clock run.** Unissued money must be refunded. Fix: diarise the issue date from the FIRC date.

For a subsidiary that wants one team on the bank, the FIRC and the FC-GPR, see our [foreign subsidiary service](/services/foreign-subsidiary.html).

## Checklist

1. Choose the bank against the criteria table and get its KYC list in writing.
2. Name the bank in AGILE-PRO-S when filing SPICe+.
3. Prepare one notarised and apostilled document set for the parent and the foreign directors.
4. Draw the ownership chart to natural persons above 10 percent.
5. Pass the board resolution naming signatories and signing rules at the first board meeting.
6. Submit the account form, company documents and FATCA and CRS self certification.
7. Complete KYC for each signatory by branch visit, V-CIP in India or certified copies.
8. Provide registered office proof that will pass the bank's address check.
9. Confirm the account number in writing before the parent remits.
10. Remit share capital from the shareholder's own account with charge code OUR.
11. Collect the FIRC and request the investor KYC report on the day of receipt.
12. Issue the shares within 60 days of receipt.
13. File Form FC-GPR and Form PAS-3 within 30 days of the issue.
14. File Form INC-20A within 180 days of incorporation.
15. Store the KYC Identifier the bank sends after the CKYCR upload.

## Key terms

- **Authorised Dealer (AD) Category I bank**: An AD Category I bank is a commercial bank that the Reserve Bank of India authorises under section 10 of FEMA, 1999 to deal in foreign exchange for current and capital account transactions. It receives FDI and export proceeds, checks FEMA filings such as FC-GPR before they reach RBI, holds EEFC accounts and approves most branch and liaison office applications. (https://krystal7.com/glossary#authorised-dealer-category-i-bank)
- **Foreign Inward Remittance Certificate (FIRC)**: A FIRC is the certificate an Indian AD bank issues for money received from abroad, showing the amount, currency, remitter and purpose. Banks report the electronic version to RBI's EDPMS. Exporters of services use the FIRC, or the eBRC built on it, as evidence of foreign exchange receipts for GST refunds under rule 89 of the CGST Rules, 2017. (https://krystal7.com/glossary#foreign-inward-remittance-certificate)
- **Form FC-GPR**: The report an Indian company files with the Reserve Bank of India on the FIRMS portal after issuing equity instruments to a person resident outside India. Regulation 4(1) of FEMA 395/2019-RB requires it within 30 days of the issue. The shares must be issued within 60 days of receiving the money, or the money is refunded within 15 days after. (https://krystal7.com/glossary#form-fc-gpr)
- **Beneficial owner (bank KYC)**: For a company customer, the natural person who owns or is entitled to more than 10 percent of its shares, capital or profits, alone or through other entities, or who controls it through other means. Rule 9(3) of the PML (Maintenance of Records) Rules, 2005 and RBI's KYC Directions define it. (https://krystal7.com/glossary#beneficial-owner-bank-kyc)
- **Video based Customer Identification Process (V-CIP)**: A live, consent based video interaction in which a bank official identifies a customer and records the session. RBI's KYC Directions allow it for authorised signatories and beneficial owners of companies, but the system must block connections from IP addresses outside India. (https://krystal7.com/glossary#video-based-customer-identification-process)
- **Exchange Earners' Foreign Currency (EEFC) account**: An EEFC account is a non interest bearing foreign currency current account that a person resident in India holds with an AD Category I bank. Schedule I to FEMA 10(R)/2015-RB lets it receive 100 percent of eligible foreign exchange earnings, but not FDI or foreign currency loans. Unused monthly credits are converted into rupees by the next month end. (https://krystal7.com/glossary#exchange-earners-foreign-currency-account)
- **Central KYC Records Registry (CKYCR)**: The central registry, run by CERSAI under the PML Rules, that stores customer KYC records. Banks upload the KYC of company accounts opened on or after 1 Apr 2021 and pass the KYC Identifier to the customer, so other regulated entities can reuse it. (https://krystal7.com/glossary#central-kyc-records-registry)
- **Officially Valid Document (OVD)**: An identity and address document a bank may accept for KYC under the PML Rules, such as a passport or driving licence. For a foreign national whose OVD has no address, RBI's KYC Directions let the bank accept a foreign government document or a letter from the foreign mission in India. (https://krystal7.com/glossary#officially-valid-document)

## Frequently Asked Questions

### What documents does a bank need to open an account for a foreign subsidiary in India?

Paragraph 33 of RBI's KYC Directions for commercial banks, 2025 needs certified copies of the certificate of incorporation, MOA and AOA and PAN. It also needs a board resolution and power of attorney for signatories, and KYC of beneficial owners and attorney holders. Names of senior management and the registered office address complete the list. Banks add FATCA and CRS forms and the parent's documents.

### Who counts as a beneficial owner of an Indian subsidiary for bank KYC?

Any natural person who owns more than 10 percent of the company's shares, capital or profits, alone or through the foreign parent, counts. So does anyone who controls it through other means, such as the right to appoint most directors. Rule 9(3) of the PML (Maintenance of Records) Rules, 2005 and paragraph 5(1)(iv) of the KYC Directions set this test.

### Can a foreign director complete video KYC from outside India?

No. Paragraph 26(1) of RBI's KYC Directions allows V-CIP for authorised signatories and beneficial owners of a company. Paragraph 27(1)(iii) requires the system to block connections from IP addresses outside India, and paragraph 27(1)(iv) requires live GPS coordinates. A director abroad uses a branch visit, certified copies or the bank's overseas branch.

### Does the foreign parent need to send apostilled documents to the bank?

The KYC Directions ask for certified copies, and banks decide which certification they accept. For parents and foreign individuals, most banks want notarised copies with an apostille or consular legalisation, depending on the country. We get the bank's list in writing first, so one document set serves the bank, the DIN and the FC-GPR.

### How should a foreign parent send share capital to its Indian subsidiary?

By inward remittance through banking channels to the subsidiary's account, from the parent's own account, under regulation 3.1 of FEMA 395/2019-RB. The parent should state the purpose as equity investment and use SWIFT charge code OUR. The bank converts the money into rupees and issues a FIRC, which supports Form FC-GPR.

### How long does a company have to issue shares after receiving FDI?

Sixty days from receipt of the money, under paragraph A(2) of Schedule I to regulation 3.1 of FEMA 395/2019-RB. If the company does not issue shares in that time, it must refund the money within 15 days after the 60 days. The refund goes by outward remittance or to a repatriable account.

### What is the link between the FIRC and Form FC-GPR?

The FIRC is the bank's evidence that the share capital came from abroad, with the rupee amount credited. Form FC-GPR, due within 30 days of the issue under regulation 4(1) of FEMA 395/2019-RB, reports that amount as the consideration. The AD bank checks that the FIRC, the investor KYC report and the form agree.

### Can FDI be received in an EEFC account?

No. RBI's EEFC FAQ says permitted inward remittances exclude those received as foreign currency loans or investment from abroad. The account is for foreign exchange earnings, such as export proceeds, under FEMA 10(R)/2015-RB. FDI share capital is converted into rupees and credited to the company's current account.

### Can the subsidiary open an EEFC account for payments from its parent?

Yes. A company resident in India can open an EEFC account with an AD bank and credit up to 100 percent of its foreign exchange earnings. Service fees billed to the parent qualify. The account is a non interest bearing current account. RBI's EEFC FAQ says monthly accruals are converted into rupees by the end of the next month, after approved uses.

### Is opening a bank account part of SPICe+ incorporation?

Yes, as an application. MCA's AGILE-PRO-S page says a new company filing Form INC-35 with SPICe+ must apply for a bank account through it. The application goes to a bank integrated with MCA. That bank still completes its own KYC under RBI's Directions, so the account is not open on incorporation.

### How long does it take to open a bank account for an Indian subsidiary?

No law sets a timeline. In our practice, we plan for about 30 calendar days from incorporation to an operational current account. KYC of foreign signatories and the registered office check take most of that time. Share capital, allotment within 60 days and FC-GPR within 30 days of the issue follow.

### Does a listed foreign parent need to disclose its beneficial owners to the bank?

Not always. Paragraph 38(1) of the KYC Directions exempts a customer whose controlling owner is listed in India. It also exempts one whose owner is resident and listed in a jurisdiction the Central Government notifies. A subsidiary of such a listed entity is exempt too. Where the parent's jurisdiction is not notified, the bank traces owners above 10 percent.

### Does the bank's beneficial owner check replace Form BEN-2?

No. The bank applies rule 9(3) of the PML Rules. The Significant Beneficial Owner test in section 90 of the Companies Act, 2013 is separate. The company still keeps its register and files Form BEN-2 with the Registrar. The two thresholds are close, more than 10 percent and at least 10 percent, but the tests differ.

### What is a KYC Identifier and why does the company need it?

It is the number the Central KYC Records Registry generates when a bank uploads the company's KYC. Paragraph 65 of RBI's KYC Directions requires banks to upload records for company accounts opened on or after 1 Apr 2021 within 10 days. The bank must pass the identifier to the company, and other regulated entities can use it.

### Can the resident director be the only signatory at first?

Yes, if the board resolution says so. Section 149(3) of the Companies Act, 2013 requires one resident director, who can usually complete Indian KYC fastest. The foreign directors can join as signatories or net banking approvers once their KYC clears. A fresh board resolution and KYC are needed for each added signatory.

### What happens if the share capital comes from a different company in the group?

The bank cannot treat it as the shareholder's investment, because the remitter is not the shareholder. It will hold the funds or ask for an explanation. The usual fix is to return the money and remit again from the shareholder's own account. The other option is to make the remitting entity a shareholder through a proper allotment.

## Sources

- Reserve Bank of India, Reserve Bank of India (Commercial Banks, Know Your Customer) Directions, 2025, RBI/DOR/2025-26/169, 28 Nov 2025, updated as on 1 Oct 2026, https://www.rbi.org.in/scripts/BS_ViewMasDirections.aspx?id=13141
- Reserve Bank of India, Foreign Exchange Management (Mode of Payment and Reporting of Non Debt Instruments) Regulations, 2019, FEMA 395/2019-RB, amended up to 13 Jun 2026, https://rbi.org.in/Scripts/NotificationUser.aspx?Id=11723&Mode=0
- Reserve Bank of India, Master Direction on Foreign Investment in India, updated as on 15 Jun 2026, https://www.rbi.org.in/scripts/bs_viewmasdirections.aspx?id=11200
- Reserve Bank of India, Master Direction on Reporting under Foreign Exchange Management Act, 1999, updated as on 1 Oct 2026, https://www.rbi.org.in/scripts/bs_viewmasdirections.aspx?id=10202
- Reserve Bank of India, Frequently Asked Questions on Exchange Earners' Foreign Currency (EEFC) Accounts, updated as on 5 Jul 2016, https://www.rbi.org.in/scripts/faqview.aspx?id=21
- Ministry of Corporate Affairs, AGILE-PRO-S (Form INC-35) page, https://www.mca.gov.in/MinistryV2/agile.html
- Ministry of Corporate Affairs, Companies Act, 2013, sections 10A, 39, 56, 90, 149 and 173, https://www.mca.gov.in
- Reserve Bank of India, A.P. (DIR Series) Circular No. 16, Late Submission Fee, 30 Sep 2022, https://www.rbi.org.in
- Income Tax Department, Income Tax Rules, 2026, rules 238, 239 and 240 (FATCA and CRS reporting), https://www.incometaxindia.gov.in/w/rule-238-1
- Income Tax Department, Income Tax Act, 2025, section 508, https://www.incometaxindia.gov.in/w/section-508-2
- Income Tax Department, FAQs and Guidance Notes on Forms as per Income Tax Rules, 2026 (Form 166, old Form 61B), https://www.incometaxindia.gov.in/faqs-and-guidance-notes-on-forms-as-per-income-tax-rules-2026
- Press Information Bureau, Ministry of Corporate Affairs Year Ender 2023 (Companies (Prospectus and Allotment of Securities) Second Amendment Rules, 2023, G.S.R. 802(E), 27 Oct 2023), https://www.pib.gov.in/PressReleasePage.aspx?PRID=1991275
- Prime Minister's Office, Cabinet approves changes in guidelines on investments from countries sharing land border with India, 10 Mar 2026, https://www.pmindia.gov.in/en/news_updates/cabinet-approves-changes-in-guidelines-on-investments-from-countries-sharing-land-border-with-india/

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