Virtual CFO services for foreign subsidiaries in India

A virtual CFO is a part time finance lead for the Indian company. For a foreign subsidiary, the role sits between the Indian books and the parent's finance team. It covers parent reporting, budgets, cash, tax payments, transfer pricing, FEMA reporting and the board calendar.

No law requires a Private Limited company to appoint a CFO. Section 203 of the Companies Act, 2013 requires whole time key managerial personnel only in listed companies and prescribed public companies. Liability still carries a name.

Section 128(6) fines the managing director, the CFO or the person the board charged with keeping the books. Section 137(3) does the same for late financial statements. So the board should record who carries those duties.

Our job is to give that person the numbers, the calendar and the filings on time. The company keeps its approvals, and a separately appointed professional signs statutory reports, as the questions on this page explain.

No Indian law prescribes an MIS format. The parent sets it, and the Indian ledger has to support every line. We build the pack from the reconciled trial balance, so its numbers agree with what the statutory auditor sees.

Source: Krystal7 MIS template; Companies Act, 2013, section 128 for the underlying books (read 26 Oct 2026).

The pack follows one exchange rate policy, agreed with the parent. Indian books restate monetary items at the closing rate, while the group may translate profit and loss at an average rate. We show both, so the parent can trace every rupee. Our MIS report format for an Indian subsidiary has a sample layout.

Take an IT services subsidiary that bills its parent at cost plus 15.5 percent, the safe harbour margin under rule 89. Its operating expense for tax year 2026-27 is ₹5,00,00,000. It has no other income, and it pays tax under section 200 at 22 percent plus a 10 percent surcharge and 4 percent cess. That gives an effective rate of 25.168 percent.

The markup gives taxable profit of ₹77,50,000. Tax at 25.168 percent is ₹19,50,520. We assume no tax is deducted from the parent's payments, so advance tax covers the full amount.

Source: Income Tax Act, 2025, section 408 (read 26 Oct 2026). Assumed figures for illustration; the rate assumes the company stays under section 200.

In our MIS we show these four payments as fixed cash lines from April. If the cost base grows during the year, we raise the estimate before the next instalment, because interest under section 425 runs on each shortfall.

A foreign owned subsidiary holds at least four board meetings a year, with no more than 120 days between two meetings. The first falls within 30 days of incorporation. Section 173 of the Companies Act, 2013 sets these rules.

A subsidiary cannot be a small company under section 2(85). So the half yearly relaxation in section 173(5) does not help it, unless the company holds DPIIT startup recognition.

Directors abroad can attend by video conference and count for quorum. Notice goes out at least seven days ahead, so we send the pack with it. Our page on board meetings with non resident directors covers the procedure.

Source: Companies Act, 2013, sections 92, 96, 134, 137, 139, 173 and 188; Companies (Accounts) Rules, 2014, rule 8(2) (read 26 Oct 2026).

Each pack carries the quarter's MIS, a compliance status list, a cash forecast and the approvals the board must give. Related party contracts with the parent go into Form AOC-2 with the board's report. The AGM falls within six months of the year end under section 96. AOC-4 follows within 30 days of the AGM and MGT-7 within 60 days.

1. A budget on the parent's calendar year only. Fix: budget April to March as well, so advance tax and the transfer pricing year match.
2. One margin check a year. Fix: track the transfer pricing margin in every MIS and raise true ups before 31 March.
3. Share capital sent before the board is ready to allot. Fix: plan the allotment so shares issue within 60 days of receipt and FC-GPR follows within 30 days.
4. Two board meetings a year in a subsidiary. Fix: hold four, no more than 120 days apart, because a subsidiary is never a small company.
5. Export receivables from the parent left open for months. Fix: collect within nine months of the invoice date, or ask the bank for an extension in time.
6. A parent loan drawn before the loan registration number arrives. Fix: obtain the number first, then draw down.
7. No named officer for books and filings. Fix: record in a board resolution who carries the duty under sections 128 and 137.