A foreign subsidiary is a corporation that is owned in part by another company from another country. A subsidiary company is occasionally known as a daughter company. The holding company, sometimes known as the parent company, is the company that owns the foreign entity. Even if a parent firm owns 100% of a daughter company, they are not the same entity. In terms of tax and responsibility, the subsidiary is a distinct legal entity from the holding company. .

A business must be registered in India in order to be considered an international affiliate company in India. It makes no difference where the parent corporation is incorporated.

Compliance is based on many aspects of the business. Both compliances must be met according to the type of business that is organized, the industry of operations, the annual turnover, and the number of employees. A foreign business is specified in Section 2(42) of the Companies Act, 2013, and such a company shall obey regulations and rules imposed under multiple statutes and orders, including: – Companies Act, 2013 – Income Tax Act, 1961 – GST, 2017 – SEBI rules and regulations – FEMA (Foreign Exchange Management Act) of 1999 – RBI compliances, and so on.