- Incorporating a wholly owned subsidiary in India takes about two to four weeks for the core registration, but full operational readiness with a bank account, capital remittance, and FEMA filings takes longer, and ongoing compliance is the real commitment.
- An India entity becomes worth it when the team crosses roughly 25 to 50 people and is permanent, where per-employee EOR fees start to exceed the cost of running your own subsidiary and you want full control of team, processes, and intellectual property.
- India allows 100% foreign ownership in most sectors, but an entity requires a resident Indian director, corporate tax filings at roughly 22 to 25%, transfer pricing documentation with the Australian parent, and annual filings with the Registrar of Companies.
- The most efficient post-Series-A move is to hire through an EOR now so funding goes into building the team, incorporate the entity in parallel or later once headcount justifies it, then transition employees into the entity when it is ready.
- Compliance to plan for includes the new Labour Codes effective November 21 2025, statutory contributions like Provident Fund and Employees' State Insurance, corporate tax, and transfer pricing, all of which apply from the moment the entity exists.
For an Australian startup that has just raised a Series A, the question of whether to set up an India entity comes down to team size, permanence, and how much compliance you are ready to own. Incorporating a wholly owned subsidiary in India is faster than most people expect, often two to four weeks for the paperwork, but the ongoing obligations, a mandatory resident director, transfer pricing, and annual filings, are a real commitment. For most post-Series-A startups with a small but growing India team, an Employer of Record is still the better fit until the headcount justifies the entity.
This guide explains when an India entity makes sense after a Series A, what it actually costs and requires, how it compares to an EOR, and how to sequence the move so your funding goes into building rather than into paperwork.
Should an Australian startup set up an India entity after Series A?
Set up an India entity after Series A only when your India team is large enough and permanent enough to justify the ongoing compliance and cost. A Series A gives you capital, but it does not automatically mean an entity is the right use of it. If you have a handful of India hires and expect steady growth, an Employer of Record usually delivers the same team faster and with far less overhead.
The entity becomes worth it when you cross a threshold, commonly around 25 to 50 people and rising, where the per-employee cost of an EOR starts to exceed the cost of running your own subsidiary, and where you want full control of the team, processes, and intellectual property. Below that, the entity's fixed costs and compliance load usually outweigh the benefits.
From our experience helping foreign companies enter India, the most common post-Series-A mistake is incorporating too early, then spending months on registration and compliance instead of hiring. Our guide on using an EOR before setting up an India entity covers this timing decision in depth.
How long does it take to set up an India entity?
Incorporating a wholly owned subsidiary in India typically takes about two to four weeks for the core registration, assuming your foreign documents are apostilled and in order. The company itself can exist fairly quickly, but full operational readiness, including the corporate bank account, capital remittance, and initial compliance filings, takes longer.
The main steps are:
- Obtain Digital Signature Certificates and Director Identification Numbers for the directors.
- Reserve the company name and file the SPICe+ incorporation form with the Ministry of Corporate Affairs.
- Receive the Certificate of Incorporation along with PAN and TAN, which makes the company legally exist.
- Open a corporate bank account, remit share capital from Australia, and complete FEMA reporting with the Reserve Bank of India.
Apostilling foreign documents alone can add two to six weeks, so plan for the registration to be one part of a longer path to a fully operational entity. An EOR, by comparison, can put your first hires live in about two weeks with none of this setup.
What does an India entity cost and require to maintain?
The initial incorporation of a private limited company in India is relatively inexpensive, but the ongoing compliance is where the real cost sits. India allows 100% foreign ownership in most sectors under the automatic route, so an Australian parent can fully own the subsidiary, but the entity must meet continuous obligations that need local expertise.
Table 1: Key requirements and obligations of an India subsidiary for an Australian startup.
| Requirement | What it means |
|---|---|
| Foreign ownership | 100% allowed in most sectors under the automatic route |
| Resident director | At least one director must be resident in India |
| Minimum capital | No statutory minimum; a nominal amount is typical |
| Corporate tax | Roughly 22 to 25% on profits depending on the regime chosen |
| Transfer pricing | Applies to transactions with the Australian parent; formal documentation once they cross the threshold |
| Ongoing compliance | Annual ROC filings, tax returns, payroll and statutory contributions |
Transactions between the Indian subsidiary and the Australian parent, such as service fees or shared costs, fall under transfer pricing rules, and formal documentation becomes mandatory once those transactions cross the prescribed threshold. This information is for general guidance, and you should consult legal and tax experts for your situation. Our guide to transfer pricing in India explains the parent-subsidiary side in detail.
How does an India entity compare to an EOR after Series A?
An India entity gives you full control and better per-employee economics at scale, while an EOR gives you speed, no setup, and no compliance burden, which usually wins for a post-Series-A team that is still growing. The right choice depends on how big and permanent your India team is.
Table 2: India entity vs EOR for a post-Series-A Australian startup.
| Factor | India entity | Employer of Record |
|---|---|---|
| Time to first hire | Weeks to months for full readiness | About two weeks |
| Upfront and fixed cost | Incorporation plus ongoing compliance | Per-employee monthly fee, no setup |
| Control | Full control of team and IP | You direct the work; provider is legal employer |
| Compliance burden | You own it, with local experts | Provider handles it |
| Best when | Team is large, stable, long-term | Team is small or still growing |
For a side-by-side of every operating model, our guide on the India operating model of EOR, GCC, and entity setup lays out the full picture.
Can you use an EOR now and set up the entity later?
Yes, and it is the approach we most often recommend for a post-Series-A startup. You hire your India team through an EOR immediately, so your funding goes into building the team right away, then you incorporate the entity in parallel or later once the headcount and permanence justify it. When the entity is ready, you transition the employees into it.
This sequencing avoids the biggest risk of committing capital to an entity before you know the India operation will scale. It also means you never lose hiring momentum to the registration timeline. One pattern we have consistently noticed is that Australian startups who start on an EOR and set up the entity when they cross the headcount threshold end up spending their Series A more efficiently than those who incorporate on day one. Our explainer on hiring via EOR while your India entity is being set up walks through the transition.
What compliance factors should an Australian startup plan for?
An Australian startup running an India entity needs to plan for corporate tax, transfer pricing, employment compliance, and ongoing statutory filings, all of which require local expertise. These obligations apply from the moment the entity exists, not just once it is profitable.
Key areas to plan for:
- India's four new Labour Codes, effective November 21, 2025, consolidate 29 earlier laws and include a rule that basic pay must be at least 50% of total compensation. These are central laws with some elements administered at the state level.
- Statutory contributions such as Provident Fund and Employees' State Insurance, managed at central and state levels, which apply to your India employees.
- Corporate tax filings and, for transactions with the Australian parent, transfer pricing documentation once the threshold is crossed.
- A mandatory resident Indian director and annual filings with the Registrar of Companies.
This information is for general guidance only, and you should consult legal and tax experts for your specific circumstances. Our overview of the new Labour Codes in India covers the employment side.
How Wisemonk helps you decide on an India entity after Series A
Wisemonk is an India-native Employer of Record that also supports entity setup, so we can help an Australian startup at either end of the decision. We can put your first hires on the ground in about two weeks through our EOR, handling compliant contracts, payroll, statutory benefits, and onboarding, and we can help you incorporate and run a subsidiary when your team is large enough to justify it.
Because we handle both, we can start you on an EOR so your Series A goes into building the team, then support the entity setup and the transition of employees into it when the headcount crosses the threshold. That keeps the decision reversible and your capital focused on growth. If you are an Australian startup weighing an India entity after Series A, we can help you time it right.
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Frequently asked questions
How long does it take to set up an India entity?
Core incorporation of a wholly owned subsidiary takes about two to four weeks with apostilled documents in order. Full operational readiness, including the corporate bank account, capital remittance, and FEMA filings, takes longer. An EOR can put hires live in about two weeks instead.
When should an Australian startup set up an India entity?
When the India team is large enough and permanent enough to justify the compliance and cost, commonly around 25 to 50 people and rising. Below that, an Employer of Record usually delivers the same team faster with far less overhead, so incorporating early is often premature.
Can an Australian company own 100% of an India subsidiary?
Yes, in most sectors under India's automatic route, meaning no prior government approval is needed. A few restricted sectors require government approval. The subsidiary is a separate Indian-resident legal entity, and it must have at least one director who is resident in India.
What ongoing compliance does an India entity require?
An India subsidiary must handle corporate tax filings at roughly 22 to 25%, transfer pricing documentation for transactions with the parent once the threshold is crossed, statutory contributions like Provident Fund and Employees' State Insurance, and annual filings with the Registrar of Companies.
Is an EOR or an entity better after Series A?
An EOR usually wins for a still-growing post-Series-A team because it offers speed, no setup, and no compliance burden. An entity gives full control and better economics once the team is large, stable, and long-term. Many startups start on an EOR and incorporate later.
Can I use an EOR and set up the entity later?
Yes. You hire through an EOR immediately so your funding goes into the team, incorporate the entity in parallel or later once headcount justifies it, then transition employees into it. This avoids losing hiring momentum to the registration timeline and keeps the decision reversible.
Does Wisemonk help with India entity setup?
Yes. Wisemonk is an India-native EOR that also supports entity setup, so we can start your team on an EOR in about two weeks and help you incorporate and run a subsidiary when your team is large enough, including transitioning employees from the EOR into your entity.
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