Exit Guide
How to Close an India Subsidiary
Exiting India cleanly matters as much as entering. Whether you strike off a dormant company or liquidate an operating one, the tax, FEMA and ROC steps must line up to repatriate surplus without penalties.
When to close — and the two routes
| Feature | Strike-off (STK-2) | Voluntary liquidation |
|---|---|---|
| Use when | Dormant / no liabilities | Has assets / creditors |
| Process | MCA Form STK-2 | Insolvency professional under IBC |
| Timeline | A few months | Longer |
| Best for | Simple closure | Complex wind-down |
Fast-track strike-off (STK-2)
- No ongoing operations or liabilities
- Board and shareholder approvals
- Settle all outstanding dues
- File Form STK-2 with statement of accounts and affidavits
- ROC strikes the company off the register
Voluntary liquidation (IBC)
For companies with assets or creditors, voluntary liquidation is run by an insolvency professional appointed by the members. The professional realises assets, settles creditors in the statutory waterfall, distributes any surplus to shareholders and obtains the dissolution order.
Tax & final filings
- File the final income-tax return
- Close pending assessments and appeals
- File final TDS and GST returns
- Surrender GST, PAN-linked and other registrations
FEMA & repatriating surplus
Remaining surplus can be remitted to the foreign parent through the AD bank with Form 15CA/15CB and FEMA compliance. Where the entity was funded by NRI investment, see NRI investment & FEMA compliance for the repatriation routing.
Timelines & common pitfalls
- Unsettled statutory or trade dues
- Open litigation or assessments
- Incomplete ROC / tax / FEMA filings
- Blocked repatriation due to missing 15CA/15CB
Before either route starts, the board should approve the closure plan, the shareholders should pass the required resolution, and every employee settlement — final salary, gratuity under the Payment of Gratuity Act, 1972, leave encashment and Provident Fund withdrawal or transfer — should be completed and documented. GST registration must be cancelled separately on the GST portal with a final return, and any import-export code, Shops & Establishments registration and professional tax registration surrendered. Bank accounts are closed only after the last statutory payment and the final remittance to the parent have cleared.
Plan for the strike-off route to take several months from application to the RoC notice in the Official Gazette, and for voluntary liquidation under Section 59 of the Insolvency and Bankruptcy Code, 2016 to take longer because of the liquidator's process and the final NCLT order. Directors remain responsible for any liability discovered later, so keeping a complete closure file — accounts, tax clearances, FEMA filings and board records — protects the foreign parent after the company ceases to exist.
Frequently asked questions
What are the ways to close a company in India?
What is the difference between strike-off and liquidation?
Can a foreign parent repatriate the remaining funds when closing an India subsidiary?
How long does it take to close an Indian company?
Reviewed by CA Regi Tom Antony, Regi Tom Antony & Associates. Last updated: October 2026.
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