India Entry AdvisoryAn Infodit Group entity

Entity Guide

Wholly Owned Subsidiary in India (WOS)

A wholly owned subsidiary is the most common way foreign companies enter India — a private limited company, 100% owned by the overseas parent, under the automatic FDI route.

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In short: A wholly owned subsidiary (WOS) is a private limited company 100% owned by a foreign parent, permitted under the automatic FDI route in most sectors. It needs at least 2 directors (one resident in India), 2 shareholders (the parent plus a nominee), has no minimum capital, and is incorporated via MCA SPICe+ in about 2–4 weeks — followed by FC-GPR reporting to the RBI within 30 days of share allotment.

What is a wholly owned subsidiary?

A WOS is an Indian private limited company whose entire share capital is held by a foreign parent (with a nominee holding one share to meet the two-member requirement). It is treated as an Indian resident company for tax purposes and can carry on full commercial activity — unlike a liaison, branch or project office, which is restricted to specific activities under the FEMA route.

Eligibility & requirements

  • Minimum 2 directors, of whom at least 1 must be resident in India (stayed in India for 182+ days)
  • 2 shareholders — the foreign parent plus a nominee holding 1 share
  • No statutory minimum paid-up capital
  • A registered office in India (rent agreement, NOC and utility bill)
  • Apostilled / consularised parent documents (Board resolution, CoI, ID) and director passports

How to set up a WOS — step by step

  1. 1

    Digital Signature Certificate (DSC)

    Class 3 DSCs for every proposed director and subscriber — 1–2 working days.

  2. 2

    Name reservation (SPICe+ Part A)

    Two proposed names checked against MCA and trademark databases before filing.

  3. 3

    MOA / AOA + DIN allotment

    Draft Memorandum and Articles of Association aligned to the parent's objects; DINs are allotted through SPICe+.

  4. 4

    SPICe+ Part B + AGILE-PRO + INC-9

    Integrated filing for incorporation, PAN, TAN, GSTIN, EPFO, ESIC and bank account.

  5. 5

    Certificate of Incorporation

    MCA issues the CoI with CIN, PAN and TAN electronically.

  6. 6

    Bank account + INC-20A

    Open the current account, remit share subscription and file INC-20A before commencing business.

  7. 7

    FC-GPR filing to RBI

    Report the issue of shares to the foreign parent on the FIRMS portal within 30 days of allotment, with a FEMA valuation certificate.

FDI route & FEMA compliance

Most sectors allow 100% FDI under the automatic route — no prior government approval. Post-allotment, the company files FC-GPR on the RBI FIRMS portal (Single Master Form) within 30 days, supported by a share-valuation certificate under FEMA pricing guidelines by a SEBI-registered merchant banker or Chartered Accountant. An annual Foreign Liabilities and Assets (FLA) return is filed with the RBI. Confirm your sector on FDI entry routes and sector caps.

The two FEMA reporting anchors are FC-GPR within 30 days of allotment under the FEMA (Non-debt Instruments) Rules, 2019 and the annual FLA return by 15 July, filed by every Indian company holding foreign investment (position as of 2026). Both sit inside the wider year-one stack set out in our annual compliance calendar for a foreign subsidiary.

Repatriation, withholding tax and PE risk

Profits reach the foreign parent chiefly as dividends, which are freely remittable under the automatic route once Indian taxes are paid. Dividend, royalty, interest and service payments to a non-resident are subject to withholding under Section 195 of the Income-tax Act, 1961 — the domestic rate applies unless a lower treaty rate is claimed with a Tax Residency Certificate and Form 10F, and Form 15CA/15CB accompanies the remittance. See profit repatriation from India and withholding tax on foreign remittances.

A WOS is a separate Indian taxpayer, so it is not by itself a permanent establishment of the parent. PE exposure builds where parent employees negotiate or conclude contracts in India, or the subsidiary functions as a dependent agent — assessed under Section 9 of the Income-tax Act, 1961 and the relevant treaty article. Where the structure is borderline, compare vehicles on branch vs liaison vs project office vs subsidiary.

Intra-group charges — management fees, cost recharges, royalties, group loans — are international transactions with associated enterprises and must be priced at arm’s length under Sections 92 to 92F. The company files an accountant’s report in Form 3CEB and maintains contemporaneous transfer-pricing documentation for the year.

WOS vs Joint Venture

FeatureWOSJoint Venture
Ownership100% foreignShared with an Indian partner
ControlFullShared — subject to shareholders’ agreement
Local market access / partnerBuilt in-houseComes with the partner
Best forFull control, IP-led and technology businessesRegulated or capped sectors, local distribution

Post-incorporation compliance

  • INC-20A commencement of business declaration
  • GST registration where applicable
  • Professional tax registration (state-specific — Delhi and Haryana levy none)
  • TDS registration and monthly deposits
  • Board meetings, statutory registers and annual ROC filings
  • Statutory audit and transfer-pricing study each year
  • Form 3CEB for international related-party transactions
  • Annual FLA return to the RBI by 15 July

We coordinate all of the above under India post-entry support.

Frequently asked questions

Can a foreign company own 100% of an Indian subsidiary?
Yes. In most sectors 100% foreign ownership is allowed under the automatic FDI route, so a foreign parent can hold a wholly owned subsidiary without prior government approval — only post-allotment FC-GPR reporting to the RBI is required.
How many directors and shareholders does a WOS need?
At least two directors — one of whom must be resident in India — and two shareholders. The foreign parent holds the shares, with one nominee shareholder holding a single share to meet the two-member requirement.
Is there a minimum capital for a wholly owned subsidiary in India?
No. There is no statutory minimum paid-up capital; you set the capital to suit your business plan and FEMA pricing requirements.
How long does it take to set up a WOS?
Incorporation via SPICe+ typically takes 7–10 working days with documents ready; including bank account and FC-GPR reporting, plan for about 2–4 weeks, or 4–8 weeks fully operational.
What is FC-GPR and when is it filed?
FC-GPR is the RBI filing that reports the issue of shares to a foreign investor. It must be filed on the RBI FIRMS portal (Single Master Form) within 30 days of share allotment, supported by a valuation certificate.
How does a WOS repatriate profit to its foreign parent?
Mainly as dividends, which are freely remittable under the automatic route once taxes are paid. Dividends to a non-resident shareholder attract withholding under Section 195 of the Income-tax Act 1961 (20% plus surcharge and cess, reduced by treaty rate on a valid Tax Residency Certificate and Form 10F), with Form 15CA/15CB before remittance.
Does a subsidiary create a permanent establishment for the parent?
A subsidiary is a separate taxpayer and is not automatically a permanent establishment of the parent. PE risk arises where parent personnel habitually conclude contracts in India, or the subsidiary acts as a dependent agent — tested under Section 9 of the Income-tax Act 1961 and the applicable tax treaty.
When does transfer pricing and Form 3CEB apply?
Any international transaction with an associated enterprise — management fees, royalties, cost recharges, intra-group loans — must be at arm's length under Sections 92 to 92F. An accountant's report in Form 3CEB is filed for the year in which such transactions occur, alongside the required transfer-pricing documentation.

Last reviewed: July 2026 · Reviewed by CA Regi Tom Antony, Regi Tom Antony & Associates.

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