Incorporating A Wholly Owned Subsidiary (WOS) In India

For foreign companies looking to capitalise on the opportunities available in India, establishing a wholly owned subsidiary offers numerous benefits. Among the many options to incorporate a business, the wholly owned subsidiary is one of the most efficient ways for foreign companies to establish legal entity in India.

A wholly owned subsidiary defines a clear regulatory framework where foreign companies get maximum flexibility to conduct business while complying with domestic legal regulations. Additionally, as a wholly owned subsidiary, the business gets to retain 100% of the shareholding.

Stratrich Consulting provides expert guidance on setting up a wholly owned subsidiary in India, making it easy for foreign companies to establish legal presence. The team comprises experienced professionals well-versed in cross-border structuring and regulatory compliance. Our expert guidance assists businesses streamline their incorporation and set up their operations in Indian market.

Setting Up a Wholly Owned Subsidiary in India

In India, Wholly Owned Subsidiary can be set up either in the form of Private Limited company or Public Limited company. Of the two, formation of WOS in the form of a Private Limited company is more suitable.

The requirements for establishing a WOS in the form of Private Limited company in India are:

  • A private company must be incorporated with the minimum authorised and paid-up capital, capitalised within 2 months of incorporation.
  • At least two Members are required for the share capital.
  • At least two Directors are required out of which one must be resident of India.

The company’s Charter Documents (Memorandum and Articles of Association) must include:

  • Limitation on share transfer.
  • A maximum of 200 shareholders.
  • Prohibition on public subscription of its securities.
  • Foreign Direct Investment (FDI)
  • Up to 100% FDI is permitted in most sectors under the automatic route, requiring no prior government approval.
  • Post-incorporation filings must be made with the Reserve Bank of India (RBI).
  • Investments are routed through RBI-authorised banking channels, complying with share issuance pricing guidelines set by the RBI.
  • Incorporation of the Company with Ministry of Corporate Affairs (MCA)
  • All the required documents must be submitted to Ministry of Corporate Affairs (MCA) for company formation.
  • Once incorporated, the foreign holding company has a legally recognised wholly owned subsidiary in India.

Structure of a Wholly Owned Subsidiary

100% shares of the Wholly Owned Subsidiary must be held by the foreign parent company. For statutory purposes, two shareholders are mandatory:

  • The primary shareholder (foreign parent company) may hold 99.99% equity shares as both the registered and beneficial owner.
  • The second shareholder will just act as a nominee shareholder who doesn’t have any beneficial rights.

    • Benefits Of a Wholly Owned Subsidiary In India

    Establishing a wholly owned subsidiary is a viable option for foreign companies due to the following reasons:

    Full Control

    The foreign company has 100% control over the wholly owned Indian subsidiary, giving it the ability to implement strategies without interference.

    Tax Advantage

    These subsidiaries are eligible for various tax exemptions and incentives.

    Ease of Handling

    Wholly owned subsidiary is easy to handle in terms of finance and operations.

    Limited Liability

    Shareholders are only liable to their shareholding, protecting the assets of the parent company.

    How We Help Incorporate Your Wholly Owned Subsidiary?

    Stratrich Consulting specialises in assisting foreign companies and investors enter the Indian market to establish business operations. Our services for setting up a wholly owned subsidiary in India include:

  • Legal Advisory - Consultation with our legal experts to understand company formation options and financial implications.
  • Documentation Support - Preparation and filing of incorporation documents.                          
  • Regulatory Compliance - Ensuring compliance with Indian laws and regulations.                                             
  • Online and Offline Registration - Incorporation services and guidance for seamless offline and digital registration services.
  • Opening of Bank Account - Establish a local or foreign bank account for the wholly owned subsidiary.

    • Steps to Forming a Wholly Owned Subsidiary in India

    Pre-Registration Steps

    1. Step 1: Obtain Digital Signature Certificate (DSC)

    2. Step 2: Company Name Approval

    3. Step 3: Drafting of Memorandum of Association (MoA) and Articles of Association (AOA)

    4. Step 4: Filing of Incorporation Forms

    5. Step 5: Certificate of Incorporation

    6. Step 6: PAN, TAN and GST Registration

    7. Step 7: Business Bank Account

    Post-Registration Steps

    1. Step 1: Opening of Bank Account

    2. Step 2: Remittance of Subscription Amount

    3. Step 3: Allotment of Shares

    4. Step 4: Issue of Share Certificates

    5. Step 5: Reporting to the Reserve Bank of India (RBI)

    Why Choose Stratrich?

    • Single point access for pre-incorporation and post-incorporation compliance
    • Experienced team of Chartered Accountants, Company Secretaries and legal professionals
    • Complete handholding for foreign investors, stakeholders and NRIs
    • Provision for market research, recruitment and payroll management on a need basis
    • Smooth and efficient registration process with quick turnaround time

    Timeline for Incorporating Wholly Owned Subsidiary


    Approx. 15-20 working days
    getting incorporation certificate and PAN/TAN

    Approx 8-10 Working days
    for GST Registration

    Approx. 5 working days
    in opening bank account

    Approx. 25-30 days
    in all RBI compliances


    Frequently Asked Questions (FAQs)

    A Wholly Owned Subsidiary is a company in which a foreign company holds 100% of the shares. It is a legal entity offering limited liability and full control to the foreign company.

    Yes, a Wholly Owned Subsidiary in India allows foreign companies to have 100% ownership.

    It takes approximately 15 working days for the complete end-to-end registration of a Wholly Owned Subsidiary.

    Subsidiary and wholly-owned subsidiary are two different business structures.
    • A subsidiary is a business structure in which the parent company must hold a minimum of 51% of the subsidiary's shares.
    • A wholly owned subsidiary is a legal entity in which the parent company owns 100% of the shares.

    Some of the common reporting requirements for wholly owned subsidiaries in India include:

    • Financial statements (Annual ROC Filing)
    • Statutory Audits
    • Annual Tax returns
    • Regulatory filings
    • Corporate governance reports
    • Management reports
    • Foreign Exchange Management Act (FEMA) Compliance

    Yes. You can register a wholly owned subsidiary at a residential or commercial premises in India. A recent utility bill (not older than two months) and a No Objection Certificate (NOC) from the property owner are required.

    Yes, NRIs and foreign nationals can serve as directors and shareholders of a wholly owned subsidiary, provided the subsidiary has at least one resident Indian director.

    If the wholly owned subsidiary meets the applicable sales or turnover thresholds, it is required to register under the Goods and Services Tax (GST).

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