Wholly Owned Subsidiary
of Foreign Company in India

The foreign parent holds almost complete share, leaving nominal share which is held by a second shareholder as required under Indian company law. This second shareholder has no real stake or control over the organisation. They are simply a statutory requirement to meet the minimum two shareholder rule for private limited companies.

The registration process takes around 15 to 20 working days. The process starts with name approval, incorporation filings, and issue of the certificate along with PAN and TAN. GST registration and bank account setup happen after that. Overall, most foreign companies can expect their subsidiary to be fully operational, including RBI compliance, within four to six weeks. Delays happen when documents from the parent company need notarisation or apostille abroad.

The percentage of ownership is what sets these two apart. A subsidiary only needs the parent to hold more than 51% of shares, so other shareholders can still be part of the picture. They can vote, raise objections, and in some cases block decisions they don't agree with.

A wholly owned subsidiary works differently. The parent holds almost all the shares. There is no one else to consult before making a call. Board decisions, strategy, operations, all of it stays with the parent company alone. No minority shareholders mean no pushback and no need to have a discussion before moving forward with any decisions.

A WOS needs to file annual returns and financial statements with the Registrar of Companies. The company further needs to get its accounts audited, file income tax returns, and meet FEMA reporting norms with the RBI for foreign investment received. Corporate governance and management reports are also part of ongoing compliance. Depending on turnover and sector, transfer pricing documentation and GST filings may apply as well. Missing the deadlines can attract penalties. This is why most foreign parents outsource this to a local compliance team.

Yes, a business can register WOS at a residential address. To complete the registration process, you will need a recent utility bill that is no older than two months along with No Objection Certificate from the property owner. Many first-time founders start this way to save on office costs before scaling up. The address can be changed later once the business grows and needs a commercial space.

Yes. NRIs and foreign nationals can hold both director and shareholder positions in a wholly owned subsidiary. The one rule to keep in mind: at least one director on the board must be a resident of India, someone who has stayed in the country for a specified period during the previous year. This resident director doesn't need to hold shares or touch daily operations at all. Many foreign companies simply appoint a local professional to fill this seat and tick the compliance box.

It depends on turnover. Once the subsidiary crosses the applicable sales or turnover threshold set under GST law, registration becomes mandatory. Many subsidiaries register early anyway since it is often needed for invoicing, vendor onboarding, and day to day business operations. Even below the threshold, voluntary registration is common if the business plans to work with GST registered vendors or clients from the start.

There is no fixed minimum capital requirement for a wholly owned subsidiary in India mandated by the law. Founders can decide the authorised and paid-up capital based on business needs. However, the amount must be brought in within two months of incorporation. Banks and regulators sometimes expect a reasonable starting capital to support initial operations and compliance costs, as a result, most companies set a practical figure rather than a token amount.

Take a German auto parts company that opens a factory in Pune to supply its Indian customers. Or a UK fintech company that sets up an office in Bengaluru to build its product and serve clients across Asia.

Both examples work the same way. The Indian company handles daily operations on its own. The parent company abroad decides on strategy and ownership. This kind of setup is common in pharma, retail, and IT services too.

Setting a wholly owned subsidiary takes more time, cost, and compliance effort compared to simpler structures like a liaison office. There are also ongoing obligations around audits, ROC filings, and FEMA reporting, along with currency and repatriation rules that need attention throughout the year. Winding up the entity later, if ever needed, can also be a lengthy process. This makes the structure better suited to companies with a long-term commitment to the Indian market.

Get a Digital Signature Certificate first, then move to name approval with the MCA. Next comes drafting the MoA and AOA, followed by filing the incorporation forms. Once the certificate of incorporation arrives, you'll need to sort PAN, TAN, GST registration, and a bank account. After this, the parent company still has to remit the subscription amount, allot shares to shareholders, and file the RBI reporting before the subsidiary is fully compliant and operational.

Foreign firms get complete control over strategy and operations without needing a local partner. The structure offers limited liability protection, access to tax incentives, and a straightforward path to build a long term, credible presence in the Indian market. It also makes it easier to raise funds, enter contracts, and build trust with Indian customers and vendors compared to informal setups.

The company needs at least two shareholders and two directors. Among them, one director needs to be an Indian resident. A person who has stayed in India for more than 182 days in previous calendar year fits the requirement of being an Indian Resident. The MoA and AOA must limit share transfers, cap shareholders at 200, and prohibit public subscription. FDI must also comply with RBI reporting norms. Additionally, all incorporation documents from the foreign parent, such as board resolutions and identity proofs, need proper notarisation or apostille before filing with the MCA.