How to Set Up a Wholly Owned Subsidiary Company in India: The Complete Guide 2026
- Deo & Associates
- 3 days ago
- 10 min read
A Complete Step-by-Step Guide to Registering a Wholly Owned Subsidiary Company in India
India is still one of the best places for multinational businesses to grow. India is becoming the next big thing for foreign corporations because it has a huge consumer base, a business-friendly regulatory framework, and a GDP growth rate of 6.7–6.8% in 2026 and beyond. Registering a Wholly Owned Subsidiary (WOS) company is one of the best ways to get into the Indian market.This detailed tutorial covers all you need to know about starting a WOS in India, including how to comprehend the legislative framework, how to complete the SPICe+ incorporation procedure, and how to meet your compliance duties after registration
What is a company that is a wholly owned subsidiary?
A wholly owned subsidiary is a business where the foreign parent firm holds all of the shares. The parent firm has full control over the Indian entity's strategy and operations with this arrangement. Under the Companies Act of 2013, the subsidiary is a separate legal entity and is considered as an Indian business for all tax and regulatory reasons.
A subsidiary is different from a wholly owned subsidiary.
It's important to know the difference between a standard subsidiary and a completely owned subsidiary in order to make the best investment choice:
Feature | Subsidiary Company | Wholly Owned Subsidiary |
Ownership | Parent holds >50% shares | Parent holds 100% shares |
Control | Majority control | Complete control |
Decision Making | Shared with minority holders | Exclusively by parent |
Profit Repatriation | Proportional to shareholding | Full profits to parent |
FDI Requirement | Sector-specific limits apply | 100% FDI must be allowed |
Shareholder Requirement Under Indian Law
The Companies Act of 2013 says that any Indian corporation must have at least two shareholders. In a WOS structure, the foreign parent company owns 99.99% of the shares through its authorised agent, while a nominee holds the other 0.01% on behalf of the parent business. The nominee can be a citizen of India or another country.
Why Register a Wholly Owned Subsidiary in India?
India has a lot of good reasons for international corporations to set up a totally owned subsidiary there:
Full Control of Operations
The parent firm has full control over corporate operations, financial planning, growth strategies, and management choices, and it doesn't need the approval of local partners to do these things..
Protection against Limited Liability
The WOS is a separate legal organization, therefore the parent firm is only responsible for the money it has invested. This protects the parent company from unexpected financial hazards that may come up in the Indian subsidiary.
Tax breaks and perks
The Income Tax Act of 1961 says that wholly owned subsidiaries are Indian corporations. This means they can take use of the same tax breaks, vacations, and deductions that Indian companies can. Good tax preparation can greatly increase profits.
Access to the market and trustworthiness
Having a registered Indian company makes you more trustworthy with clients, suppliers, government agencies, and banks in India. A WOS can take part in Indian contracts, government bids, and business alliances that may not be open to foreign companies that work from afar.
A welcoming environment for FDI
The Foreign Exchange Management Act (FEMA) of 1999 sets the rules for India's foreign direct investment (FDI) policy. It permits 100% foreign direct investment in most sectors through the automatic route, which makes the registration procedure very easy.
Legal Framework Governing WOS Registration in India
The registration and operation of a wholly owned subsidiary in India is primarily governed by the following legislation:
• Companies Act, 2013 – Governs incorporation, corporate governance, and compliance obligations
• Foreign Exchange Management Act (FEMA), 1999 – Regulates foreign investment, capital flows, and repatriation
• FDI Policy (Consolidated FDI Policy Circular) – Defines sector-specific caps and approval routes
• Income Tax Act, 1961 – Governs taxation, transfer pricing, and tax benefits
• Reserve Bank of India (RBI) Regulations – Oversees foreign exchange transactions and reporting
Prerequisites for Registering a WOS in India
Before beginning the incorporation process, foreign companies must ensure they meet the following requirements:
FDI Eligibility
India's FDI policy says that the business sector must enable 100% FDI. Most industries, including as IT, manufacturing, e-commerce (marketplace model), and professional services, allow 100% FDI through the automatic route without needing government approval first. Some industries, such as defence, telecommunications, insurance, and media, have sectoral limits and may need government clearance.
Minimum Directors and Shareholders
• Minimum 2 directors (at least 1 must be an Indian resident – i.e., a person who has stayed in India for at least 182 days in the preceding calendar year)
• Minimum 2 shareholders (the parent company and a nominee)
• Directors must obtain a Director Identification Number (DIN)
• At least one director must obtain a Digital Signature Certificate (DSC)
Registered Office
The company must have a registered office situated in India, capable of receiving all official communications and notices from regulatory authorities.
Documents Required for WOS Registration
Preparing the right documentation is critical for a smooth registration process. The documents required include:
From the Foreign Parent Company
• Certified copy of the Certificate of Incorporation of the parent company
• Board Resolution authorising the establishment of a subsidiary in India
• Memorandum and Articles of Association (MOA/AOA) of the parent company
• Proof of registered office address of the parent company
• Power of Attorney in favour of the authorised representative in India
From the Proposed Directors
• Passport copies of all proposed directors (mandatory for foreign directors)
• Address proof – Bank statement, utility bill, or telephone bill (not older than 2 months)
• Passport-size photographs
• Director Identification Number (DIN) application
• Digital Signature Certificate (DSC) for at least one director
For the Registered Office in India
• Sale deed or property deed (for owned premises) or lease/rent agreement (for rented premises)
• No Objection Certificate (NOC) from the property owner
• Utility bill of the registered office (electricity, telephone, or gas bill – not older than 2 months)
Apostille/Notarisation Requirement
People who live outside of India must get their documents apostilled (for Hague Convention countries) or notarised and certified by the Indian Embassy or Consulate in the country where they live. Foreign corporations can't use an e-MOA or e-AOA; they need to prepare and correctly sign a physical MOA and AOA.
Step-by-Step Process to Register a Wholly Owned Subsidiary in India
The Ministry of Corporate Affairs (MCA) set up the unified SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) framework for setting up a WOS. Here is how to do it step by step:
Step 1: Obtain Digital Signature Certificate (DSC)
You need a DSC to electronically sign all the incorporation papers you send to the MCA. At least one prospective director must get a Class 3 DSC from a certifying authority that the Controller of Certifying Authorities recognises. Foreign directors can get DSC from agencies that are allowed to do so in their own country.
Step 2: Apply for Director Identification Number (DIN)
The MCA gives each proposed director a unique identifying number called a DIN. You can apply for DINs for the first three directors right inside the SPICe+ form when you set up the company.
Step 3: Name Reservation via RUN (Reserve Unique Name)
Use the MCA's RUN web service to send in a name reservation request. The name you want to use for your business must be different from any other registered company or brand. You can suggest up to two names in one application. The MCA usually decides whether to accept or reject the name within two to three business days.
Step 4: Prepare MOA and AOA
Make the Memorandum of Association (MOA) and Articles of Association (AOA) according to the Companies Act, 2013. Because the subscribers are people or companies from other countries, the MOA and AOA must be written up, signed, and apostilled or notarised as needed. The MOA lists the firm's goals, authorised share capital, and subscriber information. The AOA, on the other hand, lays out the regulations for how the company will be run.
Step 5: File SPICe+ Incorporation Form
The SPICe+ form is a unified application that integrates multiple registrations into a single filing. It combines the following:
• Company incorporation and allocation of Corporate Identity Number (CIN)
• PAN (Permanent Account Number) application
• TAN (Tax Deduction Account Number) application
• GST registration (if applicable at the time of incorporation)
• EPFO (Employees’ Provident Fund Organisation) registration
• ESIC (Employees’ State Insurance Corporation) registration
• Bank account opening request
• Professional Tax registration (in applicable states)
Step 6: Payment of Government Fees
The government charges between ₹13,000 and ₹15,000 for SPICe+ filing, depending on the amount of permitted share capital. The MCA portal lets you pay stamp duty online, and the amount varies by state.
Step 7: Certificate of Incorporation
The Registrar of Companies (ROC) checks and approves the firm, which then gets its Certificate of Incorporation, CIN, PAN, and TAN. It usually takes 15 to 30 business days to get the certificate, from preparing the documents to getting it.
Post-Incorporation Compliance Obligations
Receiving the Certificate of Incorporation is only the beginning. A wholly owned subsidiary in India must comply with an extensive regulatory framework on an ongoing basis:
Immediate Post-Incorporation Steps
1. Open a company bank account in India with a scheduled bank
2. Receive initial share capital from the parent company into the Indian bank account
3. File FC-GPR (Foreign Currency – Gross Provisional Return) with the RBI within 30 days of share allotment
4. Issue share certificates to subscribers
5. Appoint a statutory auditor within 30 days of incorporation
6. Register under GST if turnover thresholds apply or if the business involves inter-state supply
7. Register under the Shops and Establishments Act of the relevant state
Annual Compliance Requirements
Under the Companies Act, 2013
• Annual returns (Form AOC-4) and financial statements must be filed within 30 days of the Annual General Meeting (AGM)
• Director’s report and board meeting minutes
• Maintenance of statutory registers (members, directors, charges)
• Annual return filing with the ROC
Tax Compliance
• Corporate income tax returns due by 30th November (for transfer pricing cases) or 31st October
• Advance tax payments on a quarterly basis
• Transfer pricing documentation and reporting (if transactions with parent company)
• TDS (Tax Deducted at Source) returns filed quarterly
GST Compliance
• Monthly/quarterly GST returns (GSTR-1, GSTR-3B)
• Annual GST return (GSTR-9) and reconciliation statement (GSTR-9C)
FEMA/RBI Compliance
• Annual Return on Foreign Liabilities and Assets (FLA Return) to the RBI
• Reporting of foreign investment transactions
Estimated Cost of WOS Registration in India
The cost of registering a wholly owned subsidiary varies based on authorised capital, state of incorporation, and whether professional advisors are engaged. Here is an approximate cost breakdown:
Cost Component | Approximate Cost (INR) |
Government fees (SPICe+ filing) | ₹13,000 – 15,000 |
Digital Signature Certificate (DSC) | ₹1,500 – 3,000 per director |
Stamp duty (varies by state) | ₹5,000 – 25,000 |
Notarisation/Apostille of documents | ₹10,000 – 30,000 |
Professional fees (CA/CS/Lawyer) | ₹50,000 – 2,00,000 |
Registered office setup | Variable |
Total Estimated Range | ₹80,000 – 3,00,000+ |
Timeline for WOS Registration
Stage | Estimated Duration |
DSC and DIN application | 2–3 working days |
Name reservation (RUN) | 2–3 working days |
Document preparation and apostille | 7–15 working days |
SPICe+ filing and approval | 5–7 working days |
Post-incorporation setup (bank account, RBI filing) | 7–10 working days |
Total (end to end) | 25–40 working days |
Common Mistakes to Avoid When Registering a WOS in India
1. Incorrect sector classification – Ensure the proposed business activity falls under a sector permitting 100% FDI under the automatic route.
2. Incomplete apostille/notarisation – Improperly attested documents are the most common reason for delays and rejections.
3. Not appointing a resident director early – At least one director must meet the 182-day residency requirement.
4. Ignoring post-incorporation RBI filings – Failure to file FC-GPR within 30 days can attract penalties.
5. Choosing an unsuitable company name – Names that are identical or similar to existing trademarks or companies will be rejected.
6. Underestimating ongoing compliance – India’s compliance framework is comprehensive; engage professional advisors from the outset.
Frequently Asked Questions (FAQs)
Can a foreign company own 100% of an Indian subsidiary?
Yes, a foreign company can incorporate a WOS in India with 100% ownership, provided the sector allows 100% FDI. Since Indian law requires a minimum of two shareholders, a nominee holds a token share (0.01%) on behalf of the parent company.
What is the minimum capital required to register a WOS in India?
There is no prescribed minimum capital requirement under the Companies Act, 2013, for a private limited company. However, the initial capitalisation should be adequate for the business operations and meet any sector-specific regulatory requirements.
Can foreign nationals be directors of the Indian subsidiary?
Yes, people from other countries can be directors. At least one director, on the other hand, must live in India (that is, they must have lived in India for at least 182 days in the previous calendar year).
What is the difference between a branch office and a WOS?
A branch office is not a separate legal organization; it is an extension of the overseas parent firm. A WOS is an Indian corporation that is separate from other companies, has its own legal identity, limited liability protection, and more freedom to run its business. A WOS can do more business than a branch office can.
How long does it take to register everything?
The whole process, from getting the papers ready to getting the Certificate of Incorporation and finishing all the paperwork that needs to be done after incorporation, usually takes 25 to 40 business days. This depends on how ready the papers are and how long it takes for the government to process them.
Do you need RBI approval to start a WOS?
In industries where 100% FDI is allowed through the automatic method, you don't need to get permission from the RBI or the government first. The RBI gets information about foreign investment through post-facto filings (FC-GPR). For sectors with FDI caps or that need government route clearance, the ministry in charge and/or the RBI may need to give their approval first.
Conclusion
One of the smartest things a foreign company can do to get into the Indian market is to set up a wholly owned subsidiary there. The WOS structure gives you the best control, limited liability protection, tax benefits, and the chance to build your business in one of the world's fastest-growing economies.
The Companies Act, FEMA rules, FDI policy, and RBI compliance are all part of the process, but the unified SPICe+ platform has made the incorporation process much easier. Your business can start operating in India in 4 to 6 weeks if you plan ahead, keep precise records, and get professional advice.
We highly recommend using chartered accountants, company secretaries, or lawyers who are experts in foreign investment and company registration in India. Their knowledge will help you avoid expensive mistakes and save you a lot of time
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