Setting Up Indian Wholly Owned Subsidiary

Setting Up Indian Wholly Owned Subsidiary | Bestar

Setting Up a Wholly Owned Subsidiary (WOS) registered as a Private Limited Company in India

Setting Up Indian Wholly Owned Subsidiary

Establishing a Wholly Owned Subsidiary (WOS) in India as a Private Limited Company is the most preferred route for foreign corporations seeking 100% control, limited liability, and a long-term presence in the world’s fastest-growing major economy.

This guide outlines the end-to-end process, legal requirements, and strategic benefits for setting up your WOS in 2026.

1. Why Choose a WOS Private Limited Company?

Unlike Liaison or Branch Offices, a WOS is a separate legal entity under the Indian Companies Act, 2013.

• 100% Ownership: No requirement for a local partner or shared equity.

  
  

• Operational Freedom: Ability to undertake a wider range of activities compared to a representative office.

  
  

• Ease of Repatriation: Profits and dividends can be repatriated to the parent company (subject to applicable taxes).

  
  

• Branding: Operates under its own name, allowing for localized branding while maintaining global standards.

2. Pre-Requisites for Incorporation

To register a Private Limited Company in India, you must meet these basic criteria:

Requirement	Description
Minimum Directors	At least two directors (individuals).
Resident Director	At least one director must be a resident of India (stayed ≥182 days in the previous year).
Minimum Shareholders	At least two shareholders (The parent company + one nominee to satisfy the 2-member rule).
Registered Office	Must have a physical address in India (commercial or residential).
Capital	No mandatory minimum capital (typically initialized with ₹100,000).

3. Step-by-Step Registration Process (2026)

Phase 1: Documentation & Digital Setup

1. Obtain DSC (Digital Signature Certificate): All directors must have a Class 3 DSC to sign electronic forms.

   
   

2. Apply for DIN (Director Identification Number): Applied through the SPICe+ form during incorporation.

   
   

3. Name Reservation: Submit the RUN (Reserve Unique Name) application. Foreign subsidiaries often use "[Parent Name] India Private Limited."

Phase 2: The SPICe+ Integrated Filing

The Ministry of Corporate Affairs (MCA) uses the SPICe+ portal, an integrated form that handles:

• Company Incorporation

• PAN (Permanent Account Number) & TAN (Tax Deduction Account Number)

• GST Registration (Optional)

• EPFO/ESIC Registration

• Bank Account Opening

Phase 3: Legalization of Foreign Documents

Since the parent company is outside India, all documents (Board Resolutions, MoA, AoA) must be:

• Apostilled (if the country is a member of the Hague Convention) OR

  
  

• Consularized (via the Indian Embassy in the home country).

4. Post-Incorporation Compliance

Once the Certificate of Incorporation (COI) is issued, the following steps are mandatory:

1. Inward Remittance: The parent company must remit the subscription money via an Authorized Dealer (AD) bank.

   
   

2. RBI Reporting (FC-GPR): Within 30 days of issuing shares, file Form FC-GPR on the FIRMS portal to report the Foreign Direct Investment (FDI).

   
   

3. Commencement of Business (Form INC-20A): Must be filed within 180 days, confirming that the initial capital has been deposited.

   
   

4. Statutory Auditor: Appoint an auditor within 30 days of incorporation.

5. Strategic Considerations

• Sectoral Caps: Most sectors fall under the "Automatic Route" (100% FDI allowed without government approval). Sensitive sectors like Defense or Media may require the "Government Route."

  
  

• Taxation: Indian WOS entities are taxed at domestic rates (approx. 25%). Ensure your structure accounts for Transfer Pricing if there are significant inter-company transactions.

  
  

• Location: Popular hubs for foreign subsidiaries include Bangalore (Tech), Gurgaon (Corporate/Manufacturing), and GIFT City (Financial Services/Special Economic Zone benefits).

Customized Checklist of Documents required for home countries and sectors

To successfully set up a Wholly Owned Subsidiary (WOS) in India, document requirements vary significantly based on your home country (due to legal certification treaties) and your business sector (due to specific licensing).

Below is the definitive 2026 checklist tailored for major global hubs and high-growth industries.

Part 1: Home Country-Specific Requirements

The way your documents are "legalized" depends on whether your home country is part of the Hague Apostille Convention.

Category A: Apostille Countries

(USA, UK, Germany, Australia, Japan, France, Singapore)

• Requirements: Documents must be notarized by a local Public Notary and then Apostilled by the relevant government department (e.g., Secretary of State in the US or FCDO in the UK).

  
  

• Key Doc: A "Certificate of Good Standing" is highly recommended to prove the parent company is active.

Category B: Non-Apostille / Consularization Countries

(UAE, Thailand, Vietnam, most of the Middle East)

• Requirements: Documents must undergo a "Chain of Authentication": Notary → Ministry of Foreign Affairs (Home Country) → Indian Embassy/Consulate.

  
  

• Translation: If the original documents are not in English (e.g., Vietnam or Germany), a certified English translation must be attached and legalized.

Part 2: Sector-Specific Additional Documents

While the basic incorporation is the same, these sectors require extra "GEO" (Growth & Entry Operations) filings:

1. IT / Software / SaaS

• STPI Registration: If you want to avail of duty-free imports of hardware.

  
  

• IP Transfer Agreement: Documenting how intellectual property created in India is owned or licensed by the parent.

  
  

• Data Privacy Policy: Compliance document aligning with India’s Digital Personal Data Protection (DPDP) Act.

2. Manufacturing & Electronics

• Pollution Board Consents: "Consent to Establish" (CTE) and "Consent to Operate" (CTO).

  
  

• Factory License: Blueprint of the factory premises approved by local authorities.

  
  

• EPR (Extended Producer Responsibility): Mandatory if your products involve plastic or e-waste.

3. Healthcare & Medical Devices

• CDSCO Registration: Mandatory for importing or manufacturing "notified" medical devices.

  
  

• Drug License: If the WOS handles pharmaceutical distribution.

  
  

• FSSAI License: If the subsidiary deals in "Nutraceuticals" or health supplements.

Part 3: The Master Document Checklist (Summary Table)

Document Type	Source	Legalization Required?
Certificate of Incorporation	Parent Co	Yes (Apostille/Consular)
Charter (MoA/AoA)	Parent Co	Yes (Apostille/Consular)
Board Resolution	Parent Co	Yes (Apostille/Consular)
Director's Passport	Directors	Yes (Apostille/Consular)
Director's Address Proof	Directors	Yes (Must be < 2 months old)
Registered Office Utility Bill	India	No (Must be < 2 months old)
Landlord NOC	India	No

Pro-Tip: The "KYC" Hurdle

In 2026, Indian banks have extremely strict KYC (Know Your Customer) norms for opening the WOS bank account. You will need:

1. Ultimate Beneficial Owner (UBO) Declaration: Identifying any individual holding >10% stake in the parent company.

   
   

2. FATCA/CRS Declaration: Tax residency forms for the parent entity.

How we can help you next:

The Memorandum of Association (MoA) must define your business "Object Clauses" perfectly to avoid future amendments.

Would you like a set of "Main Object Clauses" specific to your sector (IT, Manufacturing, or Consulting)?

How Bestar Asia can help you

Setting Up Indian Wholly Owned Subsidiary

Setting up a WOS involves precise documentation and strict timelines with the RBI.

In 2026, navigating the Indian regulatory landscape requires more than just filing forms—it requires a strategic partner who understands the intersection of RBI foreign exchange laws and MCA corporate governance.

Bestar Asia serves as your dedicated thought partner and execution lead, ensuring your entry into the Indian market is seamless, compliant, and optimized for growth.

How Bestar Asia Simplifies Your WOS Setup

Setting up a Wholly Owned Subsidiary involves high-stakes variables. We manage the "heavy lifting" so you can focus on your market entry strategy.

1. Precision in Documentation (CRO - Compliance Risk Optimization)

The most common cause for incorporation delays is "Object Clause" rejection or improper apostille.

• Apostille Management: We provide clear, country-specific instructions for your US/Global parent company documents to ensure they are accepted on the first attempt.

  
  

• Customized MoA/AoA: We draft your charter documents with "future-proof" clauses that cover 2026-specific digital and tech service activities.

2. RBI & FEMA Compliance (The Regulatory Shield)

Failing to report Foreign Direct Investment (FDI) can lead to heavy penalties.

• Form FC-GPR Filing: We manage the mandatory reporting to the RBI within 30 days of share allotment.

  
  

• FDI Route Advisory: We confirm your sector falls under the Automatic Route and handle any necessary "Government Route" approvals if required.

3. Integrated "One-Stop" Local Infrastructure

Bestar Asia doesn't just register the company; we build the foundation:

• Resident Director Services: We help you meet the legal requirement of having one resident director in India.

  
  

• Registered Office Solutions: Providing a premium commercial address for your statutory filings.

  
  

• Bank Account Concierge: We facilitate introductions with major Indian banks (ICICI, HDFC, HSBC) to expedite the capital remittance process.

Strategic Advantage: Why Bestar Asia?

The Challenge	The Bestar Asia Solution
Complex RBI Timelines	We track every milestone from FIRC receipt to FC-GPR filing.
Strict KYC Norms	We pre-audit your UBO (Ultimate Beneficial Owner) documents.
Sectoral Licensing	We identify and secure secondary licenses (GST, MSME, Professional Tax).
Transfer Pricing	Our tax experts advise on inter-company billing between Parent and WOS.

Our 2026 "Speed-to-Market" Commitment

We leverage the latest SPICe+ integrated filing system to ensure that your Certificate of Incorporation, PAN, and TAN are issued within 15–20 business days of document legalization.

Our Goal: To transform the daunting task of Indian incorporation into a predictable, transparent, and successful milestone for your global expansion.

Your Next Step to India:

Before you sign any lease or remit funds, it is vital to verify your FDI eligibility and HSN/SAC codes for taxation.

Would you like us to conduct a "Sectoral Feasibility Check" to ensure your specific business model qualifies for 100% FDI under the Automatic Route?

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