India is one of the most attractive destinations for foreign investors due to its vast market, strong economic growth, and government incentives. Many foreign companies choose to establish a wholly owned subsidiary in India to expand their operations and tap into local opportunities. A wholly owned subsidiary is a company incorporated in India where 100% of the shareholding is owned by a foreign entity.
Vera Causa Legal (VCL), a premier legal consultancy, specializes in assisting businesses with Foreign Company Registration in India. Whether you need assistance with documentation, compliance, or legal advisory, VCL provides seamless Online Company Registration in Noida and across India.
This guide provides a detailed step-by-step process on how to incorporate a wholly owned subsidiary in India and how VCL can assist you in simplifying the process.
What Is A Wholly Owned Subsidiary?
A wholly owned subsidiary is a private limited company where all shares are held by a foreign company. This setup allows the parent company to have complete control over operations, policies, and decision-making processes in India. Foreign entities establish a wholly owned subsidiary to maintain full control over their Indian operations while benefiting from limited liability protection and operational independence.
Benefits of Setting Up A Wholly Owned Subsidiary in India
- Full Control: The foreign parent company has 100% control over the Indian entity.
- Limited Liability: Shareholders are only liable to the extent of their shareholding.
- Tax Benefits: Companies enjoy various tax exemptions and incentives.
- Legal Recognition: A registered wholly owned subsidiary is recognized as a separate legal entity.
- Expansion Opportunities: India offers a massive market for growth and investment.
Legal Framework for Wholly Owned Subsidiaries in India
A wholly owned subsidiary in India operates under the provisions of:
- Companies Act, 2013
- Foreign Exchange Management Act (FEMA), 1999
- Foreign Direct Investment (FDI) Policy
As per India’s FDI Policy, foreign companies can invest 100% in most sectors without prior approval from the Reserve Bank of India (RBI), except for restricted sectors that require government approval.
Step-by-Step Process to Incorporate A Wholly Owned Subsidiary
- Obtain Digital Signature Certificate (DSC)
The first step is to obtain a DSC for the directors. This is necessary for electronic document signing during company registration.
- Acquire Director Identification Number (DIN)
All directors must have a DIN, which can be applied for online through the Ministry of Corporate Affairs (MCA) portal.
- Name Approval through RUN (Reserve Unique Name)
The proposed name of the wholly owned subsidiary must be unique and comply with the Companies Act. A name approval application is filed with the Registrar of Companies (ROC) using the RUN service.
- Drafting of Memorandum of Association (MoA) and Articles of Association (AoA)
The MoA and AoA define the company’s objectives, structure, and operational framework.
- Filing of Incorporation Forms
The incorporation application must be filed using SPICe+ Form on the MCA portal. Required documents include:
- Identity and address proof of directors
- MoA and AoA
- Address proof of the registered office
- Certificate of Incorporation
Once approved, the ROC issues a Certificate of Incorporation, marking the legal establishment of the WOS.
- PAN, TAN, and GST Registration
After incorporation, the company must obtain a Permanent Account Number (PAN), Tax Deduction and Collection Account Number (TAN), and Goods and Services Tax (GST) registration.
- Bank Account Opening
A bank account in the name of the WOS must be opened to facilitate transactions.
Compliance Requirements for A Wholly Owned Subsidiary
- Annual ROC Filings – File Annual Returns (MGT-7) and Financial Statements (AOC-4).
- Income Tax Filing – Submit annual tax returns.
- Statutory Audit – Conduct mandatory financial audits.
- FEMA Compliance – Comply with Foreign Exchange Management Act regulations.
How Vera Causa Legal Helps with Foreign Company Registration in India
Vera Causa Legal (VCL) specializes in assisting foreign companies in setting up a wholly owned subsidiary in India. Our services include:
- Legal Advisory: Expert consultation on company formation.
- Documentation Support: Preparation and filing of incorporation documents.
- Regulatory Compliance: Ensuring compliance with Indian laws and regulations.
- Online Company Registration in Noida: Seamless digital registration services.
Why Choose VCL for Incorporating A Wholly Owned Subsidiary?
- Experienced Legal Team: Our professionals have years of experience in corporate law.
- Comprehensive Services: We handle everything from incorporation to compliance.
- Seamless Online Process: We offer Online Company Registration in Noida for hassle-free setup.
- Quick Turnaround Time: Our experts ensure a smooth and efficient registration process.
- Affordable Pricing: Transparent and competitive pricing with no hidden costs.
Conclusion
Setting up a wos in India is a strategic move for foreign businesses looking to expand in the Indian market. With the right legal guidance, the process can be streamlined and efficient.
Vera Causa Legal (VCL) offers expert assistance in Foreign Company Registration in India and Online Company Registration in Noida, making it easy for foreign companies to establish their presence in India. Contact VCL today for a hassle-free company incorporation experience!