How to Register a Wholly-Owned Subsidiary in India: 2026 Guide for Foreign Companies

A wholly-owned subsidiary (WOS) is the most common and efficient way for a foreign company to enter India. Under the automatic FDI route, your foreign parent can hold 100% of the Indian subsidiary's shares in most sectors — with no government approval required.

Setup typically takes 15–25 business days once documents are ready, with an end-to-end cost of USD 250–700 in government and professional fees. This 2026 guide walks you through structure, FDI compliance, the 7-step incorporation process, costs, and post-setup compliance — written by a CA team that has incorporated many foreign subsidiaries in India.

What Is a Subsidiary Company in India?

A subsidiary company is an Indian company where more than 50% of shares are held by a foreign parent company. When the foreign parent holds 100% of the shares, it is called a Wholly Owned Subsidiary (WOS).

Subsidiary companies in India are incorporated as Private Limited Companies under the Companies Act, 2013, regulated by the Ministry of Corporate Affairs (MCA).

Why Form a Subsidiary in India?

Full Ownership: A WOS allows 100% foreign ownership in most sectors under the automatic FDI route.

Separate Legal Entity: The subsidiary is a distinct legal entity, limiting the parent company's liability.

Access to Indian Market: Enables full business operations including sales, hiring, contracts, and billing in India.

Tax Efficiency: Eligible for tax treaties under India's DTAA network with 90+ countries.

Repatriation of Profits: Dividends and profits can be repatriated subject to applicable taxes and FEMA compliance.

Eligibility & FDI Route

Most sectors allow 100% FDI under the automatic route — meaning no prior government approval is required. Sectors requiring government approval include defence, media, and certain financial services.

The Foreign Exchange Management Act (FEMA) and RBI regulations govern all foreign investment into India.

Step-by-Step Registration Process

Step 1 — Obtain DSC & DIN All proposed directors must obtain a Digital Signature Certificate (DSC) and Director Identification Number (DIN) from MCA.

Step 2 — Name Approval File RUN (Reserve Unique Name) application on the MCA portal. The name must comply with MCA naming guidelines.

Step 3 — Incorporation Filing (SPICe+) File the SPICe+ form with MCA including the Memorandum of Association (MOA) and Articles of Association (AOA).

Step 4 — Obtain PAN & TAN Permanent Account Number (PAN) and Tax Deduction Account Number (TAN) are issued with the Certificate of Incorporation.

Step 5 — Open Bank Account Open a bank account in India in the company's name. Foreign funds can be remitted via the FEMA-compliant route.

Step 6 — Foreign Investment Reporting File Form FC-GPR with RBI within 30 days of receiving foreign investment.

Step 7 — Post-Incorporation Registrations Register for GST, Professional Tax, PF/ESI (once employees are hired), and other applicable registrations.

Documents Required from Foreign Parent Company

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    Certificate of Incorporation of the parent company (apostilled/notarised)

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    Board resolution authorising investment in India

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    Memorandum & Articles of Association of parent company

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    Address proof of parent company's registered office

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    Identity and address proof of proposed directors

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    Passport copies of foreign directors (apostilled)

Taxation of Indian Subsidiary

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    Corporate tax rate: 22% (for domestic companies under Section 115BAA) + surcharge + cess

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    Dividend Distribution: Dividends paid to foreign parent are subject to withholding tax (rates vary by DTAA)

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    Transfer Pricing: All transactions between the Indian subsidiary and foreign parent are subject to Indian transfer pricing regulations

Post-Registration Compliance

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    Annual filing with MCA (Form AOC-4 and MGT-7)

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    Annual statutory audit

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    GST monthly/quarterly returns

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    TDS returns (quarterly)

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    Annual transfer pricing report (Form 3CEB) if international transactions exceed INR 1 crore

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    FEMA filings: Annual Performance Report (APR), Annual Return on Foreign Liabilities and Assets (FLA)

How India Company Setup Can Help

Our team of CAs, Company Secretaries, and international tax specialists has assisted 100+ foreign companies set up operations in India. We handle everything from incorporation to post-setup compliance — so you can focus on your business.

Frequently Asked Questions
Can a foreign company own 100% of an Indian subsidiary?+
Yes. Under the automatic FDI route, foreign companies can hold 100% of an Indian subsidiary in most sectors including technology, manufacturing, consulting, e-commerce (B2B), and healthcare. No prior government approval is needed. Restricted sectors include defence above 74%, broadcasting, print media, and multi-brand retail.
How long does it take to register a subsidiary in India?+
Standard timeline is 15–25 business days for incorporation, plus 3–6 weeks for bank account opening. End-to-end from document collection to operational entity: typically 6–10 weeks.
What is the minimum capital required for a subsidiary in India?+
There is no minimum capital requirement. A wholly-owned subsidiary can be incorporated with authorised capital of INR 1 lakh (approximately USD 1,200). Many subsidiaries start with paid-up capital of INR 10,000.
Does the Indian subsidiary need a resident director?+
Yes. The Companies Act 2013 requires at least one director who has stayed in India for 182+ days in the previous calendar year. Foreign companies can either send an employee on a long-term assignment or appoint a professional resident director.
What taxes does an Indian subsidiary pay?+
Corporate tax of 22% (Section 115BAA) plus surcharge and cess, effectively ~25.17%. Dividends paid to the foreign parent attract withholding tax — 20% under domestic law, reducible to 5–15% under most DTAAs with a valid Tax Residency Certificate.
Is transfer pricing compliance mandatory?+
Yes, if international transactions between the Indian subsidiary and foreign parent exceed ₹1 crore in aggregate. Form 3CEB (now Form 48 under the Income Tax Act 2025) and a transfer pricing study must be filed annually.
Can the subsidiary be incorporated without the foreign directors visiting India?+
Yes. The entire incorporation can be completed remotely. Apostilled documents and digital signatures can be obtained without physical presence in India.
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