India has fast emerged as a top destination for global businesses, thanks to its expanding economy, cost-effective workforce, and favorable government policies. One of the most effective and long-term entry strategies for foreign companies is establishing a Wholly Owned Subsidiary in India.
In this blog, we’ll explain why this model is a preferred route for international companies, how it works, and what steps are involved in setting one up.
What Is a Wholly Owned Subsidiary?
A wholly owned subsidiary is a private limited company formed in India that is entirely owned (100%) by a foreign parent company. This structure allows the foreign company to operate in India with complete control, while the subsidiary functions as an independent legal entity under Indian corporate law.
Why Companies Prefer Wholly Owned Subsidiaries in India
1. Full Control, Zero Local Dependency
You don’t need a local joint venture partner or investor. All decisions, strategies, and operations are managed by the foreign parent company.
2. Permanent Business Presence
Unlike liaison or project offices that have operational restrictions, wholly owned subsidiaries can engage in full-scale commercial activities—from manufacturing and sales to customer service and R&D.
3. Profit Repatriation
Indian laws allow subsidiaries to remit dividends, royalties, and profits back to the parent company—subject to tax compliance—making it a sustainable investment model.
4. Operational Independence
Since it’s an Indian legal entity, it can open bank accounts, sign contracts, hire employees, and own assets in India.
Who Should Consider Setting Up a Subsidiary?
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Multinational corporations expanding to India for long-term operations
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IT & software companies seeking to tap into India's tech talent
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Manufacturing firms wanting to set up plants under Make in India
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Startups and SMEs looking to scale operations cost-effectively
If you plan to stay for the long run, this model gives you the flexibility and legal coverage you need.
The Registration Process Made Simple
Wondering how to register a wholly owned subsidiary in India? Here’s a simplified process:
Step 1: Finalize Your Directors and Company Name
Choose at least two directors (one must be an Indian resident) and reserve a unique name for your company via the MCA portal.
Step 2: Apply for DSC and DIN
Directors must obtain a Digital Signature Certificate (DSC) and Director Identification Number (DIN).
Step 3: Prepare and File Incorporation Documents
This includes drafting the Memorandum of Association (MoA), Articles of Association (AoA), and submitting the incorporation form (SPICe+) along with KYC and other supporting documents.
Step 4: Company Incorporation and PAN/TAN
Once approved by the Registrar of Companies, your business is officially registered. You also receive a company PAN and TAN.
Post-Incorporation Compliance You Must Follow
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GST Registration
Required if your turnover exceeds the threshold or you engage in inter-state business. -
FEMA & RBI Reporting
Foreign Direct Investment (FDI) must be reported to the RBI through Form FC-GPR. -
Annual Filings
You must file income tax returns, financial statements, and other forms annually. -
Payroll & Labor Law Compliance
Ensure your employee records, salary structure, and benefits (PF, ESI) comply with Indian laws.
Why India Is an Ideal Location for Your Subsidiary
India offers a growing middle class, increasing demand for global brands, and a wide talent pool. Government initiatives such as Digital India, Startup India, and PLI schemes also provide an enabling environment for international businesses.
How Brooks Payroll Services LLP Helps You Get There Faster
Our team at Brooks Payroll Services LLP specializes in helping foreign companies establish their Wholly Owned Subsidiary in India with ease. We assist with:
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End-to-end incorporation
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Foreign investment compliance
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Statutory registrations (GST, PF, ESIC)
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Ongoing payroll and tax support
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Secretarial compliance and legal advisory
From paperwork to post-incorporation compliance, we simplify every step so you can focus on growing your business.
Conclusion
If you're looking for a secure and scalable way to expand into India, a wholly owned subsidiary is a proven route. It offers total control, tax advantages, and unlimited growth potential—all while ensuring you're fully compliant with Indian laws.
With the right local partner like Brooks Payroll Services LLP, entering the Indian market becomes seamless, efficient, and legally sound.
FAQs: Wholly Owned Subsidiary in India
1. Is 100% foreign ownership allowed in Indian subsidiaries?
Yes, in most sectors under the automatic route. Certain industries may require government approval.
2. Can I set up a subsidiary without visiting India?
Yes, the entire process can be completed remotely with proper documentation and authorization.
3. What documents are needed for incorporation?
You'll need passport copies of foreign directors, proof of address, MoA, AoA, and authorization letters.
4. Is the subsidiary taxed like an Indian company?
Yes. It is subject to Indian corporate tax laws, including GST, TDS, and income tax.
5. How long does the registration process take?
It typically takes 15–20 working days if all documents are in order.
