Quick answer: A wholly owned subsidiary (WOS) in India is an Indian company whose whole share capital is held by a foreign parent. A group nominee often holds one share to meet the two-member minimum. It is usually a private limited company under the Companies Act, 2013, funded through FDI and reported to the RBI on FC-GPR.
- A private company needs at least 2 directors and 2 members.
- At least one director must have stayed in India for 182 days or more, under section 149(3).
- Most services businesses, including IT and ITeS, can be 100% foreign-owned under the automatic route.
- A subsidiary cannot be a “small company”, whatever its size, so the lighter small-company regime is closed to it.
How does a foreign company set up a WOS?
One MCA filing, then FEMA and tax steps.
- Get Class 3 digital signatures for the directors and subscribers.
- Reserve the name and incorporate through SPICe+ (INC-32), which also issues DIN, PAN and TAN.
- Open the bank account and receive share capital from the parent.
- Allot shares and file FC-GPR within 30 days.
- File INC-20A, the commencement of business declaration, within 180 days of incorporation.
Register for GST, Shops and Establishments, EPF and ESIC as the business needs.
Two steps catch foreign parents most often. The resident director must be someone you trust with signing power in India, and the share capital must arrive and be reported on FC-GPR within the deadline, with every document matching.
What does running a WOS cost you each year?
More than founders expect. A WOS is a full Indian company. Every obligation applies from year one.
| Obligation | When |
|---|---|
| Statutory audit by a chartered accountant | Every year, whatever the turnover |
| First auditor appointed by the board | Within 30 days of incorporation |
| Board meetings | At least 4 a year, no more than 120 days apart |
| AGM, then AOC-4 and MGT-7 with the ROC | AGM within 6 months of year-end, forms within 30 and 60 days |
| FLA return to the RBI | Each July |
| Transfer pricing documentation | For every charge between you and the parent |
Our annual compliance entry lists the forms. The MCA’s SPICe+ guide shows what the incorporation form bundles.
When is an EOR the faster answer?
When you want people working in India before you want a company there.
An EOR employs your team on its own Indian entity. No incorporation, no FC-GPR, no resident director, no annual audit of your own. Suppose you need four engineers in Pune this quarter. The EOR route can have them onboarded in days, while a WOS takes weeks to incorporate and capitalise.
A WOS is the right answer once you need to own Indian contracts and IP, invoice Indian customers or run a team big enough that fixed compliance costs little per head. Most groups then move staff across through an EOR-to-entity transfer. Our comparison of EOR vs subsidiary in India runs the numbers.
How does Remunance support you from EOR to WOS?
Remunance runs both stages. We employ your first hires as their employer of record, then our India subsidiary formation team incorporates your WOS and moves the staff onto it without a break in service. Our compliance management service can keep the new entity’s employment filings on track afterwards. Get a costed EOR-to-subsidiary roadmap for your India plan.
What else do people ask about wholly owned subsidiaries?
Can a foreign company own 100% of an Indian company?
Yes, in sectors that allow 100% FDI, which include IT, ITeS and most services. A nominee usually holds one share so the company has the two members a private company needs.
How long does it take to set up a WOS in India?
Weeks, not days. Incorporation comes first, then the bank account, capital and FC-GPR, with name approval and notarising documents abroad usually setting the pace.
Is a wholly owned subsidiary a separate legal entity?
Yes. It is an Indian company in its own right, so its debts and obligations are its own, and the parent’s liability is limited to its share capital.