Wholly-Owned Subsidiary (WOS) in India
Wholly-Owned Subsidiary (WOS) in India
A Wholly-Owned Subsidiary (WOS) in India refers to a company incorporated under Indian law but entirely owned and controlled by a foreign parent company. It allows foreign investors complete ownership and operational control while enjoying the benefits of being a locally incorporated entity. This structure is widely preferred by multinational corporations and foreign investors seeking full control over their Indian operations.
This article offers a detailed insight into the concept of a Wholly-Owned Subsidiary, the documentation required, typical timelines for incorporation and compliance, and how a Delhi-based legal company can support and streamline the process.
Understanding Wholly-Owned Subsidiary (WOS)
A WOS in India is a separate legal entity incorporated under the Companies Act, 2013, with 100% shareholding by a foreign company (the parent). Unlike branch or liaison offices, a WOS is an independent company in the eyes of law, allowing it to engage in commercial activities, enter contracts, employ staff, and raise capital.
Benefits of a WOS include:
- Complete control over business strategy and operations by the foreign parent.
- Limited liability protection.
- Easier compliance with Indian laws compared to branches.
- Ability to raise local funding and enter diversified commercial activities.
- Enhanced credibility with Indian customers, suppliers, and regulators.
Documentation Required for Setting up a WOS
The incorporation and foreign investment process for a WOS in India involves several key documents:
- Digital Signature Certificates (DSC) for all proposed directors
- Director Identification Numbers (DIN) – for directors.
- Name Approval Application (RUN form) for reserving the company name.
- Incorporation Forms (SPICe+ or INC-7) filed with the Ministry of Corporate Affairs.
- Memorandum of Association (MOA) specifying the company’s objectives and foreign ownership.
- Articles of Association (AOA) detailing the internal governance.
- Copy of Foreign Parent Company’s Certificate of Incorporation and Memorandum & Articles of Association.
- Board Resolution of the Parent Company approving the investment and incorporation of the WOS.
- Proof of Identity and Address of directors and shareholders.
- Form AR-1 reporting registered office address.