Wholly Owned Subsidiary (WOS)

Increasing the scope of the market not only increases the chances of sales and profits but provides an underlying safety and security for the consumption and use of the goods and services of a Company.

Companies seeking to operate in more than one country can operate its business through a Wholly Owned Subsidiary (WOS). WOS can be defined as those companies in which Parent Company owns all the shares allowing them to exercise control in operational and functional matters. WOS also offer an opportunity for companies to diversify and manage risk.

In India, Wholly Owned Subsidiary (WOS) of foreign entities are mostly incorporated as Private Limited Company as such companies enjoy numerous exemptions under the Indian Company Law, thus minimizing the compliance burden. Incorporation of a private limited company is the easiest, fastest with well-defined laws in place and is the most commonly used entry structure by foreign nationals and foreign companies. Incorporation of a private limited company as a wholly owned subsidiary of a foreign company or joint venture is the most convenient and fastest entry strategy.

Some of the benefits of establishing Wholly-Owned Subsidiary:

1. 100% Foreign Direct Investment (FDI) is allowed in most of the sectors under the automatic routei.e no Government approval is required in all these sectors. In other limited sectors like multi-brand retail, single-brand retail, insurance, defense etc. sectoral caps have been put with/ without Government approvals as outlined under the extent FDI Policy and WOS can apply for approvals, wherever needed.
2. As compared to liaison office or branch office, WOS have maximum flexibility to conduct business as the company is treated at par with other domestic companies as far as Companies Act, Income Tax, Goods and Services Tax (GST), Labour Laws etc. are concerned, making them entitled to all deductions, allowances as available to domestic companies.
3. entitled to all deductions, allowances as available to domestic companies.
4. All foreign investments are repatriable (net of applicable taxes) except in cases where the investment is made or held on non-repatriation basis. Repatriation through dividends, buyback of shares or sales of shares are some of the most commonly methods used for repatriation.

For Detailed Procedure of Incorporating a Private Limited Company in India, please visit:

Incorporating a Private Limited Company in India – Non-Resident Perspective