25+ YEARS
OF LEGAL EXPERIENCE
Legal counsel for foreign companies establishing wholly owned subsidiaries in India, including incorporation, foreign investment, corporate structuring and ongoing compliance.
A wholly owned subsidiary can provide a foreign company with a separate Indian corporate entity through which it can establish and conduct its business in India. The Indian subsidiary is a distinct legal entity and can undertake activities in accordance with its constitutional documents and the laws and regulations applicable to its business.
The formation of a wholly owned subsidiary requires careful consideration of the proposed business activities, ownership structure, foreign investment requirements and applicable corporate and regulatory obligations. The appropriate structure and regulatory requirements will depend on the nature of the business and the applicable sector-specific framework.
Rajkishore Associates advises foreign companies and investors on the legal and regulatory aspects of establishing and structuring their presence in India.
A wholly owned subsidiary may be considered by a foreign company that wishes to establish a dedicated Indian corporate presence while retaining full ownership of the Indian entity, subject to the applicable foreign investment rules and sector-specific conditions.
The structure may be appropriate where the foreign company intends to:
Establish and develop a long-term business presence in India through an Indian incorporated entity.
Conduct business activities, enter into contracts and establish commercial relationships through an Indian company.
Employ personnel and undertake commercial operations in India through the Indian subsidiary.
Maintain a separate Indian corporate structure while remaining wholly owned by the foreign parent, subject to applicable law.
The suitability of a wholly owned subsidiary should be assessed in light of the proposed activities, investment structure, regulatory requirements and commercial objectives of the foreign company.
The proposed investment must be examined under India's prevailing Foreign Direct Investment (FDI) policy, including the applicable sectoral cap, entry route and conditions.
The Indian subsidiary is incorporated under the Companies Act, 2013 and requires appropriate constitutional and corporate documentation. The proposed shareholding, capital structure, directors and governance arrangements should be planned as part of the incorporation process.
Where foreign investment is involved, the structure and investment must comply with applicable foreign exchange and FDI regulations. Regulatory filings and reporting requirements may also arise depending on the circumstances.
Following incorporation, the Indian subsidiary remains subject to applicable corporate, regulatory and statutory compliance requirements. Appropriate corporate governance arrangements should therefore be established from the outset.
Rajkishore Associates provides legal assistance to foreign companies and investors in relation to the establishment and structuring of wholly owned subsidiaries in India, including:
Advising on the legal structure for establishing a business presence in India and evaluating the suitability of a wholly owned subsidiary.
Advising on applicable FDI requirements, sectoral restrictions, entry routes and regulatory conditions.
Assisting with the legal and corporate documentation required for incorporation of the Indian subsidiary.
Drafting and reviewing the memorandum, articles and other corporate documentation required for the subsidiary.
Advising on ownership, capital structure and arrangements relating to investment by the foreign parent.
Advising on board, shareholder and other corporate governance matters applicable to the Indian subsidiary.
Advising on legal and regulatory requirements associated with foreign investment into the Indian entity.
Providing continuing legal advice on corporate, commercial and regulatory matters affecting the subsidiary.
Establishing a wholly owned subsidiary involves more than incorporating an Indian company. The structure must take account of the foreign parent's objectives, the nature of the proposed business, applicable foreign investment regulations and the ongoing legal requirements of operating in India.
Rajkishore Associates combines experience in corporate law, foreign investment, business formation and commercial matters to provide practical legal advice to foreign companies establishing and developing their business presence in India.
The firm's experience includes advising foreign and multinational companies on establishing and operating businesses in India, together with ongoing corporate and commercial legal matters.
A Wholly Owned Subsidiary (WOS) is an Indian company that is wholly owned by a foreign parent company, subject to the applicable foreign investment and corporate law requirements. The Indian subsidiary is a separate legal entity from its foreign parent.
Yes. A foreign company can establish an Indian subsidiary, subject to the applicable Foreign Direct Investment (FDI) policy, sectoral conditions, entry route and other regulatory requirements. The Indian entity is incorporated under the Companies Act, 2013.
100% foreign ownership is permitted in most sectors, but it is not a universal rule. The applicable sectoral cap, entry route and conditions must be examined for the particular business activity before establishing the subsidiary.
The process generally involves determining the appropriate business structure, examining applicable FDI requirements, incorporating the Indian company, putting in place the required constitutional and corporate documents, issuing shares to the foreign parent and completing applicable regulatory filings and reporting.
A Wholly Owned Subsidiary is subject to the Companies Act, 2013 and, where foreign investment is involved, applicable foreign exchange and FDI regulations. Depending on the nature of the business, sector-specific laws, licences, registrations and other regulatory requirements may also apply.
An Indian company must comply with the resident director requirements under the Companies Act, 2013. The specific composition of the board should be considered when structuring the subsidiary and in light of the applicable statutory requirements.
Where foreign investment is received, applicable reporting requirements under India's foreign exchange regulations must be complied with. These may include reporting relating to the issue or transfer of equity instruments and other prescribed foreign investment returns. The precise requirements depend on the nature and circumstances of the investment.
Rajkishore Associates advises foreign companies on the legal aspects of establishing Wholly Owned Subsidiaries in India, including business structuring, FDI and regulatory considerations, incorporation, corporate documentation, investment structuring, corporate governance and ongoing corporate and commercial legal matters.
Contact Rajkishore Associates to discuss your foreign investment, corporate structuring and subsidiary formation requirements.
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