Set Up a Wholly Owned Subsidiary in India from Brazil

How to Register a Wholly Owned Subsidiary in India from Brazil

A Wholly Owned Subsidiary (WOS) is the preferred entity structure for Brazilian companies seeking full control over their Indian operations. In a WOS, the Brazilian parent company holds 100% of the equity shares, retaining complete authority over management, strategy, and profit distribution. This structure is ideal for Brazilian corporations entering the Indian market with a long-term commitment, particularly in manufacturing, technology, and services sectors.

India-Brazil bilateral trade reached US$15.2 billion in 2025, a 25% increase year-on-year, with the bilateral trade target raised from the US$20 billion by 2030 agreed in July 2025 to US$30 billion by 2030. Total Indian investment in Brazil exceeds US$15 billion, while Brazilian investment in India continues to grow across sectors. As BRICS partners and G20 members, both nations have committed to deepening economic cooperation. A WOS in India gives the Brazilian parent full FDI ownership, access to the concessional 22% (effective ~25.17%) corporate tax rate under Section 115BAA, the ability to raise domestic funding, and complete operational independence. For entity comparisons, see WOS vs LLP for Foreign Investors and Branch Office vs Subsidiary.

FDI Route and Regulatory Requirements

100% FDI in a Wholly Owned Subsidiary is permitted under the automatic route in most sectors, meaning Brazilian parent companies do not need prior approval from the RBI or the Government of India before investing. The parent company board resolution authorising the investment and the FC-GPR filing after share allotment are the primary regulatory requirements.

Sectors open to 100% FDI under the automatic route include manufacturing (all categories), IT and business process outsourcing, e-commerce (marketplace model), healthcare and pharmaceuticals, renewable energy, food processing, construction-development, oil and gas (private sector refining, exploration, pipelines), financial services, and infrastructure. For a comprehensive breakdown, see FDI Sectoral Caps.

Sectors with Caps or Government Route

Certain sectors have FDI caps or require government approval: defence (74% automatic, 100% with government approval), insurance (100% with conditions), single-brand retail (100% with conditions), multi-brand retail (51% government route), and print media (26-49% depending on category). The Brazilian parent company should verify the sectoral limits before structuring its investment.

Since Brazil does not share a land border with India, Press Note 3 (2020) restrictions do not apply. Brazilian companies can proceed through the automatic route without the additional scrutiny required for investors from China, Pakistan, Bangladesh, and neighbouring countries. For further comparison, see Automatic Route vs Government Approval.

DTAA Benefits for Brazilian Companies

The Double Taxation Avoidance Agreement between India and Brazil, originally signed in 1988 and effective since 1992, was updated by a protocol signed at Brasília on 24 August 2022 that incorporates G20-OECD BEPS anti-abuse provisions (a principal purpose test and limitation of benefits) and adds a dedicated fees-for-technical-services article. The protocol entered into force on 18 October 2025 (India: CBDT Notification No. 39/2026, S.O. 1647(E), dated 30 March 2026), and its revised rates apply in India for income arising in FY 2026-27 onward (from 1 April 2026). Key treaty rates for WOS operations include:

• Dividends: 10% withholding tax where the Brazilian parent is a company beneficially owning at least 20% of the Indian subsidiary's capital throughout the 365 days ending on the date of payment (including that date); 15% in other cases
• Interest: 10% withholding tax on interest from a bank loan of at least 5 years for industrial equipment or an investment project; 15% in other cases; government/central bank interest is exempt
• Royalties (general): 10% for technology transfer, patents, and copyrights other than trademarks
• Royalties (trademarks): 15% applies specifically to trademark licensing under the India-Brazil treaty (down from 25% pre-protocol)
• Fees for technical services: 10% under the new dedicated Article 12-A (previously taxed at 15% within the royalties article, since the pre-protocol treaty had no separate FTS article)
• Capital gains: Gains on disposal of shares in the Indian subsidiary are generally taxable in India with credit available in Brazil

These are the current, post-protocol rates (FY 2026-27 onward). For income arising before 1 April 2026, the pre-protocol rates applied: dividends 15%, interest 15%, royalties 25% (trademarks) / 15% (other), and fees for technical services 15% (taxed within the royalties article).

The Brazilian parent can claim foreign tax credits through the Receita Federal do Brasil for taxes paid in India, preventing economic double taxation. A Tax Residency Certificate from Brazilian authorities and Form 10F are required. For detailed treaty analysis, see our India-Brazil DTAA guide and DTAA Master Guide.

Document Requirements and Authentication

Both India and Brazil are signatories to the Hague Convention. Brazil has been issuing apostilles through authorised cartórios (notary offices) since August 2016, under the authority of the National Justice Council (CNJ). Documents require an apostille from a Brazilian cartório rather than embassy attestation. For a detailed comparison, see Apostille vs Embassy Attestation.

Documents Required from the Brazilian Parent Company

• Certificate of Incorporation / Contrato Social or Estatuto Social of the parent company (apostilled)
• CNPJ certificate (Cadastro Nacional da Pessoa Jurídica) of the parent company (apostilled)
• Board resolution (Ata de Assembleia) authorising the establishment of a WOS in India and the quantum of investment (apostilled)
• Audited financial statements of the parent company for the preceding year (apostilled)
• Passport copies of all proposed directors (notarised and apostilled)
• Proof of address for all proposed directors (notarised and apostilled)
• Power of Attorney in favour of an authorised representative in India (apostilled)
• Letter from parent company's banker confirming financial standing

Translation Requirement

All Brazilian documents in Portuguese must be translated into English by a certified sworn translator (tradutor juramentado) before apostilling. The cartório apostilles both the original and the translated version. Budget 3-5 additional days for the translation process.

Documents Prepared in India

• Digital Signature Certificate (DSC) for all proposed directors
• Director Identification Number (DIN) applications via SPICe+
• Memorandum of Association (MoA) reflecting 100% foreign shareholding
• Articles of Association (AoA) with provisions for foreign parent company governance
• Proof of registered office address
• Valuation certificate from a SEBI-registered merchant banker or Chartered Accountant (for FC-GPR filing)

Step-by-Step Registration Process

Step 1: Parent Company Board Resolution

The Brazilian parent company's board must formally approve the establishment of the WOS in India, specifying the proposed investment amount, authorised and paid-up capital structure, names of proposed directors, and the nature of business activities. This resolution must be apostilled through a Brazilian cartório.

Step 2: Obtain Digital Signature Certificates (DSC)

All proposed directors (including nominees from the Brazilian parent) must obtain Class 3 DSCs from a licensed Indian Certifying Authority. Timeline: 2-3 working days with apostilled documents.

Step 3: File SPICe+ for Incorporation

The SPICe+ form on the MCA portal is a unified application covering company name reservation, incorporation (CIN allocation), PAN, TAN, EPFO, ESIC, and GST registration. Attach the MoA reflecting 100% foreign shareholding by the Brazilian parent, AoA, all apostilled foreign documents, and director proofs.

Step 4: Receive Certificate of Incorporation

The ROC issues the Certificate of Incorporation with the Corporate Identity Number (CIN), PAN, and TAN. Processing takes 7-10 working days under the MCA V3 portal.

Step 5: Open Bank Account and Receive FDI

Open a current account with an Authorised Dealer bank in the name of the WOS. The Brazilian parent remits the investment amount to this account. The bank issues a Foreign Inward Remittance Certificate (FIRC) as proof of the inward remittance.

Step 6: Allot Shares and File FC-GPR

Allot shares to the Brazilian parent company and file Form FC-GPR through the RBI's FIRMS portal within 30 days of share allotment. The FC-GPR filing requires a valuation certificate (not older than 90 days from allotment date) from a SEBI-registered merchant banker or a Chartered Accountant in practice.

Step 7: File INC-20A (Commencement of Business)

File the Declaration of Commencement of Business (INC-20A) within 180 days of incorporation, confirming that the subscriber (Brazilian parent) has paid up the subscribed share capital.

Timeline and Costs

The end-to-end timeline for establishing a WOS in India from Brazil is approximately 4-8 weeks:

Cost Breakdown

• Government fees (ROC/MCA): INR 5,000-15,000 (based on authorized capital)
• Stamp duty on MoA/AoA: INR 10,000-30,000 (varies by state and capital)
• DSC: INR 1,500-2,500 per director
• Valuation certificate: INR 10,000-25,000
• Professional fees (CS/CA for incorporation + FC-GPR): INR 25,000-50,000
• Apostille and translation charges in Brazil: BRL 200-500 total
• Total estimated cost: INR 60,000-1,40,000 depending on authorized capital and state

Post-Registration Compliance

A Wholly Owned Subsidiary in India has the same compliance obligations as any Private Limited Company, plus additional FEMA requirements:

• Annual General Meeting (AGM): By 30 September each year
• Board meetings: Minimum 4 per year, with a gap of not more than 120 days between two consecutive meetings (Section 173)
• Financial Statements (AOC-4): Filed within 30 days of AGM
• Annual Return (MGT-7): Filed within 60 days of AGM
• Statutory audit: Mandatory, with auditor appointment within 30 days of incorporation
• Income tax return: Filed by 31 October (for audited companies)
• Transfer pricing: Annual documentation, certification (Form 3CEB), and Master File / Country-by-Country Reporting if applicable
• FEMA/RBI: Annual FLA Return by 15 July, any additional FDI rounds reported via FC-GPR within 30 days
• GST compliance: Monthly/quarterly returns if GST-registered

Beacon Filing provides comprehensive annual compliance, foreign subsidiary management, and FEMA/RBI compliance services.

Common Challenges for Brazilian Companies

Portuguese-to-English Translation Requirements

All Brazilian corporate documents (Contrato Social, Ata de Assembleia, financial statements) must be translated into English by a sworn translator (tradutor juramentado) before apostilling. This is the most common source of delays for Brazilian companies, as finding qualified translators for legal and financial terminology can take time. Plan 3-5 days for translation and budget BRL 50-150 per page depending on document complexity.

Currency Conversion and BACEN Compliance

The Brazilian Real (BRL) is not freely convertible internationally. Brazilian parent companies must route their investment through authorised banks (bancos autorizados) in compliance with Banco Central do Brasil (BACEN) regulations. Outward direct investment must be registered with BACEN through the RDE-IED (Registro Declaratório Eletrônico de Investimento Estrangeiro Direto) system. Work with your Brazilian bank to ensure proper registration before initiating the capital transfer to India.

Resident Director Requirement

At least one director must be a resident of India (182 days presence in the financial year). Brazilian parent companies typically appoint a local professional director, a partner from an Indian law or CA firm, or deploy a Brazilian expatriate who maintains Indian residency. This requirement is non-negotiable and must be maintained continuously.

Transfer Pricing for Intercompany Transactions

Indian tax authorities are particularly vigilant about transfer pricing compliance for WOS entities with 100% foreign ownership. All transactions between the Indian WOS and the Brazilian parent (management fees, royalties, technology transfer, intercompany loans, cost-sharing arrangements) must comply with arm's length pricing principles. A transfer pricing certification in Form 3CEB from a Chartered Accountant is required under Section 92E for every international transaction, irrespective of value, while the detailed documentation prescribed under Rule 10D applies where the aggregate value of international transactions exceeds INR 1 crore.

Valuation Requirements for FC-GPR

The share price at which the Brazilian parent subscribes to shares must be supported by a valuation certificate from a SEBI-registered merchant banker or Chartered Accountant. The valuation must not be older than 90 days from the date of share allotment. For the initial subscription at incorporation, the face value (typically INR 10 per share) is generally acceptable, but subsequent share issuances require a formal valuation using DCF or comparable transaction methods. For more details, visit our Brazil country guide.

Frequently Asked Questions

Can the Brazilian parent company hold 100% shares in the Indian WOS?

Yes. In most sectors open to FDI under the automatic route, 100% foreign ownership is permitted. The Brazilian parent can hold all shares of the Indian subsidiary, giving it full control over management, strategy, and profit distribution. There is no requirement for an Indian shareholder or joint venture partner in sectors allowing 100% FDI.

What is the minimum capital requirement for a WOS in India?

There is no statutory minimum paid-up capital for a Private Limited Company (which is the legal form of a WOS). However, the authorized capital should be commercially reasonable for the intended business activities. The initial share subscription at face value (typically INR 10 per share) is acceptable for the first allotment, but subsequent rounds require formal valuation.

How is a WOS taxed compared to a Branch Office?

A WOS incorporated as an Indian Private Limited Company can avail of the concessional 22% (effective ~25.17%) rate under Section 115BAA. New manufacturing companies could access a 15% rate (effective ~17.16%) under Section 115BAB, but only if manufacturing commenced by 31 March 2024 — that window has closed and was not extended, so new manufacturers now also default to the 22%/25.17% Section 115BAA rate. This is significantly lower than the 35% (effective ~38.22%) rate applicable to Branch Offices of foreign companies.

Do Brazilian documents in Portuguese need sworn translation?

Yes. All documents submitted to Indian authorities must be in English. Brazilian documents require translation by a certified sworn translator (tradutor juramentado) registered with a Brazilian Junta Comercial. The translated document and original are then apostilled together at a cartório authorised by the National Justice Council (CNJ).

What is FC-GPR and when must it be filed?

FC-GPR (Foreign Currency - Gross Provisional Return) is a mandatory RBI filing required within 30 days of allotting shares to the Brazilian parent company. It is filed through the Single Master Form on the RBI FIRMS portal and must be accompanied by a valuation certificate, board resolution for share allotment, and FIRC from the AD bank.

Can the WOS raise additional funding from Indian sources?

Yes. Unlike a Branch Office, a WOS incorporated as a Private Limited Company can raise additional funding through Indian banks, NBFCs, or by issuing debt instruments. It can also issue shares to additional Indian or foreign investors (subject to FDI sectoral caps). This makes the WOS structure more flexible for growth financing compared to a Branch Office or LLP.