Establish a Wholly Owned Subsidiary in India from France

How to Establish a Wholly Owned Subsidiary in India from France

A Wholly Owned Subsidiary (WOS) is the preferred corporate structure for French multinationals and mid-market companies establishing a significant presence in India. With the India-France relationship elevated to a "Special Global Strategic Partnership" in 2026, and bilateral trade exceeding USD 15 billion, the commercial incentives for French companies to set up Indian subsidiaries have never been stronger.

A WOS is a Private Limited Company incorporated in India where the French parent company holds 100% of the equity share capital. This structure provides complete operational control, limited liability protection, the ability to earn revenue and generate profits, eligibility for government tenders and PLI incentives, and the right to fully repatriate profits to France.

Major French corporations with established WOS entities in India span diverse sectors: aerospace (Airbus, Safran, Dassault), automotive (Renault, Peugeot, Michelin), energy (TotalEnergies, Schneider Electric, Engie), luxury and retail (LVMH, L'Oreal, Decathlon), and technology (Capgemini, Atos, Dassault Systemes). This guide provides a complete roadmap for French companies following the same path.

FDI Route and Regulatory Requirements

A WOS requires 100% foreign direct investment, which is permitted under India's automatic route in the vast majority of sectors. No prior approval from the RBI or DPIIT is needed — the French parent simply incorporates the subsidiary and reports the investment post-facto.

100% FDI Sectors (Automatic Route)

French companies can establish a WOS with complete ownership in: IT and software services, manufacturing (including aerospace components, auto parts, pharma), e-commerce (marketplace model), infrastructure, renewable energy, food processing, healthcare, insurance (100% from 2025), financial services, and hospitality. The top French investment sectors in India — aerospace, energy, telecom, agri-food, and logistics — are all open under the automatic route.

Sectors Requiring Government Approval or with Caps

Full WOS ownership may not be possible in: multi-brand retail (51% cap), print media (26%), FM radio (49%). Defence manufacturing permits 74% under automatic route and 100% under government approval — particularly relevant given the deep India-France defence partnership (Rafale fighter jets, Scorpene-class submarines, PSLV launches). French defence companies seeking 100% ownership must apply through the government approval route.

Press Note 3 Exemption

French investors are fully exempt from Press Note 3 restrictions. Unlike investors from China, Pakistan, or Bangladesh who require government approval for all FDI regardless of sector, French companies face no additional security screening — a significant competitive advantage.

DTAA Benefits for France Investors

The India-France DTAA, originally signed in 1992, is being modernised through an Amending Protocol signed on 23 February 2026 (pending entry into force pending completion of internal procedures in both countries). For WOS structures, where dividends, inter-company interest, royalties, and management fees flow between the Indian subsidiary and French parent, these treaty provisions are critical.

Amended Treaty Rates (2026 Amending Protocol — pending entry into force)

• Dividends (10%+ shareholding): 5% withholding tax — highly favourable for WOS structures where the French parent holds 100% (reduced from 10%)
• Dividends (under 10% shareholding): 15% withholding tax (increased from 10%)
• Interest: 10% of the gross amount (relevant for inter-company loans from the French parent)
• Royalties: 10% of the gross payment (for technology licensing and IP transfers)
• Fees for Technical Services: Restricted to cases involving transfer of technical know-how only — routine consultancy, advisory, cybersecurity, and market research services fall outside source-based taxation

Eliminated MFN Clause

The 2026 Amending Protocol, once in force, will delete the Most Favoured Nation (MFN) clause from the original treaty. This means French investors cannot claim lower rates that India may offer to other countries in future treaties. However, the reduced 5% dividend rate for strategic shareholders (10%+) more than compensates for this change in the context of WOS structures.

Capital Gains

Under the 2026 Amending Protocol (once in force), India will retain full taxing rights on capital gains from the sale of shares in an Indian company. This is relevant for French parents considering partial or full exit from the Indian WOS. Review the detailed provisions at India-France DTAA capital gains.

Document Requirements and Authentication

France, a member of the Hague Apostille Convention since 1965, uses the apostille system for document authentication. This is faster and simpler than embassy attestation.

Parent Company Documents (France)

• Board Resolution (Proces-verbal du Conseil): Authorising the establishment of an Indian WOS, specifying authorised capital, initial investment, and nominated directors (apostilled)
• Kbis Extract (Extrait Kbis): Official registration certificate from the Greffe du Tribunal de Commerce confirming the French company's legal existence and good standing (apostilled)
• Statuts: Articles of association of the French parent company (apostilled)
• Financial statements: Latest certified annual accounts (bilan, compte de resultat)
• Passport copies: Of all proposed directors, notarised and apostilled
• Power of Attorney (Procuration): Authorising the Indian representative, notarised and apostilled
• Certified English translations: All French-language documents must be translated by a certified translator (traducteur assermente)

Indian Side Requirements

• Proof of registered office (lease agreement or sale deed + NOC from owner)
• DSC and DIN for all proposed directors
• Identity and address proof of the Indian resident director
• Draft MOA and AOA for the Indian subsidiary

Apostille Authorities in France

Unlike some countries with a single apostille authority, France assigns this responsibility to different bodies depending on the document type. Notarial documents (board resolutions, PoA) are apostilled by the Cour d'appel (Court of Appeal). Administrative documents (Kbis) are apostilled by the Procureur de la Republique. Only original documents can be apostilled — certified copies are not accepted. Allow 3-7 working days for processing.

Step-by-Step Registration Process

The WOS incorporation follows India's SPICe+ platform, with additional FDI-specific compliance steps:

Step 1: French Parent Board Resolution

The French parent's board (Conseil d'Administration or Directoire) passes a formal resolution authorising the Indian subsidiary, specifying: authorised and initial paid-up capital, names and details of proposed directors (minimum 2, at least 1 Indian resident), registered office location, business activities, and the designated signatory for Indian filings.

Step 2: Document Preparation and Apostille

Gather all parent company documents, have them translated by a traducteur assermente (sworn translator), and apostille the originals through the appropriate French authority. This step runs in parallel with the DSC/DIN procurement.

Step 3: Obtain DSC and DIN

All directors apply for Digital Signature Certificates. French directors need apostilled passport copies. DIN for up to 2 first-time directors is obtained within the SPICe+ form.

Step 4: Name Reservation via RUN

Apply for name reservation through RUN on the MCA portal. The subsidiary's name typically includes the parent's brand and must end with "Private Limited."

Step 5: File SPICe+ (Part A and Part B)

Submit the integrated SPICe+ form for incorporation, PAN, TAN, GST, EPFO, ESIC, and bank account opening. Attach the MOA, AOA, and all apostilled and translated French documents.

Step 6: Certificate of Incorporation

The ROC issues the Certificate of Incorporation with PAN and TAN (5-10 working days).

Step 7: Open Bank Account and Receive Capital

Open a current account with an Authorised Dealer Bank (preferably one with a French banking relationship — BNP Paribas India, Societe Generale India, or Credit Agricole). The French parent remits initial share capital via SWIFT transfer. The bank issues a FIRC.

Step 8: Allot Shares and File FC-GPR

The Indian subsidiary's board allots shares to the French parent. File Form FC-GPR on the RBI's FIRMS/SMF portal within 30 days of allotment. A valuation certificate from a SEBI-registered merchant banker or CA is mandatory. Late filing attracts compounding penalties under FEMA.

Timeline and Costs

The end-to-end timeline for establishing a French WOS in India is typically 5-7 weeks:

Cost Estimate

• Government filing fees: INR 5,000-15,000 (based on authorised capital)
• DSC per director: INR 1,500-2,500
• Stamp duty: INR 2,000-10,000 (varies by state)
• Professional fees (CA/CS for incorporation + FC-GPR): INR 30,000-75,000
• Valuation report for FC-GPR: INR 15,000-30,000
• Certified translation fees: EUR 200-500 (for 5-8 documents)
• Apostille charges (France): EUR 15-45 per document
• Total estimated cost: INR 80,000-2,00,000 (approximately EUR 850-2,100)

French multinationals typically set authorised capital at INR 25-100 lakh to accommodate phased investment without repeated capital increase filings. Compare structures at French SARL vs Indian Pvt. Ltd. and WOS vs LLP for foreign investors.

Post-Registration Compliance

A French WOS in India faces the same compliance obligations as any Indian Pvt. Ltd., plus additional FDI-related requirements:

• Annual ROC filings: MGT-7 and AOC-4
• Board meetings: Minimum 4 per year (1 per quarter minimum)
• AGM: Within 6 months of financial year end
• Statutory audit: Mandatory annual statutory audit
• Tax filings: Corporate tax (ITR-6), advance tax, GST returns
• FC-GPR: On every subsequent share issuance to the French parent
• FLA Return: Annual filing with RBI by July 15
• Transfer pricing: TP documentation and Form 3CEB — mandatory if inter-company transactions exceed INR 1 crore
• Form 15CA/15CB: Required for every outward remittance to France
• Country-by-Country Reporting: If the French parent group's consolidated revenue exceeds EUR 750 million

Leverage our FEMA and RBI compliance and transfer pricing services for ongoing support.

Common Challenges for France Companies

Certified Translation Requirements

All French-language corporate documents must be translated into English by a traducteur assermente (sworn translator) before submission to Indian authorities. This adds 2-5 working days and EUR 200-500 to the timeline. Translations can be processed in parallel with apostille to minimise delays.

Navigating the 2026 DTAA Amending Protocol

The 2026 Amending Protocol (once in force) will introduce a favourable 5% dividend rate for WOS structures (where the French parent holds 10%+), but eliminates the MFN clause. French companies with existing Indian entities should review their intercompany arrangements — particularly technical service fee structures, as routine consultancy fees may no longer be taxable in India under the amended treaty. This creates planning opportunities for restructuring service agreements.

Indian Resident Director

At least one director must have spent 182+ days in India during the financial year. French multinationals typically appoint a senior India-based hire or use a professional resident director service during the initial phase. The director need not be an Indian citizen.

Social Security Treaty Coordination

France and India have a bilateral social security agreement. French expatriates deputed to the Indian WOS can claim exemption from Indian EPF/ESI contributions for up to 5 years if they remain covered under the French social security system and obtain a Certificate of Coverage (Certificat de Detachement). This must be arranged before deputation to avoid dual contributions.

Transfer Pricing Complexity

Inter-company transactions between the French parent and Indian WOS — management fees, IP royalties, shared services costs, intra-group financing — are all subject to India's rigorous transfer pricing scrutiny. Indian tax authorities have historically been aggressive in TP audits for WOS entities. Maintain contemporaneous documentation, benchmark all transactions, and consider an Advance Pricing Agreement (APA) for high-value recurring transactions.

Frequently Asked Questions

What is the key advantage of a WOS over a branch office for French companies entering India?

A WOS is a separate Indian legal entity, which means it can independently bid for government contracts, access PLI incentives, and retain profits in India. A branch office is merely an extension of the French parent — it cannot manufacture, has limited permitted activities, and its income is fully attributable to the foreign company. For any revenue-generating operation, a WOS is the clear choice. See our branch office vs subsidiary comparison.

How does the 5% dividend rate under the amended DTAA work for a WOS?

Since the French parent holds 100% of the WOS (exceeding the 10% threshold), all dividend distributions from the Indian WOS to the French parent are subject to only 5% withholding tax in India. If France does not additionally tax these dividends (many French holding structures use the EU parent-subsidiary exemption domestically), the effective tax on repatriation is just 5% — one of the lowest rates available.

Can the French parent fund the Indian WOS through debt as well as equity?

Yes. The French parent can provide inter-company loans (External Commercial Borrowings) to the Indian WOS, subject to RBI regulations on ECB. Interest payments are taxed at 10% under the DTAA. However, India's thin capitalisation rules (Section 94B) limit interest deduction to 30% of EBITDA for associated enterprise debt, so the debt-equity mix must be carefully structured.

Is the Indian WOS eligible for the India-France social security agreement?

Yes. French employees seconded to the Indian WOS can claim exemption from Indian social security (EPF/ESI) for up to 5 years under the bilateral agreement. They must continue contributing to the French system and obtain a Certificate of Coverage before deputation.

What happens if FC-GPR filing is delayed beyond 30 days?

Late filing of FC-GPR attracts compounding penalties under FEMA. The RBI can impose penalties up to three times the amount involved in the contravention. In practice, delays of a few days can be regularised through a compounding application, but chronic non-compliance can trigger enforcement action by the Enforcement Directorate.

How long does it take to fully operationalise an Indian WOS from France?

Incorporation and basic setup take 5-7 weeks. However, full operationalisation — including hiring staff, setting up office, obtaining sector-specific licences (FSSAI, BIS, drug licence as applicable), implementing accounting systems, and establishing banking relationships — typically takes 3-4 months. Plan for a 6-month runway from decision to first revenue.