Set Up a Wholly Owned Subsidiary in India from Mexico

How to Register a Wholly Owned Subsidiary in India from Mexico

A Wholly Owned Subsidiary (WOS) is the preferred market-entry structure for Mexican companies that want full operational and strategic control over their Indian business. Unlike a joint venture or branch office, a WOS allows the Mexican parent to hold 100% of the equity shares in the Indian entity, making it a separate legal entity with its own PAN, GST registration, and compliance obligations.

Mexico-India bilateral trade reached a record US$11.71 billion in 2024, with growing investment flows across sectors including automotive, pharmaceuticals, IT, and agriculture. The two nations celebrated 75 years of diplomatic relations in 2025, marking an era of deepening economic cooperation. A WOS in India is structured as a Private Limited Company under the Companies Act, 2013, where the Mexican parent company (or its nominees) holds all the shares. This structure is ideal for manufacturing, IT services, professional services, and any operation requiring full brand and IP control.

For a comparison of entity types available to Mexican investors, see Branch Office vs Subsidiary and WOS vs LLP for Foreign Investors.

FDI Route and Regulatory Requirements

Mexican companies can establish a WOS in India through the Automatic Route in most sectors. Under this route, no prior approval from the RBI or the central government is required. The parent company simply incorporates the subsidiary and files the requisite post-incorporation RBI forms.

Key regulatory considerations for Mexican WOS investors:

• 100% FDI permitted: In sectors like IT/ITES, manufacturing, infrastructure, e-commerce (marketplace model), food processing, healthcare, and renewable energy
• Sector caps and conditions apply: insurance (100% under the automatic route, subject to IRDAI conditions), multi-brand retail (51%), defence (74% automatic, 100% with approval), banking (74%), print media (26%)
• Press Note 3 exemption: Mexico is not a neighbouring country, so the additional security screening under Press Note 3 (2020) does not apply
• Parent company board resolution: The Mexican parent's board (Consejo de Administración) must pass a resolution (Acta de Asamblea) authorising the establishment of the Indian subsidiary and appointing directors

The WOS is registered as a Private Limited Company with the Registrar of Companies (ROC) and must comply with both the Companies Act, 2013 and FEMA regulations. For more on the regulatory framework, see our FDI Advisory service page and Automatic Route vs Government Approval.

DTAA Benefits for Mexican Investors

The India-Mexico Double Taxation Avoidance Agreement, signed on 10 September 2007 and in force since 2010, provides significant tax efficiencies for WOS structures. The India-Mexico DTAA offers one of the most favourable withholding rate structures among India's tax treaties, with a uniform 10% cap across all major payment categories:

• Dividends: Maximum 10% withholding in India (Article 10). The Mexican parent can claim a foreign tax credit against its Mexican tax liability
• Interest on intercompany loans: Capped at 10% (Article 11)
• Royalties and technical service fees: Capped at 10% (Article 12)
• Capital gains on share transfer: Specific provisions apply based on the nature of assets held by the subsidiary

For a WOS structure, the DTAA is particularly valuable because all profit repatriation flows through dividend or intercompany payment channels. The 10% uniform rate is significantly more favourable than the 15% rates common in many other Indian DTAAs (such as those with the USA, Canada, and Australia). Proper structuring of management fees, royalties, and intercompany pricing can optimise the overall effective tax rate across both jurisdictions. See our DTAA Master Guide for detailed scenarios.

Document Requirements and Authentication

Mexico has been a party to the Hague Convention on Apostille since 14 August 1995. Mexican corporate documents require apostilling by the Secretaría de Relaciones Exteriores (SRE) or authorised state-level bodies before submission to Indian authorities. This is significantly simpler than embassy attestation. Compare the two processes in our Apostille vs Embassy Attestation guide.

Documents from the Mexican Parent Company

• Board resolution (Acta de Asamblea) authorising incorporation of the Indian WOS, appointment of directors, and authorised capital (apostilled with English translation)
• Certificate of Incorporation (Acta Constitutiva) of the Mexican parent (apostilled with English translation)
• Bylaws (Estatutos Sociales) of the parent company (apostilled with English translation)
• Latest audited financial statements of the parent (apostilled with English translation)
• Passport copies of all proposed directors (notarised and apostilled)
• Proof of address of directors (notarised and apostilled, not older than 2 months)
• Power of Attorney (Poder Notarial) for the authorised representative in India (apostilled with English translation)
• Shareholder details and beneficial ownership declaration

Documents Prepared in India

• Digital Signature Certificates (DSC) for all directors
• Director Identification Numbers (DIN)
• Memorandum of Association (MoA) of the Indian subsidiary
• Articles of Association (AoA) of the Indian subsidiary
• Registered office proof (lease agreement + landlord NOC + utility bill)

Translation Requirements

All Mexican corporate documents are in Spanish and must be professionally translated into English before submission. The translated documents must be notarised and apostilled. Budget an additional 1-2 weeks for translation, particularly for lengthy documents like the Acta Constitutiva and financial statements.

Step-by-Step Registration Process

Setting up a WOS follows the same incorporation process as a Private Limited Company via the SPICe+ portal, with additional FDI-related filings:

Step 1: Mexican Parent Passes Board Resolution

The parent company's board (Consejo de Administración) resolves to incorporate the Indian subsidiary, specifying the authorised capital, proposed directors, and business objects. This resolution is translated, notarised, and apostilled through the SRE.

Step 2: Obtain DSCs and DINs

Apply for Digital Signature Certificates for all proposed directors. The DINs are obtained through the SPICe+ form itself. At least one director must be an Indian resident (182+ days presence during the financial year).

Step 3: Name Reservation and SPICe+ Filing

Reserve the company name through Part A of the SPICe+ form (the RUN service applies only to renaming an existing company, not to reserving a name for a new incorporation). File SPICe+ Part B with the MoA (INC-33), AoA (INC-34), and all supporting documents. The ROC issues the Certificate of Incorporation along with PAN and TAN.

Step 4: Open Bank Account and Receive Capital

Open a current account with an Authorised Dealer (AD) bank. The Mexican parent remits the share subscription amount. The bank issues the Foreign Inward Remittance Certificate (FIRC), which is essential for RBI reporting.

Step 5: Allot Shares and File FC-GPR

The Indian subsidiary's board allots shares to the Mexican parent. Within 30 days of allotment, file Form FC-GPR on the RBI's FIRMS/SMF portal. Required supporting documents include the FIRC, KYC of the foreign investor, valuation certificate (from a SEBI-registered merchant banker or CA), and the company secretary's compliance certificate.

Step 6: Post-Incorporation Registrations

Apply for GST registration, Shops and Establishment registration, Professional Tax registration (state-specific), and any industry-specific licenses or permits.

Timeline and Costs

The total timeline for establishing a WOS in India from Mexico is 6-10 weeks:

Cost Breakdown

• Government fees (ROC/MCA): INR 5,000-15,000 (based on authorised capital; WOS typically have higher authorised capital)
• Stamp duty: INR 5,000-20,000 (varies by state)
• DSC: INR 1,500-2,500 per director
• Professional fees (CS/CA/legal): INR 25,000-75,000
• Valuation report for FC-GPR: INR 15,000-30,000
• Apostille and translation charges in Mexico: MXN 3,000-8,000 per document
• Total estimated cost: INR 75,000-1,50,000 plus apostille and translation costs

Post-Registration Compliance

A WOS in India has more extensive compliance obligations than a branch or liaison office because it is a full legal entity:

• Annual ROC filings: AOC-4 (financial statements) and MGT-7 (annual return)
• Income tax return: Filed annually; corporate tax at 22% (effective ~25.17%) under Section 115BAA, or 15% (effective ~17.16%) under Section 115BAB for new manufacturing companies that commenced production by 31 March 2024 (that window is now closed to new entrants)
• GST returns: Monthly GSTR-1 and GSTR-3B if GST-registered
• RBI/FEMA compliance: annual FLA Return (by 15 July each year), FC-GPR for each equity issuance, and FEMA reporting through FIRMS/SMF
• Transfer pricing documentation: Form 3CEB is required for any international transaction between the WOS and the Mexican parent regardless of value; the INR 1 crore threshold applies only to the Rule 10D documentation-maintenance relief
• Board meetings: Minimum four per year, at least one per quarter
• Statutory audit: Annual audit by a practising Chartered Accountant

Beacon Filing provides comprehensive annual compliance, FEMA/RBI compliance, and corporate tax filing services for WOS entities.

Common Challenges for Mexican Companies

Valuation Requirements for FC-GPR

The RBI requires a valuation report from a SEBI-registered merchant banker or a practising Chartered Accountant for every FC-GPR filing. For a newly incorporated WOS, the valuation is typically at face value, but subsequent share issuances require a full DCF or NAV-based valuation. Delays in obtaining the valuation report are a common bottleneck.

Resident Director Requirement

At least one director must be an Indian resident. For WOS structures, companies typically appoint a senior Indian employee or a professional nominee director. This individual has fiduciary duties under Indian law and should be carefully selected.

Spanish Documentation and Translation

Mexican corporate documents (Acta Constitutiva, Estatutos Sociales, Actas de Asamblea, Poderes Notariales) are all in Spanish. Each document requires professional English translation, notarisation, and apostilling before submission to Indian authorities. This adds 1-3 weeks and significant cost to the process. Companies should budget for certified legal translations and begin the process well in advance.

Significant Time Zone Gap

The 11.5-hour time difference between Mexico (Central Time) and India (IST) creates very limited overlapping business hours. Real-time coordination for bank KYC video calls, document verification sessions, and urgent approvals requires careful scheduling. Most Mexican companies find it practical to designate an India-based representative to handle time-sensitive matters.

Intercompany Transfer Pricing

The Mexican parent and Indian WOS will inevitably have intercompany transactions (management fees, IP licenses, shared services). All such transactions must be at arm's length pricing with contemporaneous documentation. The Indian tax authorities actively scrutinise WOS transfer pricing arrangements. The favourable 10% DTAA rate on royalties and technical fees makes India-Mexico structures particularly attractive for IP licensing arrangements.

Permanent Establishment Risk

If the Mexican parent's employees or directors exercise decision-making authority in India beyond their WOS board roles, the parent may create a Permanent Establishment (PE) in India, triggering separate tax obligations. Maintain clear operational boundaries between the parent and the WOS.

For comprehensive guidance, explore our Foreign Subsidiary Registration service and the Mexico country guide.

Frequently Asked Questions

What is the difference between a WOS and a Private Limited Company in India?

A WOS is legally structured as a Private Limited Company. The term "Wholly Owned Subsidiary" refers to the ownership structure where a single foreign parent company holds 100% of the shares. The incorporation process, compliance obligations, and legal framework are identical to any other Pvt Ltd company under the Companies Act, 2013.

Can the Mexican parent hold 100% shares in the Indian WOS?

Yes, in sectors where 100% FDI is permitted under the automatic route. The parent company (or its nominees) can hold all shares. There is no requirement for an Indian shareholder in a WOS, although at least one director must be an Indian resident.

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

FC-GPR (Foreign Currency Gross Provisional Return) is a mandatory RBI form filed through the FIRMS portal within 30 days of allotting shares to a foreign investor. It confirms the FDI transaction details including the amount invested, number of shares allotted, and valuation. Late filing attracts a Late Submission Fee of INR 7,500 plus 0.025% of the amount involved per year of delay (computed proportionately by month).

Does the Mexican parent need to maintain minimum capital in the Indian WOS?

India does not prescribe a minimum paid-up capital for Private Limited Companies. However, the authorised capital should be sufficient for the WOS's operational needs and planned activities. The RBI requires the share price to comply with FEMA pricing guidelines based on fair market valuation.

Can the WOS repatriate 100% of profits to Mexico?

Yes. After paying Indian corporate tax and the applicable dividend withholding tax (capped at 10% under the India-Mexico DTAA, one of the lowest rates among India's treaties), the WOS can repatriate all profits to the Mexican parent through dividends. The repatriation is processed through an Authorised Dealer bank with no RBI approval required for current account transactions.

How is the WOS taxed differently from a branch office in India?

A WOS (Pvt Ltd) pays corporate tax at 22% (effective ~25.17%) on its net profits. A branch office of a foreign company pays tax at 35% (effective ~38.22%, since Financial Year 2024-25 under the Finance (No.2) Act 2024) on its India-attributable income. This significant tax rate difference is a key reason most Mexican companies prefer the WOS structure. See our Branch Office vs Subsidiary comparison.