Set Up a Wholly Owned Subsidiary in India from New Zealand

How to Register a Wholly Owned Subsidiary in India from New Zealand

A Wholly Owned Subsidiary (WOS) is a company incorporated in India where 100% of the share capital is held by a foreign parent company. For New Zealand businesses looking to establish a permanent, fully controlled presence in India, a WOS offers the most comprehensive structure. Unlike a branch office or LLP, a WOS is an independent Indian legal entity that can engage in any lawful commercial activity, including manufacturing, trading, services, and distribution.

With bilateral merchandise trade between India and New Zealand reaching USD 1.3 billion in FY 2024-25 and the India-New Zealand Free Trade Agreement signed on 27 April 2026, the economic case for New Zealand companies establishing a subsidiary in India is stronger than it has been. The FTA carries a New Zealand commitment to promote private-sector investment into India with the aim of increasing it by USD 20 billion over 15 years, and India has opened almost 100 services sectors beyond its WTO GATS commitments. The agreement has been signed but has not yet entered into force.

A WOS gives the New Zealand parent company complete control over the Indian operation's strategy, management, intellectual property, and profit distribution. The parent company's board resolution authorizes the Indian incorporation, determines the authorized capital, and appoints directors. The subsidiary operates as a Private Limited Company under the Companies Act 2013, with the New Zealand parent as the sole shareholder.

FDI Route and Regulatory Requirements

Setting up a WOS in India from New Zealand falls under the automatic route for most sectors. This means the New Zealand parent company does not need prior approval from the Reserve Bank of India (RBI) or the Department for Promotion of Industry and Internal Trade (DPIIT). The company can be incorporated, receive investment funds, and begin operations without waiting for government clearance.

100% FDI under the automatic route is permitted in sectors including information technology, manufacturing, food processing, consulting, healthcare, renewable energy, infrastructure, e-commerce (marketplace model), and most professional services. Certain sectors carry sectoral caps: insurance (100% under the automatic route: the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025 came into force on 5 February 2026 and was operationalised for foreign investors by the FEM (Non-Debt Instruments) (Second Amendment) Rules, 2026 notified on 2 May 2026, subject to IRDAI registration), defence (74% automatic, 100% government route), telecom (100% with conditions), and multi-brand retail (51% government route). Sectors like real estate business, gambling, and tobacco manufacturing are prohibited entirely.

New Zealand does not share a land border with India, so Press Note 3 (2020) restrictions do not apply. The key regulatory frameworks are the Foreign Exchange Management Act (FEMA), the Companies Act 2013, and the Consolidated FDI Policy. For a WOS specifically, the New Zealand parent must pass a board resolution authorizing the Indian investment, specifying the authorized capital, nominee directors, and business activities of the subsidiary.

DTAA Benefits for New Zealand Investors

The India-New Zealand DTAA, signed in 1986 and updated through protocols in 1996, 1999, and 2016, provides substantial tax savings on cross-border payments between the WOS and its New Zealand parent. Key treaty rates include:

• Dividends: 15% withholding tax (versus 20% domestic rate for non-treaty countries)
• Interest: 10% withholding tax on loan interest paid to the New Zealand parent
• Royalties: 10% withholding tax on IP licensing fees, technology transfers, and trademark royalties
• Fees for Technical Services (FTS): 10% under the treaty

For a WOS, these treaty rates are particularly valuable because the subsidiary frequently makes intercompany payments to its parent for management services, technology licenses, brand usage fees, and loan repayments. The 10% rate on royalties and FTS represents a significant saving compared to the 20% domestic rate. To claim treaty benefits, the New Zealand parent must provide a valid Tax Residency Certificate (TRC) from Inland Revenue New Zealand and Form 10F. The India-New Zealand treaty is a covered tax agreement under the Multilateral Instrument, so treaty benefits are also subject to the principal purpose test. Comprehensive transfer pricing documentation is mandatory for all intercompany transactions to ensure arms-length pricing.

Document Requirements and Authentication

Both New Zealand and India are members of the Hague Apostille Convention. New Zealand acceded on 7 February 2001, with the Convention in force for New Zealand from 22 November 2001, so document authentication follows the streamlined apostille process through the Authentication Unit of the Department of Internal Affairs (DIA) in Wellington, not the Ministry of Foreign Affairs and Trade.

The New Zealand parent company must prepare and apostille the following documents for a WOS incorporation:

• Board resolution of the New Zealand parent company authorizing the Indian subsidiary, specifying authorized capital, business activities, and nominated directors (notarized and apostilled)
• Certificate of incorporation of the New Zealand parent company from the Companies Office (certified and apostilled)
• Passport copies of all proposed directors and the authorized signatory (notarized and apostilled)
• Address proof of New Zealand-based directors (utility bill or bank statement, not older than 2 months, notarized and apostilled)
• Memorandum and Articles of Association of the New Zealand parent (certified copy, apostilled)
• Power of Attorney in favour of an Indian representative to execute incorporation formalities

Standard processing at the DIA Authentication Unit takes up to 15 working days at NZD 37 per apostille certificate, with an urgent 5-working-day service for an additional NZD 120. Each director also needs a Digital Signature Certificate (DSC) from an Indian Certifying Authority, obtainable remotely through video verification.

Step-by-Step Registration Process

The WOS incorporation follows the standard SPICe+ process through the MCA portal, with additional post-incorporation RBI filings specific to foreign-owned entities:

1. Parent company board resolution: The New Zealand parent passes a board resolution authorizing the Indian subsidiary, specifying authorized and paid-up capital, business objectives, and director nominations. This forms the foundational document for the entire process.
2. Obtain DSCs: All proposed directors apply for Digital Signature Certificates from an Indian Certifying Authority. Remote video KYC is available for New Zealand-based directors. Timeline: 1-2 business days.
3. Name reservation (SPICe+ Part A): Propose up to two names for the subsidiary. MCA approves or suggests alternatives. Timeline: 1-2 business days.
4. Filing SPICe+ Part B: Submit the incorporation application with the New Zealand parent as sole shareholder. Include MoA, AoA, director details, registered office address, and authorized capital. PAN, TAN, GST, EPFO, and ESIC registrations are processed simultaneously.
5. Certificate of Incorporation: ROC issues the Certificate of Incorporation with CIN, PAN, and TAN. Timeline: 5-7 business days.
6. Open Indian bank account: Open a bank account in the subsidiary's name with a bank experienced in handling foreign-owned entities (HDFC, ICICI, SBI, or Kotak). Timeline: 1-2 weeks.
7. Receive FDI and allot shares: The New Zealand parent remits the investment amount to the subsidiary's Indian bank account. The subsidiary allots shares to the parent and files Form FC-GPR with the RBI through the FIRMS/SMF portal within 30 days.
8. Downstream investment reporting: If the WOS plans to make further investments in India, additional RBI reporting under downstream investment regulations may apply.

Timeline and Costs

The end-to-end timeline for a New Zealand company to set up a WOS in India is typically 5-7 weeks:

Estimated costs:

• Government fees (MCA): INR 2,000-15,000 depending on authorized capital
• DSC: INR 1,500-2,500 per director
• Stamp duty: Varies by state (typically 0.15%-0.25% of authorized capital)
• Professional fees: INR 25,000-75,000 for a CA/CS firm handling WOS incorporation
• Apostille fees (New Zealand): NZD 37 per apostille certificate, plus courier charges

Post-Registration Compliance

A WOS in India must comply with both MCA and RBI regulations. Key obligations include:

• Board meetings: Minimum 4 per year, at least one every 120 days
• AGM: Within 6 months of financial year-end (by September 30)
• ROC filings: AOC-4 (financial statements) within 30 days of AGM; MGT-7 (annual return) within 60 days
• Statutory audit: Mandatory annual audit by a practising Chartered Accountant
• Transfer pricing report: Form 3CEB is required for any intercompany transaction with the New Zealand parent regardless of value; the INR 1 crore threshold only governs the Rule 10D documentation-maintenance relief
• Income tax return: Due 30 November (if TP audit applies) or 31 October
• GST returns: Monthly or quarterly if GST-registered
• FLA return: Annual Foreign Liabilities and Assets return to RBI by July 15
• DIR-3 KYC: Annual director KYC by September 30

For a comprehensive calendar, refer to our Compliance Calendar and Annual Compliance guide.

Common Challenges for New Zealand Companies

• Resident director requirement: At least one director must be an Indian resident (182+ days presence in the financial year, per Section 149(3)). New Zealand companies typically appoint a nominee resident director initially and transition to a permanent India-based executive as the subsidiary scales.
• Authorized capital planning: The authorized capital in the MoA sets the upper limit for equity that can be issued without amending the MoA. New Zealand parents should plan authorized capital with future fundraising and expansion in mind, as increasing it later involves additional ROC filings and stamp duty.
• Transfer pricing scrutiny: India's tax authorities closely examine intercompany transactions in WOS structures. The New Zealand parent should establish arms-length pricing for all management fees, royalties, and intercompany loans from the outset, with proper benchmarking studies and documentation.
• Bank account delays: Foreign-owned WOS entities face more rigorous bank KYC requirements. Choosing a bank with an established foreign entity desk (HDFC, ICICI, or SBI) and preparing all KYC documents in advance can reduce delays significantly.
• Repatriation compliance: Profit repatriation from the WOS to the New Zealand parent must comply with FEMA regulations, including proper deduction of withholding tax at DTAA rates, obtaining CA certificates, and maintaining proper documentation for each remittance.

Frequently Asked Questions

Can a New Zealand company own 100% of an Indian subsidiary?

Yes. India permits 100% FDI under the automatic route in most sectors. A New Zealand company can be the sole shareholder of an Indian Pvt Ltd, making it a Wholly Owned Subsidiary. No government approval is needed for sectors where 100% FDI is allowed under the automatic route.

What is the difference between a WOS and a regular Pvt Ltd?

Structurally, both are Private Limited Companies under the Companies Act 2013. The distinction is ownership: a WOS has a single foreign parent as its sole shareholder (100% ownership), while a regular Pvt Ltd may have multiple shareholders, including Indian residents. The compliance requirements are identical, but a WOS typically has additional transfer pricing obligations due to intercompany transactions.

Does the New Zealand parent need to appoint Indian directors?

At least one director must be an Indian resident (182+ days in the financial year, per Section 149(3)). The New Zealand parent can appoint its own executives as additional directors. Many New Zealand companies use a nominee resident director service initially while setting up their India team.

How is profit repatriated from the Indian WOS to New Zealand?

Profits can be repatriated via dividends (subject to 15% withholding tax under DTAA), royalties for IP usage (10% WHT), management or technical service fees (10% WHT), or loan interest repayments (10% WHT). Each payment must comply with FEMA regulations, transfer pricing rules, and RBI reporting requirements.

What minimum capital is needed for a WOS?

There is no statutory minimum paid-up capital. However, the authorized capital should reflect the subsidiary's planned operations and future investment needs. Most WOS entities start with an authorized capital of INR 10 lakh to INR 1 crore, depending on the industry and scale of operations.

Can the WOS make downstream investments in other Indian companies?

Yes, subject to FEMA downstream investment regulations. The WOS must comply with sectoral caps, pricing guidelines, and reporting requirements for any further equity investments in Indian entities. Downstream investments by a WOS are treated as indirect foreign investment.

What are the annual compliance costs for a WOS in India?

Annual compliance costs typically range from INR 1.5 lakh to INR 5 lakh, covering statutory audit fees, ROC filing charges, income tax return preparation, GST compliance, transfer pricing documentation, and professional advisory fees. The exact amount depends on the complexity of operations and volume of intercompany transactions.