Set Up a Wholly Owned Subsidiary in India from Nigeria

How to Register a Wholly Owned Subsidiary in India from Nigeria

A Wholly Owned Subsidiary (WOS) is the preferred market-entry structure for Nigerian companies that want full operational and strategic control over their Indian business. Unlike a joint venture or branch office, a WOS allows the Nigerian 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.

India and Nigeria have one of Africa's strongest bilateral trade relationships. India is the second-largest destination for Nigerian exports (after the Netherlands) and the fourth-largest source of Nigeria's imports (after China, the United States and the Netherlands). Bilateral trade was US$7.13 billion in 2024-25, down from a peak of US$14.95 billion in 2021-22 and running higher again in 2025-26, driven by petroleum, pharmaceuticals, agricultural commodities, and technology services. A WOS in India is structured as a Private Limited Company under the Companies Act, 2013, where the Nigerian parent company (or its nominees) holds all the shares. This structure is ideal for IT services, manufacturing, pharmaceutical distribution, and any operation requiring full brand and IP control.

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

FDI Route and Regulatory Requirements

Nigerian 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 Nigerian 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: insurance (100% under the automatic route, subject to IRDAI registration and to at least one of the chairperson, managing director or chief executive officer being a resident Indian citizen), multi-brand retail (51%, government route), defence (74% automatic, 100% with approval), private-sector banking (74%, of which up to 49% automatic), print media (26%, government route)
• Press Note 3 exemption: Nigeria is not a neighbouring country, so the additional security screening under Press Note 3 (2020) does not apply
• Parent company board resolution: The Nigerian parent's board must pass a resolution 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.

Tax Implications Without a DTAA

India and Nigeria do not have a Double Taxation Avoidance Agreement (DTAA) in force. This has significant implications for the tax efficiency of a WOS structure, particularly for cross-border payments between the Indian subsidiary and the Nigerian parent:

• Dividends: Subject to 20% withholding tax under Indian domestic law (no treaty reduction available)
• Interest on intercompany loans: 20% withholding under domestic law (Section 195 read with Section 115A)
• Royalties and technical service fees: 20% withholding under Indian domestic provisions (Section 115A rate, doubled from 10% effective 1 April 2023)
• Capital gains on share transfer: Taxable in India under domestic provisions without treaty relief

Each of these domestic rates is increased by the applicable surcharge (2% or 5%) and the 4% health and education cess.

For a WOS structure, the absence of a DTAA means all profit repatriation channels carry higher tax costs than they would for investors from DTAA countries. Nigerian companies should carefully structure intercompany transactions to minimise the overall tax burden. Nigeria grants foreign tax credits only under an applicable double tax treaty and gives no general unilateral credit, so Indian tax paid is generally not creditable in Nigeria; certain categories of foreign dividend, interest and royalty income are exempt from Nigerian tax, which mitigates the exposure without systematically removing it. Consult our FDI Advisory team for tax-efficient structuring guidance.

Corporate Tax Advantage of WOS Over Branch Office

Despite the DTAA disadvantage, a WOS (Pvt Ltd) pays corporate tax at 22% (effective approximately 25.17%) on net profits, compared to 35% (effective approximately 36.40%-38.22%) for a branch office taxed as a foreign company. This significant rate difference makes the WOS structure substantially more tax-efficient than a branch office for Nigerian companies generating profits in India.

Document Requirements and Authentication

Nigeria is not a signatory to the Hague Convention on Apostille. Nigerian corporate documents require embassy attestation rather than the simpler apostille process. Documents must first be authenticated by the Ministry of Foreign Affairs in Abuja, then attested by the High Commission of India in Abuja or the Consulate General of India in Lagos. Compare the two processes in our Apostille vs Embassy Attestation guide.

Documents from the Nigerian Parent Company

• Board resolution authorising incorporation of the Indian WOS, appointment of directors, and authorised capital (attested)
• Certificate of Incorporation of the Nigerian parent from the Corporate Affairs Commission (attested)
• Memorandum and Articles of Association of the parent company (attested)
• Latest audited financial statements of the parent (attested)
• Passport copies of all proposed directors (notarised and attested)
• Proof of address of directors (notarised and attested, not older than 2 months)
• Power of Attorney for the authorised representative in India (attested)
• 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)

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: Nigerian Parent Passes Board Resolution

The parent company's board resolves to incorporate the Indian subsidiary, specifying the authorised capital, proposed directors, and business objects. This resolution is authenticated through the Nigerian MFA and Indian High Commission.

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, s.149(3) Companies Act 2013).

Step 3: Name Reservation and SPICe+ Filing

Reserve the company name through SPICe+ Part A (the standalone RUN service is used only to change an existing company's name, not to reserve 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 Nigerian 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 Nigerian 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 licences or permits.

Timeline and Costs

The total timeline for establishing a WOS in India from Nigeria 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
• Attestation charges: US$52 per commercial document at the High Commission of India, Abuja (fee as published in 2026), plus Nigerian notarial and Ministry of Foreign Affairs charges
• Total estimated cost: INR 75,000-1,50,000 plus attestation costs

Post-Registration Compliance

A WOS in India has extensive compliance obligations as 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. The alternative 15% rate (effective ~17.16%) for new manufacturing companies under Section 115BAB required commencement of manufacturing by 31 March 2024, so it is no longer available to newly incorporated companies
• GST returns: Monthly GSTR-1 and GSTR-3B if GST-registered
• RBI/FEMA compliance: the annual Foreign Liabilities and Assets (FLA) return to the RBI by 15 July, FC-GPR for each equity issuance, and FEMA reporting through FIRMS/SMF
• Transfer pricing documentation (Form 3CEB): Form 3CEB is required for any international transaction with the Nigerian parent as an associated enterprise, regardless of value; the INR 1 crore figure is only the threshold for the Rule 10D detailed 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 Nigerian Companies

Absence of DTAA and Higher Tax Costs

Without a DTAA between India and Nigeria, cross-border payments face full Indian domestic withholding rates. Dividends attract 20% withholding, and interest on intercompany loans also attracts 20%. Nigerian companies should model the total tax cost (Indian corporate tax + withholding on repatriation + Nigerian tax, with no treaty credit available in Nigeria for the Indian tax) before finalising the investment quantum and capital structure.

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.

Currency Transfer from Nigeria

Nigeria's Central Bank (CBN) manages forex controls that can complicate outward investment remittances. The Nigerian Naira (NGN) has experienced significant volatility, and obtaining USD or other hard currency for capital transfers requires regulatory compliance. Nigerian companies should plan capital remittances well in advance and engage banks experienced in Nigeria-India corridors.

Intercompany Transfer Pricing

The Nigerian 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. Indian tax authorities actively scrutinise WOS transfer pricing arrangements, and without a DTAA, the resolution of any transfer pricing disputes is more complex as there is no Mutual Agreement Procedure (MAP) available.

Embassy Attestation Complexity

The embassy attestation process for Nigerian documents involves multiple steps: notarisation, authentication by the Ministry of Foreign Affairs in Abuja, and attestation by the Indian High Commission. This multi-step process adds 1-2 weeks compared to apostille countries. Corporate documents from the Corporate Affairs Commission of Nigeria may require additional certification before attestation.

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 Nigerian 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.

How does the absence of a DTAA affect the WOS?

Without a DTAA, cross-border payments (dividends, interest, royalties) are taxed at Indian domestic withholding rates, which are generally higher than treaty rates. There is no Mutual Agreement Procedure for resolving tax disputes, and Nigeria grants foreign tax credits only under its double tax treaties, so Indian tax paid is generally not creditable there.

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 (LSF) payable to the RBI, computed on the amount involved and the length of the delay; paying it does not remove the obligation to report.

Can the WOS repatriate 100% of profits to Nigeria?

Yes. After paying Indian corporate tax and the applicable withholding tax on dividends (20% under domestic law without DTAA), the WOS can repatriate all profits to the Nigerian 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 ~36.4% to ~38.22%, depending on the surcharge slab) on its India-attributable income. This significant tax rate difference is a key reason most Nigerian companies prefer the WOS structure. See our Branch Office vs Subsidiary comparison.

Does the WOS need to comply with transfer pricing rules?

Yes. All international transactions between the Indian WOS and the Nigerian parent (management fees, royalties, intercompany loans, shared services) must comply with arm's length pricing principles, and Form 3CEB must be filed for any such transaction regardless of value. Contemporaneous Rule 10D documentation is required once such transactions exceed INR 1 crore in aggregate during a financial year.