Set Up a Wholly Owned Subsidiary in India from Norway

How to Set Up a Wholly Owned Subsidiary in India from Norway

A Wholly Owned Subsidiary (WOS) is the ideal corporate structure for Norwegian companies that require full operational control in India. A WOS is a separate Indian legal entity — incorporated as a Private Limited Company under the Companies Act, 2013 — where the Norwegian parent company holds 100% of the equity shares. This structure provides complete management autonomy, limited liability protection for the parent, and the ability to carry out any lawful commercial activity in India.

Norway-India commercial ties have strengthened significantly. Over 105 Norwegian companies operate in India through joint ventures and wholly owned subsidiaries across shipbuilding, petroleum services, marine engineering, hydropower, clean energy, and IT. Major Norwegian corporations such as Statkraft, DNB, Aker Solutions, Jotun, Kongsberg, and DNV have substantial Indian operations. The historic India-EFTA Trade and Economic Partnership Agreement (TEPA), signed on 10 March 2024 and effective from 1 October 2025, commits USD 100 billion in EFTA investments and 1 million direct jobs in India over 15 years — the first binding investment pledge in any Indian free trade agreement.

A WOS gives the Norwegian parent complete control over strategic decisions, intellectual property, and profit repatriation. This guide covers every step from FDI regulatory requirements to post-incorporation compliance.

FDI Route and Regulatory Requirements

Norwegian companies setting up a WOS in India benefit from the automatic route for Foreign Direct Investment. No prior approval from the Reserve Bank of India (RBI) or the Indian government is required. The Norwegian parent invests in its Indian subsidiary and reports the transaction to the RBI within prescribed timelines.

100% FDI Under the Automatic Route

India permits 100% FDI through the automatic route in most sectors. Key sectors particularly relevant to Norwegian investors include:

• Manufacturing (all categories)
• Oil and gas exploration and refining (private sector)
• Shipbuilding and marine engineering
• Renewable energy and hydropower
• Information technology and IT-enabled services
• Environmental services and waste management
• Infrastructure and construction development
• Food processing (including seafood)
• Insurance (100% under the automatic route, raised from 74% by the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025, in force since 5 February 2026, subject to conditions)

Sectors with FDI Caps

Certain sectors maintain restrictions:

• Defence: 74% under automatic route; beyond 74% requires case-by-case government approval
• Telecom: 100% under the automatic route (raised from 49% automatic by Press Note 4 of 2021), subject to the applicable licensing and security conditions
• Banking (private sector): 74% overall — automatic route up to 49%, government approval beyond 49% and up to 74%
• Mining (non-coal): 100% under automatic route, subject to applicable licences

India-EFTA TEPA Advantages for WOS

The TEPA provides Norwegian companies with customs duty exemptions on most goods exported to India, enhanced intellectual property protection, and a more predictable regulatory framework. A WOS can maximise TEPA benefits by importing Norwegian components, technology, and equipment into India at preferential duty rates, significantly improving the cost structure of Indian operations.

Press Note 3 — Not Applicable to Norway

Press Note 3 (2020) restrictions on investments from neighbouring countries do not apply to Norway. Norwegian investments do not require any additional security clearance or government approval beyond standard requirements.

Key FEMA Requirements

All WOS establishments must comply with the Foreign Exchange Management Act (FEMA) and the Non-Debt Instrument (NDI) Rules. The Norwegian parent must ensure that share issuance pricing complies with FDI pricing guidelines — shares must be issued at or above fair market value determined by a registered valuer using internationally accepted methodologies.

DTAA Benefits for Norwegian Investors

The India-Norway Double Taxation Avoidance Agreement, originally signed on 31 December 1986 and replaced by a new agreement signed on 2 February 2011 (approved by the Indian Cabinet on 20 October 2010), provides favourable tax treatment for wholly owned subsidiaries.

Treaty Rates for WOS Transactions

• Dividends: 10% withholding tax (domestic rate: 20%). This is among the most favourable dividend rates in India's treaty network, making Norwegian-owned subsidiaries particularly tax-efficient for profit repatriation.
• Interest: 10% (domestic rate: 20%). Relevant if the Norwegian parent provides inter-company loans to the Indian WOS.
• Royalties: 10% (domestic rate: 20% under section 115A, post Finance Act 2023). Applies to technology licensing fees paid by the WOS to the Norwegian parent.
• Fees for Technical Services: 10%. Covers management fees, consulting fees, and technical support charges.

Comparative Tax Advantage

The India-Norway DTAA offers one of the lowest combined dividend withholding rates among Nordic countries. At 10%, it is more favourable than the India-Denmark DTAA (15-25%) and comparable to the India-Sweden DTAA (10%). This makes Norway an efficient holding jurisdiction for Indian subsidiary structures.

Transfer Pricing Considerations

Transactions between the Norwegian parent and the Indian WOS must comply with India's transfer pricing regulations. All inter-company transactions — management fees, royalties, shared services, and goods transfers — must be at arm's length prices. Form 3CEB, certified by an accountant, must be filed for any international transaction with the Norwegian parent, irrespective of value. Where aggregate international transactions exceed INR 1 crore, the WOS must additionally maintain transfer pricing documentation under Rule 10D.

Permanent Establishment Risk

Norwegian companies should structure WOS operations to avoid creating an unintended Permanent Establishment (PE) for the parent. If the Indian WOS acts as a dependent agent habitually concluding contracts on behalf of the Norwegian parent, additional PE tax obligations may arise.

Document Requirements and Authentication

Norway has been a member of the Hague Apostille Convention since 1983. Documents from Norway must be apostilled for use in India, which is faster than embassy attestation.

Documents from the Norwegian Parent Company

• Certificate of Registration from Bronnoysundregistrene (Norwegian Register Centre) — apostilled
• Board resolution of the Norwegian parent authorising the establishment of an Indian subsidiary and appointing authorised signatories — apostilled
• Memorandum of Association (Vedtekter) and Articles of Association of the Norwegian parent — apostilled
• Latest audited financial statements of the Norwegian parent company
• Power of Attorney in favour of the Indian authorised representative — apostilled
• Declaration of source of funds for the investment

Documents for Directors of the Indian WOS

• Passport copies of all proposed directors (notarised and apostilled)
• Proof of residential address (bank statement or utility bill, not older than 2 months) — notarised and apostilled for Norwegian directors
• Digital Signature Certificates (DSC) for all directors
• Passport-size photographs
• PAN card of the Indian resident director (if already existing)

Apostille Process in Norway

Apostilles in Norway are issued exclusively by the County Governor's office (Statsforvalteren). Documents must first be notarised by a Public Notary and then submitted for apostille. Processing takes 3-7 business days. The apostille is a standardised certificate in accordance with the 1961 Hague Convention.

Step-by-Step Registration Process

Setting up a WOS follows the same incorporation procedure as a Private Limited Company, with additional parent company documentation and RBI compliance steps.

Step 1: Norwegian Parent Company Board Approval

The board of directors of the Norwegian parent (Aksjeselskap or Allmennaksjeselskap) must pass a formal resolution approving the establishment of an Indian subsidiary. This resolution should specify the authorised capital, initial investment amount, names of proposed directors, and business activities. The resolution must be apostilled by the Statsforvalteren.

Step 2: Obtain Digital Signature Certificates

All proposed directors need a Class 3 DSC from an Indian certifying authority. Norwegian directors can complete the process through video-based verification. Timeline: 1-2 working days.

Step 3: Apply for DIN via SPICe+

Director Identification Numbers for up to three directors are applied for within the integrated SPICe+ form. A minimum of two directors is required, with at least one being a resident of India (having stayed in India for at least 182 days in the preceding financial year).

Step 4: Reserve the Company Name

Submit the proposed name through SPICe+ Part A. For a WOS, the name often incorporates the Norwegian parent's brand name followed by "India Private Limited." Name approval takes 2-3 working days.

Step 5: File SPICe+ Part B for Incorporation

File the comprehensive incorporation form including e-MOA, e-AOA, and applications for PAN, TAN, GST registration, EPFO, and ESIC. The authorised capital of the WOS should reflect the intended investment quantum from Norway.

Step 6: Receive Certificate of Incorporation

The Registrar of Companies issues the Certificate of Incorporation upon successful verification. Timeline: 7-15 working days.

Step 7: Open Bank Account and Receive Capital

Open a current account with an Authorised Dealer (AD) bank in India. The Norwegian parent remits the share subscription amount via SWIFT transfer. The AD bank issues a Foreign Inward Remittance Certificate (FIRC).

Step 8: Allot Shares and File FC-GPR

Allot shares to the Norwegian parent within 60 days of receiving the investment funds. File Form FC-GPR on the RBI's FIRMS portal within 30 days of share allotment. A valuation report from a registered valuer is mandatory. Late filing attracts a Late Submission Fee of INR 7,500 plus 0.025% of the investment amount per year of delay (rounded up to the nearest month).

Timeline and Costs

Total estimated timeline: 4-8 weeks from Norwegian parent board resolution to fully operational WOS.

Total estimated cost: INR 1,00,000-3,00,000 (approximately NOK 11,000-33,000) including government fees, professional fees, and valuation costs. The actual capital investment is separate and depends on the business plan.

Post-Registration Compliance

A WOS in India has extensive ongoing compliance obligations with the MCA, RBI, and Income Tax Department.

Annual MCA Filings

• Annual Return (MGT-7): Filed within 60 days of the AGM.
• Financial Statements (AOC-4): Filed within 30 days of the AGM.
• Board Meetings: Minimum 4 per year with a gap of not more than 120 days.
• Annual General Meeting: Must be held within 6 months of the financial year end.

RBI and FEMA Compliance

• FLA Return: Annual Return on Foreign Liabilities and Assets, due by July 15.
• FC-GPR: Filed within 30 days of every fresh share allotment to the Norwegian parent.
• ECB Reporting: If any external commercial borrowings are raised from the parent.
• FEMA compliance: Ongoing monitoring of all cross-border transactions.

Tax Compliance

• Corporate Tax Return: Due by October 31 (November 30 for transfer pricing cases).
• GST Returns: Monthly or quarterly depending on turnover.
• Transfer Pricing Report (Form 3CEB): Due by October 31 where there is any international transaction with the Norwegian parent, regardless of value.
• TDS Returns: Quarterly filing for all tax deducted at source.
• Advance Tax: Quarterly instalments on June 15, September 15, December 15, and March 15.

Common Challenges for Norwegian Companies

Capital Structuring and Pricing

Under FEMA regulations, shares in the Indian WOS must be issued at or above fair market value determined by a registered valuer. For initial investments where the subsidiary has no operating history, the valuation is typically based on net asset value plus projected cash flows. Work with a qualified FDI advisor to structure the investment optimally.

Maritime and Energy Sector Approvals

Over 35% of Norwegian companies in India are in the maritime sector, and many are in oil, gas, and renewable energy. These sectors require additional licences and permits beyond standard company registration — including approvals from the Directorate General of Shipping, Ministry of Petroleum and Natural Gas, and state pollution control boards. Norwegian companies should factor these sector-specific timelines into their project planning.

Maximising TEPA Benefits

The India-EFTA TEPA provides Norwegian companies with preferential customs duty treatment. WOS structures should be designed to maximise these benefits — for instance, importing Norwegian-manufactured components and equipment into the Indian subsidiary at reduced duty rates rather than sourcing from third countries. Professional guidance on rules of origin and preferential tariff classification is essential.

Transfer Pricing in Technical Services

Norwegian companies frequently provide technical services, engineering support, and management oversight to their Indian WOS. The 10% withholding rate on fees for technical services under the DTAA is favourable, but all charges must be at arm's length and supported by comprehensive benchmarking studies to withstand scrutiny by Indian transfer pricing officers.

Resident Director Requirement

At least one director must have resided in India for 182 days in the preceding financial year. Many Norwegian companies use a resident director service initially, transitioning to a full-time Indian executive as operations scale.

Frequently Asked Questions

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

Structurally, a WOS is a Private Limited Company. The term "Wholly Owned Subsidiary" refers to the ownership structure where a single foreign parent holds 100% of the equity. The legal form, registration process, and compliance requirements are identical to any Private Limited Company under the Companies Act, 2013.

How does the India-EFTA TEPA benefit my WOS?

TEPA provides customs duty exemptions on most goods exported from Norway to India. Your WOS can import Norwegian technology, components, and equipment at preferential rates. The agreement also commits USD 100 billion in EFTA investments over 15 years, creating a supportive bilateral framework.

Can the Norwegian parent provide loans to its Indian WOS?

Yes. The Indian WOS can receive External Commercial Borrowings (ECB) from the Norwegian parent, subject to RBI regulations. The interest rate must comply with the all-in-cost ceiling, and borrowings must be reported through Form ECB (for the Loan Registration Number) and the monthly Form ECB-2 return filed with the AD Category-I bank for onward submission to the RBI. Interest withholding is capped at 10% under the DTAA.

Does the Norwegian parent need to visit India for WOS registration?

No. The entire process can be completed remotely. Directors can obtain DSCs through video verification, and apostilled documents can be couriered. However, visiting India is recommended for bank account opening and initial operational setup.

What happens if the FC-GPR filing deadline is missed?

Late filing attracts a Late Submission Fee of INR 7,500 plus 0.025% of the investment amount per year of delay (rounded up to the nearest month). The fee is capped at the total investment amount and the LSF route is available only for delays of up to three years. Persistent non-compliance can lead to FEMA compounding proceedings.

Why is the 10% dividend withholding rate significant?

The 10% rate under the India-Norway DTAA is among the lowest in India's treaty network. It means that when the WOS distributes profits to the Norwegian parent, only 10% is withheld in India. The Norwegian parent can then claim a credit for this tax in Norway, effectively avoiding double taxation on the same income.