Set Up a Wholly Owned Subsidiary in India from Taiwan

How to Register a Wholly Owned Subsidiary in India from Taiwan

A Wholly Owned Subsidiary (WOS) is a company incorporated under India's Companies Act 2013 where the entire shareholding is held by the Taiwanese parent company. It is a separate Indian legal entity with its own directors, bank accounts, tax registrations, and compliance obligations. A WOS can engage in any lawful business activity permitted under Indian law, including manufacturing, trading, technology development, and services.

Taiwan-India economic ties have deepened considerably. Bilateral trade reached a record US$12.5 billion in 2025, marking a 17% increase over the previous year. Over 250 Taiwanese enterprises have invested in India, with cumulative Taiwanese investment reaching approximately US$1.68 billion. Major Taiwanese investments span electronics manufacturing, semiconductors, smartphone assembly, auto components, textiles, and precision machinery. Companies like Foxconn, Wistron, Pegatron, and Delta Electronics have established significant manufacturing operations in India. A WOS provides the most comprehensive market entry structure, offering full operational control and limited liability for the parent company. For comparisons with other entity types, see Subsidiary vs Branch Office and Private Limited vs LLP.

FDI Route and Regulatory Requirements

Taiwanese companies can invest in India under the automatic route for foreign direct investment. India's FDI policy permits Taiwanese investments through the standard automatic route framework. Press Note 3 (2020), which requires prior government approval for investments from countries sharing a land border with India, does not apply to investments originating from Taiwan.

Practical Considerations for Taiwanese Investors

While India's FDI policy framework treats Taiwan-origin investments favourably under the automatic route, there are practical considerations that Taiwanese companies should be aware of:

• Clear documentation of origin: Ensure the investing entity's Taiwan incorporation is clearly documented. Provide complete corporate chain documentation to the AD bank
• Beneficial ownership transparency: Clearly establish the beneficial ownership structure. If the Taiwanese parent company has significant shareholders from Press Note 3 countries, the beneficial ownership analysis may trigger additional scrutiny
• Professional guidance: Engage a Company Secretary or Chartered Accountant in India experienced with Taiwan-origin FDI to navigate any procedural nuances at the banking or regulatory level

Key Structural Requirements

• Minimum directors: 2 (at least 1 must be an Indian resident who has stayed in India for a minimum of 182 days in the preceding financial year)
• Minimum shareholders: 1 (the Taiwanese parent company can be the sole shareholder)
• Minimum authorised capital: No statutory minimum, but INR 1 lakh is the standard starting point
• Registered office: Must be in India with valid address proof

For understanding the automatic vs government approval route, see Automatic Route vs Government Approval.

Tax Agreement Benefits for Taiwanese Companies

India and Taiwan signed a comprehensive tax agreement on 12 July 2011 through the Taipei Economic and Cultural Center (TECC) in New Delhi and the India-Taipei Association (ITA) in Taipei. This agreement functions as a double taxation avoidance agreement and is recognised under Indian income tax law for claiming treaty benefits. It covers corporate profits, dividends, interest, royalties, technical fees, and capital gains.

Key Treaty Rates

• Dividends: Capped at 12.5% withholding tax in the source territory. Since India abolished the Dividend Distribution Tax in 2020, dividends are taxable in the hands of the recipient, making treaty relief directly applicable
• Interest: Capped at 10% withholding tax (compared to the domestic rate of 20%)
• Royalties and fees for technical services: Capped at 10% (compared to the domestic rate of 20% under Section 115A, plus surcharge and cess)
• Capital gains: Gains from transfer of shares are taxable in the territory where the company is resident, subject to treaty provisions
• Business profits: Taxable only in the territory of residence unless the enterprise has a PE in the other territory

Tax Advantages of a WOS vs Branch Office

A WOS incorporated as a domestic Indian company can opt for the concessional corporate tax rate of 22% (effective 25.17%) under Section 115BAA. The lower 15% (effective 17.16%) rate for new manufacturing companies under Section 115BAB was only available to companies that commenced manufacturing by 31 March 2024, and that window has closed without extension -- new Taiwanese manufacturing subsidiaries now default to Section 115BAA at 22% (effective 25.17%). This remains significantly lower than the 35% rate (effective 38.22%) applicable to Branch Offices taxed as foreign companies.

To claim treaty benefits, obtain a tax residency certificate from Taiwan's tax authorities and file Form 10F in India. See the DTAA Master Guide for detailed guidance.

Document Requirements and Authentication

Taiwan is not a member of the Hague Apostille Convention. Taiwanese documents required for WOS registration in India must undergo attestation through the India-Taipei Association (ITA) in Taipei or the Taipei Economic and Cultural Center (TECC) in New Delhi, rather than the simpler apostille process available to Hague Convention members.

Documents from the Taiwanese Parent Company

• Certificate of Company Registration from Taiwan's Ministry of Economic Affairs (notarised and attested by ITA/TECC)
• Articles of Incorporation of the parent company (attested)
• Board resolution authorising the establishment of a WOS in India and nominating directors
• Audited financial statements of the parent company for the latest year (attested)
• Passport copies of all proposed directors (notarised and attested)
• Address proof of proposed directors (utility bill or bank statement, notarised and attested)
• Power of Attorney in favour of the authorised representative in India (attested)
• Parent company tax identification number

Documents Prepared in India

• Digital Signature Certificate (DSC) for all proposed directors
• Director Identification Number (DIN) application via SPICe+ for directors without existing DIN
• Proof of registered office address (rent agreement + landlord NOC + utility bill)
• Declaration by first directors and subscribers under INC-9

Step-by-Step Registration Process

Step 1: Obtain DSC and DIN

All proposed directors must obtain a Class-3 Digital Signature Certificate from a licensed Certifying Authority. Taiwanese directors can apply by submitting notarised and attested passport copies. Up to 3 directors can obtain DIN through the SPICe+ form. Timeline: 3-7 days.

Step 2: Name Reservation via SPICe+ Part A

Reserve the company name through SPICe+ Part A on the MCA portal. Two name options can be submitted per application. The name must not be identical or too similar to an existing company or trademark. The reserved name is valid for 20 days. Timeline: 1-3 days.

Step 3: File SPICe+ Part B for Incorporation

Complete SPICe+ Part B with company details, director information, share capital structure, registered office address, and the Memorandum and Articles of Association (eMoA and eAoA). The form integrates applications for PAN, TAN, GST registration, EPFO, ESIC, and bank account opening. Timeline: 5-10 days.

Step 4: Receive Certificate of Incorporation

Upon approval, the ROC issues the Certificate of Incorporation along with PAN and TAN. The company receives its Corporate Identity Number (CIN) and is legally incorporated. Timeline: 1-2 days after SPICe+ approval.

Step 5: Open Bank Account and Receive FDI

Open a current account with an AD Category-I bank. The Taiwanese parent company remits the investment amount to this account. Obtain the Foreign Inward Remittance Certificate (FIRC) and the KYC report from the AD bank, and register the company on the RBI FIRMS portal by filing the Entity Master. Since the Single Master Form was introduced in 2018, the earlier separate Advance Reporting Form (ARF) has been subsumed into Form FC-GPR, so the inflow is reported at the allotment stage (Step 6) rather than through a separate advance filing. Some AD banks may require additional documentation or internal clearances for Taiwan-origin FDI; working with a bank experienced in such transactions helps expedite the process.

Step 6: Allot Shares and File FC-GPR

Allot shares to the Taiwanese parent company within 60 days of receiving the investment. File Form FC-GPR through the FIRMS portal within 30 days of share allotment. Obtain a valuation certificate from a SEBI-registered merchant banker or a practising Chartered Accountant confirming shares were issued at fair market value. See our guide on FDI Advisory Services.

Step 7: File INC-20A (Commencement of Business)

File INC-20A within 180 days of incorporation, declaring that every subscriber has paid the value of shares and that the registered office is verified. The company cannot commence business until this declaration is filed.

Timeline and Costs

The end-to-end timeline for establishing a WOS in India from Taiwan is approximately 4-8 weeks:

Cost Breakdown

• Government fees (MCA): INR 1,000-7,500 (based on authorised capital)
• Stamp duty: INR 5,000-15,000 (varies by state)
• DSC fees: INR 1,500-3,000 per director
• Professional fees (CS/CA): INR 40,000-1,50,000
• Attestation charges (ITA/TECC): Varies by document type and volume
• Total estimated cost: INR 60,000-2,00,000 plus attestation costs

Post-Registration Compliance

A WOS incorporated in India must comply with the following ongoing obligations:

• Annual return (Form MGT-7): Filed within 60 days of the Annual General Meeting
• Financial statements (Form AOC-4): Filed within 30 days of the AGM
• Income tax return: Filed annually by 31 October for audited companies, extended to 30 November where a transfer pricing report in Form 3CEB is required
• GST returns: Monthly GSTR-1 and GSTR-3B filings if GST-registered
• Transfer pricing: Mandatory transfer pricing documentation and certification (Form 3CEB) for all international transactions with the Taiwanese parent or affiliates
• Board meetings: Minimum 4 per year, with at least 1 per quarter
• Statutory audit: Annual audit by a practising Chartered Accountant in India
• RBI annual return (FLA return): Filed annually by 15 July for companies with FDI

Beacon Filing provides comprehensive annual compliance, corporate tax filing, and FEMA/RBI compliance services for wholly owned subsidiaries.

Common Challenges for Taiwanese Companies

Document Authentication Without Apostille

Since Taiwan is not a member of the Hague Apostille Convention, documents must go through the ITA/TECC attestation process rather than the simpler apostille route. This adds time and requires coordination with specific offices. Companies should begin document preparation well in advance and engage a local agent in Taipei familiar with the ITA process to avoid delays.

Banking and Compliance Nuances

Some AD banks may require additional internal approvals or documentation for Taiwan-origin FDI. While this does not prevent investment, it can add processing time. Taiwanese companies should select a bank with prior experience handling investments from Taiwan. Major metropolitan AD banks and those with established international banking desks are generally better equipped.

Appointing an Indian Resident Director

Every WOS must have at least one director who has stayed in India for a minimum of 182 days during the preceding financial year. Major Taiwanese enterprises like Foxconn and Delta Electronics typically appoint senior Indian managers to fulfil this requirement. Smaller Taiwanese companies entering India may need to engage a professional director service or appoint a trusted Indian business associate initially. Beacon Filing can assist with director appointment services.

Transfer Pricing for Manufacturing Operations

Taiwanese companies with manufacturing WOS in India often have significant intercompany transactions for raw materials, components, technology licensing, and management services. Indian transfer pricing regulations require all such transactions to be at arm's length, with contemporaneous documentation. The Form 3CEB certification must be filed annually, and Form 15CA/15CB is required for taxable outward remittances -- Form 15CA for the remitter's declaration and a Chartered Accountant's certificate in Form 15CB where the taxable remittance exceeds INR 5 lakh in a financial year.

Navigating the Diplomatic Framework

India and Taiwan conduct their bilateral relationship through the Taipei Economic and Cultural Center (TECC) and the India-Taipei Association (ITA) rather than formal diplomatic channels. While this framework is well-established and does not impede business operations, Taiwanese companies should be aware that certain government-facing processes (such as obtaining employment visas for Taiwanese nationals or securing land approvals in restricted areas) may involve additional procedural steps.

PLI Scheme Eligibility

India's Production Linked Incentive (PLI) schemes across 14 sectors (including electronics, semiconductors, auto components, and textiles) offer significant financial incentives for manufacturing investments. Taiwanese companies establishing WOS for manufacturing should evaluate PLI scheme eligibility early, as these schemes have application windows and production thresholds. Several major Taiwanese electronics manufacturers have already benefited from PLI incentives in India.

Frequently Asked Questions

Can a single Taiwanese company be the sole shareholder of a WOS in India?

Yes. Under the Companies Act 2013, a Private Limited Company can have a single shareholder. The Taiwanese parent company can hold 100% of the shares, making it a Wholly Owned Subsidiary. However, a minimum of 2 directors is still required, with at least 1 being an Indian resident.

Does India apply Press Note 3 restrictions to Taiwanese investments?

No. India's FDI policy does not apply Press Note 3 (2020) restrictions to investments originating from Taiwan. Press Note 3 applies to countries sharing a land border with India (China, Pakistan, Bangladesh, Nepal, Bhutan, Myanmar, and Afghanistan). Taiwanese investors can use the automatic route for FDI in eligible sectors without prior government approval.

What is the India-Taiwan tax agreement?

India and Taiwan signed a comprehensive tax agreement on 12 July 2011 between the Taipei Economic and Cultural Center in New Delhi and the India-Taipei Association in Taipei. It provides reduced withholding tax rates: dividends at 12.5%, interest at 10%, and royalties and technical fees at 10%. The agreement is recognised under Indian income tax law for claiming treaty benefits.

What is the corporate tax rate for a WOS in India?

A WOS incorporated as a domestic Indian company can opt for a concessional tax rate of 22% (effective 25.17%) under Section 115BAA. The lower 15% (effective 17.16%) rate under Section 115BAB applied only to new manufacturing companies that commenced manufacturing by 31 March 2024; that window has closed and was not extended, so new manufacturing subsidiaries now default to the 22% (effective 25.17%) rate. This is still significantly lower than the 35% (effective 36.40%-38.22%) rate applicable to Branch Offices of foreign companies.

How does the document authentication process work for Taiwanese companies?

Since Taiwan is not a Hague Convention member, documents are authenticated through the India-Taipei Association (ITA) in Taipei or the Taipei Economic and Cultural Center (TECC) in New Delhi. Documents are first notarised by a Taiwan-licensed notary, then attested by the ITA or TECC. This process typically takes 1-3 weeks depending on document volume.

Can a Taiwanese WOS participate in India's PLI schemes?

Yes. Production Linked Incentive schemes are available to all companies incorporated in India, regardless of foreign ownership. A Taiwanese WOS incorporated as an Indian Private Limited Company is fully eligible to apply for PLI benefits in sectors like electronics, semiconductors, auto components, textiles, and other covered industries.

What are the ongoing compliance costs for a WOS?

Annual compliance costs typically range from INR 75,000 to INR 3,00,000, depending on turnover, transaction complexity, and transfer pricing requirements. This includes statutory audit, ROC filings, income tax return, GST compliance, transfer pricing documentation (Form 3CEB), and the FLA return.