Set Up a Wholly Owned Subsidiary in India from Turkey

How to Register a Wholly Owned Subsidiary in India from Turkey

A Wholly Owned Subsidiary (WOS) is a Private Limited Company incorporated in India where 100% of the shares are held by the Turkish parent company. Unlike a Branch Office or Liaison Office, a WOS is a separate legal entity under Indian law with its own identity, liabilities, and ability to conduct any lawful business activity in India.

Bilateral trade between India and Turkey reached US$8.71 billion in FY 2024-25, with Turkish FDI into India standing at approximately US$210.47 million (April 2000 to March 2025). Major Turkish conglomerates such as Koç Holding, Arcelik A.S., Çelebi Holding, and Orhan Holding already operate in India. An MoU signed in February 2025 between World Trade Center Mumbai and DEIK (Turkey-India Business Council) aims to double bilateral trade to US$20 billion within five years, targeting textiles, pharmaceuticals, agriculture, automotive, and metals. For Turkish companies seeking full operational control in India, a WOS offers maximum flexibility in terms of business activities, repatriation of profits, and long-term strategic positioning. For a structural comparison, see Subsidiary vs Branch Office and Private Limited vs LLP.

FDI Route and Regulatory Requirements

Turkish companies can invest up to 100% in most sectors in India through the automatic route, which means no prior government approval is required. Since Turkey does not share a land border with India, the restrictions imposed by Press Note 3 (2020) do not apply. Turkish companies are not subject to the additional security clearances required for investors from China, Pakistan, Bangladesh, and other neighbouring countries.

Automatic Route Sectors

Under the automatic route, Turkish companies can hold 100% equity in sectors including IT and software, manufacturing, e-commerce (marketplace model), food processing, pharmaceuticals (greenfield), infrastructure, consultancy, trading, and most service sectors. For details, see Automatic Route vs Government Approval.

Government Approval Sectors

Certain sectors require prior approval from the Department for Promotion of Industry and Internal Trade (DPIIT) through the Foreign Investment Facilitation Portal (FIFP). These include multi-brand retail (51% cap), print media (26% cap), broadcasting (49% cap), mining and minerals (specific conditions), and defence above 74% and up to 100% (investment up to 74% in defence is permitted under the automatic route). The application is filed through the FIFP and processed within 8-10 weeks.

Key Structural Requirements

• Minimum directors: 2 directors (at least 1 must be an Indian resident who has stayed in India for 182+ days in the financial year)
• Minimum shareholders: 1 (the Turkish parent company can be the sole shareholder)
• Minimum capital: No statutory minimum paid-up capital and no prescribed minimum authorised capital; INR 1 lakh is simply the amount customarily stated in the MOA
• Registered office: Must have a registered office address in India within 30 days of incorporation

DTAA Benefits for Turkish Investors

India and Turkey have a Double Taxation Avoidance Agreement, signed on 31 January 1995 and in force since 1 February 1997, which provides significant tax relief for Turkish companies operating through a WOS in India. Unlike a Branch Office, a WOS is treated as a domestic Indian company for tax purposes and enjoys lower corporate tax rates.

Key Treaty Rates

• Dividends: Capped at 15% withholding tax in the source country (reduced from the domestic rate of 20%)
• Interest: Capped at 10-15% depending on the recipient (10% for banks and financial institutions)
• Royalties and fees for technical services: Capped at 15% (Article 12 — a single combined rate covering both)
• Capital gains: Governed by residency-based provisions with specific rules for immovable property and substantial shareholding

A WOS, being a domestic Indian company, benefits from the concessional corporate tax rate of 22% (effective rate approximately 25.17%) under Section 115BAA. New manufacturing companies could opt for 15% (effective ~17.16%) under Section 115BAB, but only if manufacturing commenced by 31 March 2024 — that window has closed and was not extended, so new manufacturers now also fall under the 22%/25.17% Section 115BAA rate. The Turkish parent can claim foreign tax credits in Turkey for withholding tax paid on dividends in India. To claim DTAA benefits, obtain a Tax Residency Certificate from the Turkish Revenue Administration and file Form 10F in India. See our DTAA Master Guide for detailed guidance.

Document Requirements and Authentication

Both India and Turkey are signatories to the Hague Convention (Apostille Convention). Turkey became a member on 29 September 1985, which means Turkish corporate documents require an apostille from the relevant Turkish authority (Governor's office, District Head Official, or Chief Secretary) rather than the lengthier embassy attestation process. For details, see Apostille vs Embassy Attestation.

Documents Required from the Turkish Parent Company

• Certificate of Incorporation or Trade Registry Gazette extract of the Turkish parent company (apostilled)
• Memorandum and Articles of Association / Esas Sozlesme (apostilled, with certified English translation)
• Board resolution of the Turkish parent company authorising investment in India and appointment of directors
• Passport copies of all proposed directors and shareholders (notarised and apostilled)
• Proof of address of all proposed directors (utility bill or bank statement, not older than 2 months, notarised and apostilled)
• Financial statements of the Turkish parent company for the latest financial year (for valuation purposes)
• Power of Attorney in favour of the Indian representative handling incorporation (apostilled)

Documents Prepared in India

• Digital Signature Certificate (DSC) for all proposed directors
• Director Identification Number (DIN) application for all directors through SPICe+ form
• Memorandum of Association (MOA) in Form INC-33
• Articles of Association (AOA) in Form INC-34
• Declaration by first subscribers and directors in Form INC-9
• Proof of registered office address (rent agreement + NOC from landlord + utility bill)

Step-by-Step Registration Process

The incorporation of a WOS from Turkey follows the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) process through the MCA portal.

Step 1: Obtain Digital Signature Certificates (DSC)

All proposed directors must obtain Class 3 DSCs from a licensed Certifying Authority in India. For Turkish directors, this can be arranged remotely through an Indian authorised agent. Timeline: 2-3 business days.

Step 2: Apply for Director Identification Numbers (DIN)

DINs for directors are applied for as part of the SPICe+ form itself. Up to 3 directors can receive DINs through a single SPICe+ filing. Ensure passport copies and address proofs are apostilled before filing.

Step 3: Reserve Company Name (SPICe+ Part A)

File SPICe+ Part A on the MCA portal to reserve the proposed company name. The ROC typically approves the name in 5-7 working days. Two name choices can be submitted. The reserved name is valid for 20 days from approval.

Step 4: File Incorporation Documents (SPICe+ Part B)

File SPICe+ Part B along with INC-33 (MOA), INC-34 (AOA), AGILE-PRO-S / INC-35 (for GST registration, EPFO, ESIC, profession tax, and bank account), and INC-9 (declarations). The integrated form simultaneously applies for CIN, PAN, TAN, EPF, ESIC registration, and GST registration. Government processing time: 7-10 working days.

Step 5: Receive Certificate of Incorporation

Upon approval, the ROC issues the Certificate of Incorporation containing the Company Identification Number (CIN), PAN, and TAN. The company is now legally incorporated as an Indian Private Limited Company.

Step 6: File FC-GPR with RBI

Within 30 days of allotment of shares to the Turkish parent company, file Form FC-GPR with the RBI through the AD bank. This is mandatory for reporting FDI inflows. A FEMA-compliant valuation certificate from a Chartered Accountant or SEBI-registered merchant banker is required. See our FEMA/RBI Compliance service.

Step 7: Open Bank Account and Remit Capital

Open a current account with an Authorised Dealer Category-I bank in India. The Turkish parent company remits the investment amount to this account via SWIFT transfer. The bank conducts KYC verification including beneficial ownership disclosure.

Timeline and Costs

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

Cost Breakdown

• Government fees (SPICe+): INR 2,000-15,000 (based on authorised capital)
• Stamp duty: INR 10,000-50,000 (varies by state; Maharashtra and Delhi are higher)
• PAN/TAN registration: Included in SPICe+
• Professional fees (CS/CA): INR 30,000-1,00,000 (includes incorporation, FC-GPR, and initial compliance setup)
• Apostille charges in Turkey: TRY 200-500 per document (approximately US$6-15 per document)
• Total estimated cost: INR 50,000-2,00,000 plus apostille and translation costs

Post-Registration Compliance

A WOS in India carries ongoing compliance obligations as a domestic company:

• 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; WOS is taxed as a domestic company at 22% (Section 115BAA) or, if it stays outside that regime, at the default rate of 30% (25% where turnover is up to INR 400 crore), plus surcharge and cess
• GST compliance: Monthly or quarterly GST returns if applicable
• Transfer pricing: Mandatory compliance with transfer pricing regulations for all related-party transactions with the Turkish parent company
• Annual compliance certificate: Secretarial audit for companies meeting specified thresholds
• RBI annual return: FLA (Foreign Liabilities and Assets) return by 15 July each year
• Board meetings: Minimum 4 board meetings per year with no gap exceeding 120 days

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

Common Challenges for Turkish Companies

Finding a Resident Director

Indian law mandates at least one director who has resided in India for at least 182 days in the financial year. Turkish companies that do not have an Indian employee or partner often appoint a professional resident director through a CS or CA firm. Ensure the resident director has no disqualifications under Section 164 of the Companies Act 2013. Beacon Filing can assist with identifying qualified resident directors through our company registration service.

FC-GPR Filing Deadline

The FC-GPR form must be filed within 30 days of share allotment. Missing this deadline triggers compounding penalties under FEMA. A valuation certificate from a CA or SEBI-registered merchant banker is mandatory. Many Turkish companies unfamiliar with Indian FEMA regulations miss this critical deadline. See FC-GPR Filing Guide and our FEMA compliance service.

Transfer Pricing Documentation

All transactions between the Indian WOS and the Turkish parent company (management fees, royalties, cost allocations, inter-company loans) must comply with Indian transfer pricing regulations. Maintain contemporaneous documentation and file Form 3CEB with the income tax return. The arm's-length pricing requirement applies regardless of transaction value.

Document Translation and Apostilling

Turkish corporate documents are typically in Turkish and require certified English translation before apostilling. The translation must be by a sworn translator (yeminli tercüman) recognised by the Turkish notary public. Allow 1-2 additional weeks for translation and apostilling. The apostille is issued by the Governor's office or District Head Official in Turkey.

Repatriation of Profits

Dividends from the WOS to the Turkish parent are freely repatriable after deducting applicable withholding tax on the dividend (currently 20% under domestic law, reduced to 15% under the India-Turkey DTAA). Ensure compliance with Form 15CA/15CB requirements for outward remittances. The AD bank processes dividend remittances upon submission of board resolution, TDS certificate, and CA certificate.

Frequently Asked Questions

Can a Turkish company set up a WOS in India without visiting India?

Yes. The entire SPICe+ incorporation process is online through the MCA portal. Turkish directors can obtain DSCs remotely, and all documents can be submitted digitally. A Power of Attorney in favour of an Indian representative (apostilled) enables the representative to handle physical requirements such as bank account opening and registered office verification.

What is the minimum capital required to set up a WOS from Turkey?

There is no statutory minimum paid-up capital requirement for a Private Limited Company in India, and no prescribed minimum authorised capital either; INR 1 lakh is simply the amount customarily stated in the MOA. The actual investment amount should reflect the business plan and operational needs. The capital contribution by the Turkish parent must be at fair market value as certified by a FEMA-compliant valuation.

How is a WOS taxed differently from a Branch Office?

A WOS is taxed as a domestic Indian company at 22% (effective rate 25.17%) under Section 115BAA. New manufacturing companies could access a 15% rate (effective 17.16%) under Section 115BAB, but only if manufacturing commenced by 31 March 2024 — that window has closed and was not extended, so new manufacturers now also default to the 22%/25.17% Section 115BAA rate. A Branch Office is taxed as a foreign company at 35% (effective rate approximately 38.22%). This significant tax advantage makes a WOS the preferred structure for most Turkish investors.

Can the Turkish parent company own 100% of the WOS?

Yes, in most sectors. Under the automatic route, 100% FDI is permitted in the majority of sectors. The Turkish parent can be the sole shareholder. Certain sectors like multi-brand retail (51%), print media (26%), and broadcasting (49%) have lower caps.

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

FC-GPR (Foreign Currency-Gross Provisional Return) is an RBI form used to report foreign direct investment received by an Indian company. It must be filed within 30 days of allotment of shares to the Turkish parent company through the AD bank. Late filing attracts compounding penalties under FEMA.

Can a WOS be converted into a public company later?

Yes. A Private Limited Company (WOS) can be converted to a public company by passing a special resolution, altering the MOA and AOA, and filing the necessary forms with the ROC. This is relevant for Turkish companies planning an eventual IPO on Indian stock exchanges.

Does the WOS need to file transfer pricing reports?

Yes. Form 3CEB must be filed with the income tax return for any international transaction with the Turkish parent company (or any associated enterprise) — there is no minimum value threshold. Detailed transfer pricing documentation under Rule 10D becomes mandatory once aggregate international transactions exceed INR 1 crore. This applies to management fees, royalties, inter-company loans, and all other related-party transactions.