Set Up a Wholly Owned Subsidiary in India from Vietnam

How to Register a Wholly Owned Subsidiary in India from Vietnam

A Wholly Owned Subsidiary (WOS) gives a Vietnamese parent company 100% ownership and full operational control over its Indian entity. With India-Vietnam bilateral trade reaching a historic USD 16.46 billion in 2025 and VinFast's USD 500 million electric vehicle manufacturing investment underscoring the depth of Vietnamese commitment to India, the WOS structure is the preferred choice for Vietnamese companies planning substantial, long-term operations in India.

A WOS in India is technically structured as a Private Limited Company where the Vietnamese parent holds the entire shareholding. It is a separate legal entity from the parent, providing complete limited liability protection. The entity is incorporated through the SPICe+ platform on the MCA portal, and the FDI is reported to the RBI via Form FC-GPR.

For Vietnamese companies evaluating different structures, our comparisons of WOS vs. Joint Venture, WOS vs. LLP for Foreign Investors, and Branch Office vs. Subsidiary cover tax treatment, compliance obligations, and exit strategies in detail.

FDI Route and Regulatory Requirements

100% FDI in an Indian WOS is permitted under the automatic route in most sectors, meaning no prior approval from the RBI or DPIIT is required. Vietnam does not share a land border with India, so Press Note 3 restrictions do not apply to Vietnamese investments.

Sectors allowing 100% FDI under the automatic route include manufacturing, IT and ITES, e-commerce (marketplace model), consultancy, food processing, healthcare, renewable energy, pharmaceuticals (greenfield), single-brand retail, and most services sectors. India also permits 100% FDI in insurance companies under the automatic route, up from 74%, following the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025 (Act No. 40 of 2025, in force 5 February 2026) and its operationalisation for foreign investors via the FEM (Non-Debt Instruments) (Second Amendment) Rules, 2026 (notified 2 May 2026); at least one of the chairperson, managing director, or CEO must be a resident Indian citizen, and IRDAI registration and approval still apply.

Key regulatory requirements for a Vietnamese WOS:

• The Vietnamese parent company holds 100% of the equity shares of the Indian subsidiary
• At least 2 directors are required, with at least 1 being a resident of India (stayed 182+ days in the financial year)
• FDI is governed by FEMA and the Consolidated FDI Policy
• A board resolution from the Vietnamese parent authorizing the incorporation and appointing directors is mandatory
• The authorized capital of the WOS must be specified in the MoA and adequate for the planned investment
• Form FC-GPR must be filed with the RBI within 30 days of share allotment
• The WOS can make downstream investments in other Indian companies subject to FEMA conditions

DTAA Benefits for Vietnamese Investors

The India-Vietnam Double Taxation Avoidance Agreement, in force since 2 February 1995, prevents double taxation and provides reduced withholding tax rates on cross-border payments between the Indian WOS and its Vietnamese parent.

Key withholding tax rates under the India-Vietnam DTAA:

• Dividends: 10% of the gross amount (versus 20% domestic rate)
• Interest: 10% of the gross amount (versus 20% domestic rate)
• Royalties: 10% of the gross amount
• Fees for Technical Services (FTS): 10% under the treaty

The Indian WOS itself is taxed at a concessional corporate rate of 22% (effective ~25.17%) under Section 115BAA of the Income Tax Act. New manufacturing companies established after 1 October 2019 that commenced production before the 31 March 2024 deadline could opt for a 15% rate (effective ~17.16%) under Section 115BAB; that window has now closed and is not available to companies commencing production after 31 March 2024. This competitive tax rate, combined with the DTAA treaty benefits, makes India an attractive manufacturing and services hub for Vietnamese companies.

To claim treaty benefits, the Vietnamese parent must provide a valid Tax Residency Certificate (TRC) issued by the General Department of Taxation of Vietnam and Form 10F. Robust transfer pricing documentation is critical for intercompany transactions, including management fees, royalties, technology licenses, and goods transfers between the WOS and the Vietnamese parent.

Document Requirements and Authentication

Vietnam has not yet operationalized the Hague Apostille Convention. While Vietnam deposited its instrument of accession on 31 December 2025, the convention enters into force for Vietnam only on 11 September 2026. Until then, all Vietnamese documents must undergo embassy attestation (consular legalization). For a comparison, see Apostille vs. Embassy Attestation.

Documents required from the Vietnamese parent company:

• Board resolution of the Vietnamese parent authorizing the incorporation of the Indian WOS, specifying the authorized capital, appointing directors, and designating the authorized signatory (notarized and legalized)
• Certificate of incorporation of the Vietnamese parent (Giay chung nhan dang ky doanh nghiep, notarized and legalized through MOFA and Indian Embassy)
• Memorandum and Articles of Association of the parent company (notarized and legalized)
• Passport copies of all proposed directors (notarized and legalized)
• Address proof of Vietnamese-based directors (utility bill or bank statement, not older than 2 months)
• Audited financial statements of the parent company (demonstrating financial capacity for the proposed investment)
• PAN card of the Indian resident director
• Proof of registered office in India (rental agreement, NOC from owner, utility bill)
• Subscriber sheets for the MoA, signed by the authorized signatory of the Vietnamese parent

The embassy attestation process involves: (1) notarization by a Vietnamese notary, (2) authentication by the Vietnamese Ministry of Foreign Affairs (MOFA), and (3) attestation by the Indian Embassy in Hanoi. Timeline: 2-4 weeks. All Vietnamese-language documents must include certified English translations.

Step-by-Step Registration Process

The WOS is incorporated as a Private Limited Company through the SPICe+ platform. Here is the complete process:

1. Obtain DSCs: All proposed directors obtain Digital Signature Certificates from an Indian Certifying Authority. Vietnamese directors complete video-based KYC remotely. Timeline: 1-2 business days.
2. Reserve company name (SPICe+ Part A): Reserve the subsidiary name through SPICe+ Part A on the MCA portal (the standalone RUN service is used only for changing an existing company's name). The name typically includes the Vietnamese parent's brand name followed by "India Private Limited." Up to 2 names can be proposed. Timeline: 2-3 business days.
3. File SPICe+ (Parts A and B): Submit the comprehensive incorporation form including company details, director DINs, subscriber information, registered office address, and attach INC-33 (eMoA), INC-34 (eAoA), INC-9 (Declaration), and AGILE-PRO-S. The Vietnamese parent company signs as the sole subscriber through its authorized representative. Timeline: 5-10 business days.
4. Receive Certificate of Incorporation: The ROC issues the CoI with CIN, PAN, and TAN. The company is now legally incorporated.
5. Open a bank account: Open an Indian bank account using the CoI and begin receiving the FDI capital from Vietnam. Timeline: 3-5 business days.
6. Allot shares to Vietnamese parent: Upon receipt of the subscription money, allot shares to the Vietnamese parent company and file Form PAS-3 (Return of Allotment) with the ROC within 15 days.
7. File FC-GPR with RBI: Report the share allotment and FDI inflow by filing Form FC-GPR through the FIRMS/SMF portal within 30 days of allotment. Attach the FIRC (Foreign Inward Remittance Certificate) and KYC of the Vietnamese parent.
8. Commence business: File Form INC-20A (Commencement of Business) within 180 days of incorporation, declaring that shareholders have paid their subscription money.

Timeline and Costs

The end-to-end timeline for a Vietnamese company to set up a WOS in India is typically 4-6 weeks:

Estimated costs include:

• Government fees (MCA): INR 3,000-25,000 depending on authorized capital
• DSC: INR 1,500-2,500 per director
• Stamp duty on MoA and AoA: Varies by state (INR 1,000-15,000)
• Professional fees: INR 25,000-75,000 for a CA/CS firm handling the full process
• Embassy attestation fees: Approximately USD 20-50 per document
• CA certificate for FC-GPR: INR 5,000-15,000
• Valuation report: INR 10,000-25,000 (required for FC-GPR if shares are issued at a premium)

Post-Registration Compliance

A WOS in India carries the same compliance obligations as any Private Limited Company, plus additional FDI-related reporting:

• Board meetings: Minimum 4 per year, with a maximum gap of 120 days
• Annual General Meeting: Within 6 months of the financial year end
• Annual return (Form MGT-7): Filed within 60 days of the AGM (a WOS is a subsidiary and cannot qualify as a small company, so the abridged MGT-7A does not apply)
• Financial statements (Form AOC-4): Filed within 30 days of the AGM
• Statutory audit: Mandatory for all companies, regardless of turnover
• Income tax return: Due by October 31 (companies subject to a tax audit); 30 November where a transfer pricing audit under Section 92E applies
• Transfer pricing report (Form 3CEB): Required for any international transaction with the Vietnamese parent or other associated enterprise, regardless of value; the INR 1 crore threshold applies only to Rule 10D contemporaneous-documentation requirements
• GST returns: Monthly or quarterly as applicable
• FLA return: Annual Foreign Liabilities and Assets return to RBI by July 15
• FC-GPR: For any subsequent share allotments to foreign shareholders
• Significant Beneficial Ownership: Identify any individual who qualifies as a significant beneficial owner behind the Vietnamese parent (an SBO must be an individual) and file Form BEN-2 reporting that individual, or the holding reporting company where the exemption applies

Common Challenges for Vietnamese Companies

Vietnamese companies establishing a WOS in India encounter specific challenges:

• Embassy attestation timeline: The 2-4 week legalization process is the biggest bottleneck. Prepare and submit documents to the Vietnamese MOFA and Indian Embassy well in advance. After September 2026, the Hague Apostille Convention will significantly shorten this to a few days.
• Resident director requirement: Finding a qualified and trustworthy Indian resident director is critical. Vietnamese companies often use professional director services initially, then transition to a Vietnamese national who relocates to India and completes the 182-day residency requirement.
• Capital adequacy and valuation: The RBI requires fair valuation of shares issued to foreign investors. If shares are issued at a premium, a SEBI-registered merchant banker's or CA's valuation report using DCF or other accepted methods is mandatory for the FC-GPR filing.
• Transfer pricing compliance: Indian tax authorities are particularly vigilant about intercompany pricing. All transactions between the WOS and the Vietnamese parent — management fees, royalties, goods transfers, loans — must be at arm's-length prices with supporting documentation.
• Repatriation planning: Dividends from the Indian WOS to the Vietnamese parent are subject to 10% withholding under the DTAA. Factor this into the overall tax planning along with Vietnam's corporate income tax treatment of foreign dividends.
• Intellectual property structuring: If the Vietnamese parent licenses IP to the WOS, the royalty payments are subject to 10% withholding tax under the DTAA. Ensure the licensing agreements and rates comply with both FEMA pricing guidelines and transfer pricing regulations.
• Dual regulatory learning curve: Vietnam's Law on Investment 2020 (as amended) and India's FEMA/Companies Act framework are fundamentally different. Engage advisors proficient in both jurisdictions to ensure concurrent compliance with both countries' regulations.

Frequently Asked Questions

Can a Vietnamese company set up a WOS in India in any sector?

A Vietnamese company can set up a WOS in most sectors under the automatic route where 100% FDI is permitted. Restricted sectors include multi-brand retail (51% cap), defense beyond 74%, and certain media sectors. Press Note 3 restrictions do not apply to Vietnam as it does not share a land border with India.

What is the difference between a WOS and a Joint Venture in India?

In a WOS, the Vietnamese parent holds 100% of the equity, giving it full control over the Indian subsidiary. In a Joint Venture, the Vietnamese company partners with an Indian entity, sharing ownership and management. A WOS offers complete operational control but requires the parent to bring all the capital; a JV brings local knowledge, networks, and shared financial risk.

Is the WOS incorporation process different from a regular Pvt Ltd?

The incorporation process is identical — both use SPICe+ on the MCA portal. The key difference is that a WOS has the foreign parent as the sole or majority shareholder, which triggers additional FDI reporting requirements including FC-GPR filing with the RBI. The registration timeline may be slightly longer due to document legalization requirements.

Can the WOS raise additional capital from Indian investors later?

Yes. The WOS can issue additional shares to Indian investors through a rights issue or private placement. Once Indian shareholders hold more than 0% of equity, the company is no longer a "wholly owned" subsidiary but remains a foreign subsidiary. The share issuance must comply with the Companies Act and FEMA pricing guidelines.

What are the exit options for a Vietnamese parent from an Indian WOS?

Exit options include selling the shares to an Indian buyer or another foreign investor (subject to FEMA pricing guidelines and RBI reporting), voluntary winding up under the Companies Act or Insolvency and Bankruptcy Code, or striking off the company if it has been inactive. Each option has specific regulatory requirements and timelines ranging from 3 months to over a year.

Does the Indian WOS need to follow Vietnamese accounting standards?

No. The Indian WOS must follow Indian Accounting Standards (Ind AS) or Indian GAAP as applicable. However, the Vietnamese parent may require the Indian subsidiary to prepare additional reports or financial statements in Vietnamese accounting formats for consolidation purposes. This is handled by the statutory auditor.

How does VinFast's experience inform other Vietnamese companies setting up in India?

VinFast's USD 500 million manufacturing investment in Tamil Nadu demonstrates that India welcomes large-scale Vietnamese FDI. The investment follows the standard WOS structure with SPICe+ incorporation and FC-GPR reporting. Key takeaways include the importance of state-level incentive negotiations, choosing the right industrial zone, and engaging local advisors familiar with both Vietnamese and Indian regulatory frameworks.