WOS Annual Compliance Requirements for Foreign Companies

[Compliance Calendar]

WOS Compliance refers to the legal, regulatory, and statutory requirements that a Wholly Owned Subsidiary (WOS) must follow while operating in India. A Wholly Owned Subsidiary is a company whose entire shareholding is held by another company, generally a foreign parent company. It is commonly established by foreign businesses looking to expand their operations in the Indian market.

What is a Wholly Owned Subsidiary (WOS)?

A Wholly Owned Subsidiary is an Indian company in which 100% of the shareholding is owned by its parent company, subject to applicable Indian laws and sectoral restrictions. It is generally incorporated as a private limited company and must comply with the Companies Act, 2013, FEMA regulations, and other applicable laws.

Important WOS Compliance Requirements

Every Wholly Owned Subsidiary in India must fulfil various statutory and regulatory obligations, including:

1. Annual ROC Compliance: Filing of financial statements in Form AOC-4 and annual return in Form MGT-7 or MGT-7A, as applicable.

2. Income Tax Compliance: Filing annual income tax returns and complying with applicable tax provisions.

3. FEMA Compliance: Following foreign investment regulations and reporting requirements prescribed by the RBI.

4. FC-GPR Filing: Reporting the issue of equity instruments to foreign investors within the prescribed timeline.

5. FLA Return: Filing the Foreign Liabilities and Assets Return with the RBI, wherever applicable.

6. Board Meetings: Conducting board meetings and maintaining statutory records as required under the Companies Act, 2013.

7. Auditor Appointment: Appointing statutory auditors and conducting annual audits.

Why is WOS Compliance Important?

Timely WOS Compliance helps businesses maintain legal status, avoid penalties, ensure transparency, and build confidence among foreign investors. Non-compliance with the Companies Act or FEMA regulations may result in additional fees, penalties, and regulatory complications.

How Can Compliance Calendar LLP Help?

Compliance Calendar LLP provides professional assistance with WOS Compliance, including ROC filings, FEMA reporting, FC-GPR filing, FLA Return, annual compliance, and other regulatory requirements.

Our experts help businesses manage their statutory obligations efficiently and maintain proper regulatory records.

Conclusion: Proper WOS Compliance is essential for every foreign-owned subsidiary operating in India. Staying updated with statutory requirements ensures smooth business operations and reduces the risk of legal complications.