A WOS gives the foreign parent full ownership of an Indian private limited company, with limited liability and the ability to hire, contract and invoice locally. In return, it must meet the Companies Act, 2013 and India’s foreign exchange rules from day one.

• Full ownership and control. The parent holds all of the shares and sets the strategy, budget and governance. Unlike a joint venture, there’s no local partner to align with, and unlike a liaison or branch office, the subsidiary can earn revenue and operate as a normal Indian company.
• Foreign investment is allowed automatically in most sectors. Most service sectors, including IT and engineering services, fall under the automatic route for foreign direct investment (FDI), so no prior government approval is needed. A few sectors have caps or need approval, so check your activity first. Taxmann’s guide notes the investee company carries the compliance burden.
• You need at least two shareholders. A private company must have a minimum of two members. In practice, the parent holds almost all shares and a nominee (often a parent-company officer or affiliate) holds one share on the parent’s behalf.
• You need at least two directors, and one must be resident in India. Under Section 149(3) of the Companies Act, at least one director must stay in India for 182 days or more during the financial year, with a proportionate test in the year of incorporation, as explained by SetIndiaBiz. The other directors can be foreign nationals.
• There’s no minimum capital, but money must come in properly. India has no minimum paid-up capital for a private company. Share capital must still arrive through banking channels, and the allotment must be reported to the Reserve Bank of India (RBI) on time.

Incorporation is only the start. A WOS has its own board, audit, tax and foreign exchange obligations, and many problems come from missed early deadlines or treating the subsidiary as a branch of the parent.

• First-year deadlines come quickly. The board should meet within 30 days of incorporation and appoint the first statutory auditor within the same window. The company must also file a declaration for commencement of business (Form INC-20A) within 180 days, after the subscription money has been received.
• Annual company law filings. Every year the company holds board meetings (at least four, with no more than 120 days between them), an annual general meeting, a statutory audit, and files its financial statements (AOC-4) and annual return (MGT-7). IncorpX notes late filing fees of ₹100 per day for these forms, with no upper cap.
• Foreign exchange and transfer pricing reporting. A foreign-owned company files the Foreign Liabilities and Assets (FLA) return with the RBI by July 15 each year, even in years with no new investment. Transactions with the parent, such as service fees or cost recharges, must be priced at arm’s length and, above a threshold, documented in a transfer pricing report (Form 3CEB).
• Directors carry real legal responsibility. Indian directors owe duties to the Indian company, not just to the parent. If a company fails to file its annual returns for three years in a row, its directors can be disqualified from other boards as well. Choose directors carefully and keep their KYC and DIN details current with the Ministry of Corporate Affairs.
• Common pitfalls to avoid. Common issues include a resident director who doesn’t actually meet the 182-day test, share allotments reported to the RBI late, intercompany agreements signed after work has already started, and parent-company staff acting for the subsidiary in ways that create permanent establishment risk for the parent in India. Agree on a compliance calendar and owners before the company is incorporated.

Some partners handle only the legal setup, some add employer-of-record and payroll, and some build and run the engineering team the subsidiary exists for. Here’s how five compare.

• OptiSol: A Chennai-based engineering and AI services company with registered US and UK entities and local client partners in both countries. Through Build-Operate-Transfer, Managed GCC and Hybrid models, clients can start delivery with embedded engineers working within their team while their own Indian subsidiary is being set up, then move the team into the WOS. [CONFIRM: whether OptiSol coordinates incorporation, resident director and compliance through legal and secretarial partners] Best fit if the subsidiary’s purpose is an engineering, data or AI capability center and you want delivery running from day one.
• Commenda: An entity management provider with offices including San Francisco, New York, London and Bengaluru. It offers India incorporation with a resident director lined up before the SPICe+ filing, local director services, a registered address and ongoing filings. Best fit if you want incorporation and resident director support from one platform.
• Inductus GCC: Offers BOT, COPO and FLEXI models covering talent, infrastructure and compliance for capability centers. Best fit if you want help with entity setup and hiring for a GCC.
• Wisemonk: Combines employer-of-record services with full GCC setup, bundling hiring, payroll, entity registration and real estate. Best fit if you want to hire through an employer of record first and incorporate later.
• Harjai Technologies: A Mumbai-based provider of end-to-end setup services covering entity setup, infrastructure and talent acquisition. Best fit if you want a single local provider for setup tasks in Mumbai.

This comparison is based on publicly available information about each company, as of October 2026.

OptiSol knows this journey from the other side. It started in Chennai and, over more than 15 years, set up registered entities in the US and the UK, with local client partners and account managers in both, so clients there could work with a company that is legally and physically present in their market. Going through those incorporations, bank accounts and local compliance taught the team what cross-border setup really involves: the paperwork is manageable, but the sequencing and the ongoing obligations are where companies lose time. That experience now shapes how OptiSol helps US and UK companies build their capability in India. Engineering work can start with embedded engineers working within the client’s team while the subsidiary is being formed, so the WOS is set up around a team that is already delivering rather than an empty office. For a parent deciding between incorporating first and building first, it’s worth asking which one actually needs to come first.