Q&A

Wholly Owned Subsidiaries (WOS) are entities in India which are legally distinct from their foreign parent company, and they are popular among foreign investors with long term business interests in India. However, unlike Branch Offices, profits cannot be directly transferred to an offshore parent. Rather, profits can be remitted through the issuances of dividends to shareholders of the Indian WOS, or through share buy backs. It is important to note that in both of these scenarios tax must be paid on repatriated profits, whether through the Dividend Distribution Tax (DDT) or the buyback tax of 20 percent on profits distributed to shareholders.