The Challenge
A straightforward-looking WOS structure carried complexity the client hadn't fully anticipated:
- Layered ownership: the Indian entity is a wholly owned subsidiary of a UK company, whose own shareholders sit in South Africa. Incorporation documentation, beneficial ownership disclosures, and downstream tax positions all had to reflect this correctly, not just the immediate UK parent.
- No local operating knowledge: the shareholders and UK board had no prior experience with Indian statutory timelines, so every filing category was new ground for them.
- Multi-state operational compliance: as the entity hired staff, it triggered labour licence and state-level compliance requirements that vary by jurisdiction within India itself, on top of central filings.
- Transfer pricing exposure: transactions with the UK parent needed to be documented and benchmarked correctly from the outset to avoid the kind of arm's length scrutiny that catches most first-year foreign subsidiaries off guard.
Our Approach
We scoped this as a full operating mandate covering everything the entity needed to function compliantly in India, communicating the reasoning behind each requirement so the UK board understood not just what was being filed, but why.
1. Incorporation as a wholly owned subsidiary
We structured and filed the incorporation to correctly reflect the UK parent as shareholder and the South African individuals as ultimate beneficial owners, ensuring the disclosure trail was accurate from the first filing.
2. Payroll and accounting
We set up and continue to run payroll end to end, along with the entity's day to day accounting and monthly book finalisation.
3. GST and TDS
We handled GST registration and ongoing return filing, along with TDS deduction, deposit, and return filing across all applicable payment categories.
4. PF, ESI, and labour licences
As headcount grew, we registered the entity for PF and ESI and secured the labour licences required at the state level, then built these into a recurring compliance cycle rather than one-time filings.
5. State level compliances
We tracked and filed shops and establishment registrations and other state-specific requirements applicable to where the entity operates, since these fall outside central filings and are easy for a foreign parent to miss entirely.
6. Income tax and transfer pricing preparation
We handled the entity's income tax filings and prepared transfer pricing documentation for its transactions with the UK parent, positioning the entity to withstand scrutiny rather than react to it after a notice.
7. Step by step guidance
At each stage, we walked the UK board through what was being done and why, so decisions on structure, remuneration, and intercompany transactions were made with an informed view of the Indian compliance consequence, not after the fact.