This study examines the process of transferring knowledge from a foreign subsidiary to its headquarters, in this case a single parent company and its one subsidiary. It also investigates subsidiary knowledge creation capabilities. This study proposes that, in order to facilitate subsidiary knowledge creation, the headquarters will allow the subsidiary to embed within the subsidiary’s internal and external networks and the headquarters also will allow the subsidiary’s autonomous behaviour. It also proposes that the headquarters will provide the required support to transmit the knowledge. A mixed methods case study research approach was employed to verify these propositions. The key finding of this study is that the support and resources for materializing knowledge can be provided by both sides – the headquarters and also the subsidiaries. This study helps managers to understand several concepts related to knowledge transfer, the significance and negative impact of the factors and also the barriers to transferring knowledge from subsidiaries.