Global and Cross-border
Setting Up in India as a Foreign Company: Entity Options and First Steps
By ATTPL Consultancy Marketplace Editorial Team · · 2 min read
A plain guide for international businesses entering India: wholly owned subsidiary, branch, LLP or liaison office, plus first compliance steps from Jaipur.
Why India, and why plan carefully
India's size and digital adoption attract international companies, but entry rules depend on sector, ownership and the nature of activity. A wrong entity can limit what you may do or create tax inefficiency.
Common entry routes
- Wholly owned subsidiary (private limited company): full operations, separate liability.
- Branch office: for specific permitted activities of a foreign parent, subject to approval.
- Liaison office: representation and promotion only, no commercial income.
- LLP: allowed in permitted sectors with conditions.
- Joint venture or distributor model: share risk and local reach.
First steps
- Check whether your sector is under the automatic or approval route for foreign investment.
- Appoint a resident director and a registered office address.
- Plan FEMA reporting for the inflow of funds.
- Register for PAN, TAN and GST as needed.
- Decide bookkeeping, payroll and transfer pricing from day one.
Understanding the foreign investment framework
Foreign investment in India is governed by sector-specific rules. Some sectors allow investment automatically, others need government approval, and a few are restricted. Even in automatic sectors, you must report inflows to the Reserve Bank of India within prescribed timelines and follow pricing guidelines when issuing shares. Check the sector, the ownership cap, the entry route and the conditions before you commit to a structure.
Maintain a compliance file for foreign investment reporting. Missed filings can attract penalties and delay future transactions.
Tax and transfer pricing considerations
An Indian subsidiary is taxed as a separate company, and payments between it and the foreign parent, such as royalties, service fees or loans, must follow transfer pricing rules and have documentation. Treaty benefits, withholding tax on payments abroad and permanent establishment risk for branches or remote staff are important considerations. Early advice from a tax professional in both countries avoids costly surprises.
People, banking and operations
Plan for a resident director, local bookkeeping and payroll, a bank account with proper KYC, office space and relevant licences. Hiring local talent requires compliance with provident fund, state insurance and labour rules. Choose a service partner who can coordinate registration, accounting, legal and HR processes so that your team abroad has a single point of contact.
Local partner support
ATTPL Consultancy offers corporate advisory, registration and compliance support from Jaipur for international clients and for Indian companies expanding abroad. Share your plans and we will outline the options.
Frequently asked questions
Can I run an Indian business remotely?
Many founders do, but you need a resident director, local compliance and clear banking arrangements.
Which regulator oversees foreign investment reporting?
The Reserve Bank of India with the Ministry of Commerce and the DPIIT; confirm current forms with an adviser.
Sources and further reading
This article is general information for businesses and is not legal, tax or financial advice. Rules and dates change, so confirm them on the official websites listed above or with a qualified professional before acting.
