Set up a company in India from abroad

Which structure fits your plan

The structure follows what you want to do in India. If you plan to hire, invoice Indian clients or manufacture, a private limited company is the usual answer. If you only want to test the market, a liaison office can represent you without earning revenue. The comparison of entry structures covers all six options side by side, and liaison office vs branch office vs subsidiary goes into the three most common ones. If you want an engineering team, see software development in India; to start with an existing business, see acquiring a company in India. If you only want to produce in India, contract manufacturing in India needs no entity at all.

Can you own 100% of your Indian company?

In most sectors, yes. India lets foreign companies invest through the automatic route, with no prior approval, in a large majority of activities. Some sectors are capped or need government approval, for example defence, insurance, broadcasting, multi-brand retail and some financial services. A handful are closed to foreign investment.

The rules are set by the government's foreign direct investment policy and change from time to time. Your exact activity needs to be checked before you choose a structure. The guide to foreign direct investment in India lists the routes and sector rules.

What you need before you start

• Two directors, one of them resident in India under company law. The others can live abroad.
• Two shareholders. For a wholly owned subsidiary, a nominee usually holds one share for the parent.
• A registered office in India, with proof of address and the owner's consent.
• Parent company documents: certificate of incorporation, articles, board resolution, signed and legalised (apostilled where applicable).
• Identity and address proof for each foreign director and signatory, also legalised.
• A company name that is available and fits the naming rules.

How to register a company in India, step by step

Indicative order for a private limited company. Your partner confirms the timeline for your case.

1. Week 1

   Structure and documents

   Entity choice, sector check, directors, documents signed and legalised abroad.

2. Weeks 1 to 2

   Digital IDs

   Digital signatures and director identification numbers, done remotely.

3. Weeks 2 to 4

   Incorporation

   Name approval and incorporation filing. Tax numbers are issued with the certificate.

4. Weeks 3 to 8

   Bank account

   Account opening, often the slowest step, with documents and verification visits.

5. Weeks 4 to 10

   Registrations

   GST and other registrations, foreign investment reporting, office and first hires.

After incorporation: the filings that catch people out

Incorporation is the visible part. The obligations that follow are where foreign companies get delayed or fined, because penalties for missed filings add up over time.

• Reporting the foreign investment to the central bank, through your bank, within a short deadline after shares are issued.
• Tax registrations: GST once your activity requires it, and withholding tax registration if you pay salaries or suppliers.
• Annual filings: audited accounts and annual return with the registrar, director KYC, and an annual return on foreign liabilities and assets.
• Statutory audit every year, whatever your size.
• Transfer pricing documentation if your Indian company trades with the parent.

What drives the cost

Government fees for incorporation are usually a small part of the budget. What moves the total is everything around them:

• Professional fees for structuring, filings and legalisation of documents abroad.
• The registered office, from a coworking address to leased space.
• A professional resident director if you have no one in India.
• Ongoing accounting, payroll, audit and compliance, every year.
• Sector licences or approvals where they apply.

Your partner in India gives you a cost range for setup and the first year before you commit.

Five mistakes foreign founders make

1. Choosing the structure before checking the sector. A branch or LLP that cannot do what you need means starting again.
2. Treating the bank account as a formality. It is often the slowest step, with several rounds of documents and visits.
3. Forgetting the post-incorporation reporting. Late foreign investment reporting and missed annual filings lead to penalties.
4. Using a registered address without the right paperwork. A missing consent letter or utility bill can stall the filing.
5. Appointing a resident director without a written agreement. Their role, powers and exit should be clear from day one.