50 Questions Foreigners Ask About Starting a Company in India

Why This FAQ Matters for Foreign Investors

India attracted USD 81.04 billion in FDI inflows in FY 2024-25 — a 14% increase year-on-year — and the government continues to liberalize sectoral caps and simplify registration processes. Yet the questions foreign founders and corporate teams ask remain remarkably consistent. This guide compiles the 50 most common questions we receive at Beacon Filing from clients across 76 countries, organized into ten practical categories. Every answer reflects 2025-2026 regulations, current form numbers, and real costs in INR.

Whether you are a first-time entrepreneur or a multinational CFO evaluating India entry, this resource is designed to save you weeks of research and prevent costly mistakes.

Entity Selection & Structure (Questions 1-8)

1. What types of companies can a foreigner register in India?

Foreign nationals can register a Private Limited Company, a Limited Liability Partnership (LLP), a Wholly Owned Subsidiary (WOS), a Branch Office, a Liaison Office, or a Project Office. The Private Limited Company is the most popular structure for foreign investors, accounting for over 80% of new FDI-backed entities, because it allows 100% foreign ownership in most sectors and provides limited liability protection.

2. What is the difference between a subsidiary and a branch office?

A subsidiary is a separate Indian legal entity — typically a Private Limited Company — with its own board, compliance obligations, and tax filings. A branch office is an extension of the foreign parent company with no separate legal personality. The key differences include: a subsidiary can engage in any lawful business activity; a branch office is restricted to specific activities approved by the RBI. See our detailed branch office vs subsidiary comparison for a side-by-side analysis.

3. Should I choose a Private Limited Company or an LLP?

For most foreign investors, a Private Limited Company is the better choice. LLPs have lower compliance costs (no mandatory audit below INR 40 lakh contribution or INR 25 lakh turnover), but they cannot accept FDI under the automatic route in many sectors. Private Limited Companies can accept FDI in virtually all open sectors under the automatic route. See our Private Limited vs LLP comparison for the full breakdown.

4. Can a foreigner own 100% of an Indian company?

Yes, in over 90% of sectors. Under the current FDI policy (2025-2026), 100% foreign ownership is permitted under the automatic route in sectors including IT services, manufacturing, e-commerce (marketplace model), consulting, healthcare, renewable energy, and most professional services. Restricted sectors include multi-brand retail (51% cap), defence (74% cap via automatic route), insurance (100% but with the condition that entire premium must be invested in India), and media/broadcasting (various caps from 26% to 100% depending on sub-sector). The FDI policy is published by DPIIT and updated periodically — always verify the latest consolidated policy before investing.

5. What is a Wholly Owned Subsidiary and when should I use one?

A Wholly Owned Subsidiary (WOS) is a Private Limited Company where 100% of shares are held by the foreign parent company. Use a WOS when you want full control over Indian operations, plan to repatriate profits, need to build a local team, and intend to operate long-term. Most Fortune 500 companies entering India establish a WOS rather than a branch office. A WOS is treated as a domestic company for tax purposes, which means it qualifies for the lower 22% corporate tax rate (effective 25.17%) rather than the 35% rate that applies to branch offices of foreign companies. The WOS can enter into contracts, hire employees, own property, and operate independently — making it the most flexible structure for serious India operations.

6. Can I convert a Liaison Office to a subsidiary later?

Yes, but the process involves closing the Liaison Office (which requires RBI approval and can take 6-12 months) and separately incorporating a new Private Limited Company. There is no direct conversion mechanism. Many companies that start with a Liaison Office to test the market transition to a subsidiary within 2-3 years. See our branch office vs liaison office comparison for more context.

7. What is the minimum number of directors and shareholders required?

A Private Limited Company requires a minimum of 2 directors and 2 shareholders. An LLP requires a minimum of 2 designated partners. A One Person Company (OPC) requires 1 director and 1 shareholder, but OPCs have restrictions on foreign ownership. For most foreign investors, the standard Private Limited Company with 2 directors (at least 1 Indian resident) is the practical choice.

8. Can I register a company remotely without visiting India?

Yes. The entire incorporation process can be completed remotely through the MCA (Ministry of Corporate Affairs) portal using the SPICe+ form. You will need a Digital Signature Certificate (DSC), which can be obtained online through certifying authorities that support foreign nationals. All documents must be notarized by the Indian Embassy or Consulate in your country, or apostilled if your country is a signatory to the Hague Apostille Convention. Over 120 countries are party to the Hague Convention, including the US, UK, Australia, Germany, France, Japan, and most EU nations. The apostillation process typically takes 3-7 business days depending on your country. Board meetings can also be held via video conference under the Companies Act, so ongoing operations do not require physical presence either.

Directors & Compliance Requirements (Questions 9-16)

9. Do I need an Indian resident director?

Yes. Every Private Limited Company must have at least one resident director — a person who has stayed in India for at least 182 days during the previous calendar year. This is a mandatory requirement under Section 149(3) of the Companies Act, 2013. The resident director does not need to be an Indian citizen; a foreign national residing in India on an Employment Visa or Business Visa can qualify, provided they meet the 182-day residency criterion. The residency is calculated on a calendar year basis (January 1 to December 31), not the financial year. This means that for a company incorporated mid-year, the resident director must have been in India for 182 days in the preceding calendar year.

10. What is a Digital Signature Certificate (DSC) and how do I get one?

A DSC is an electronic equivalent of a physical signature used to sign all filings on the MCA portal. Foreign directors can obtain a DSC from certifying authorities like eMudhra, Capricorn, or Sify. The process requires a valid passport, address proof (utility bill or bank statement), and a video verification call. Cost: approximately INR 1,500-3,000 per person. Processing time: 2-5 business days.

11. What is a Director Identification Number (DIN)?

A DIN is a unique 8-digit identification number assigned to every director of an Indian company. It is now obtained as part of the SPICe+ incorporation process (no separate application needed). Each person can hold only one DIN, even if they serve on multiple company boards.

12. What documents does a foreign director need to provide?

Foreign directors must provide: (a) a valid passport (notarized/apostilled copy), (b) address proof such as a utility bill, bank statement, or driving license (not older than 2 months, translated into English if in another language), (c) a passport-size photograph with white background, (d) a signed declaration and consent letter (Form DIR-2), (e) proof of nationality (if different from passport country), and (f) a PAN card application (mandatory for directors with income in India). For directors from countries that do not have an Indian Embassy, apostillation through a competent authority is required. Documents in languages other than English must be accompanied by a certified English translation. The entire document preparation typically takes 5-10 business days when handled efficiently.

13. Can a foreign national be the sole director?

No. While a foreign national can be one of the directors, at least one director must be an Indian resident (182-day rule). In practice, most foreign companies appoint their own representative as one director and hire or engage an Indian professional as the resident director.

14. What are the annual compliance requirements for directors?

Directors must attend a minimum of one board meeting per quarter (four per year), file Form DIR-3 KYC annually before September 30, disclose interests in Form MBP-1, and ensure the company files annual returns (MGT-7/MGT-7A) and financial statements (AOC-4) on time. Non-compliance attracts penalties starting at INR 50,000 per director. See our annual compliance guide for foreign-owned companies for the complete checklist.

15. Can I appoint a nominee director instead of finding an Indian resident?

Yes, several professional services firms (including Beacon Filing) offer nominee resident director services. The nominee acts as a compliant resident director while you retain operational control through board resolutions and shareholder agreements. This is a common solution for foreign companies that do not yet have an India-based employee.

16. What happens if the resident director leaves India?

If the resident director ceases to meet the 182-day residency requirement, the company must appoint a replacement within the same financial year. Operating without a resident director is a violation that can attract penalties of INR 1 lakh to INR 5 lakh per day of default. It is critical to have a succession plan in place.

Capital & Investment (Questions 17-22)

17. Is there a minimum capital requirement?

There is no statutory minimum capital requirement for a Private Limited Company. You can incorporate with as little as INR 10,000 (approximately USD 120) in authorized capital. However, practically, banks typically require a minimum deposit of INR 1 lakh to open a corporate current account, and the RBI expects the capital to be commensurate with the proposed business activities.

18. How do I bring money into India for investment?

Foreign investment must be routed through normal banking channels in freely convertible foreign currency. The money must be received in the Indian company's bank account, and the company must file Form FC-GPR with the RBI within 30 days of share allotment. The investment must comply with FEMA regulations and the applicable FDI sectoral caps.

19. What is the FC-GPR form and when must it be filed?

FC-GPR (Foreign Currency – Gross Provisional Return) is a reporting form filed with the RBI through the FIRMS portal after shares are allotted to a foreign investor. It must be filed within 30 days of allotment. Required attachments include: a FIRC (Foreign Inward Remittance Certificate) from the authorized dealer bank, a valuation certificate from a Chartered Accountant or SEBI-registered merchant banker (not older than 90 days from allotment date), KYC of the investor in the RBI-prescribed format, a board resolution approving the allotment, consent letters from the foreign investor, and a Press Note 3 declaration if applicable. Late filing attracts compounding penalties — as of April 2025, the RBI has capped these at INR 2,00,000 for specific contraventions, a significant relief from the earlier percentage-based penalties. Common rejection reasons include name mismatches between FIRC and KYC, stale valuation reports, and incorrect FIRC serial numbers. For a detailed breakdown of rejection reasons, see our guide on 6 common reasons the RBI rejects foreign investment applications.

20. Can I invest in Indian Rupees instead of foreign currency?

Generally, no. FDI must be received in freely convertible foreign currency. However, NRIs and OCIs can invest using funds held in NRE or FCNR accounts. An NRI can also invest from an NRO account, but this is treated as domestic investment, not FDI, and has different repatriation implications.

21. What is the difference between authorized capital and paid-up capital?

Authorized capital is the maximum amount of share capital the company is allowed to issue (stated in the Memorandum of Association). Paid-up capital is the amount actually invested by shareholders. For example, you might set authorized capital at INR 10 lakh but initially pay up only INR 1 lakh. Stamp duty is payable on authorized capital (rates vary by state: 0.15% in Delhi to 0.3% in Maharashtra). See our authorized capital vs paid-up capital comparison.

22. Can I take a loan from my parent company instead of equity investment?

Yes, through an External Commercial Borrowing (ECB) arrangement. ECBs are governed by RBI regulations with conditions on minimum maturity (3-5 years), maximum interest rates (benchmark + 450 bps spread), and end-use restrictions. ECBs up to USD 750 million per financial year are permitted under the automatic route. This can be an efficient structure for tax planning since interest payments are deductible, but transfer pricing rules apply.

Registration Process (Questions 23-28)

23. What is the step-by-step process to register a company?

The process follows these steps: (1) Obtain DSCs for all directors (2-5 days), (2) Apply for company name reservation via RUN (Reserve Unique Name) service (1-2 days), (3) File SPICe+ incorporation form with MCA along with e-MOA and e-AOA (3-7 days), (4) Receive Certificate of Incorporation with CIN, PAN, and TAN (same day as approval), (5) Open a bank account (3-7 days), (6) Register for GST if applicable (3-5 days), (7) File FC-GPR with RBI after receiving foreign investment (within 30 days of share allotment).

24. How long does the entire registration process take?

The core company incorporation through SPICe+ takes 10-15 business days from document preparation to receiving the Certificate of Incorporation. However, the complete setup — including bank account opening, GST registration, and professional tax registration — typically takes 4-6 weeks. For foreign companies, document apostillation adds 1-2 weeks. Budget 6-8 weeks total for a fully operational entity. Here is a realistic timeline breakdown: document preparation and apostillation (1-2 weeks), DSC procurement for foreign directors (3-5 days), name reservation via RUN service (1-2 days, resubmission may add 2-3 days), SPICe+ filing and MCA approval (3-7 days), bank account opening (3-7 days with document verification), GST registration (3-5 days), and shops and establishment registration (3-5 days depending on state). These steps can overlap — for example, GST registration can be initiated while the bank account is being opened.

25. How much does it cost to register a company in India?

Total registration costs typically range from INR 15,000 to INR 50,000 depending on authorized capital and state of registration. Here is a detailed cost breakdown:

Government fees are relatively low; professional services fees and document apostillation costs constitute the bulk of the expenditure for foreign companies. Additionally, if the authorized capital exceeds INR 15 lakh, MCA filing fees increase on a slab basis. Budget an additional INR 10,000-15,000 for GST registration, professional tax registration, and Shops & Establishments registration after incorporation.

26. Which state should I register my company in?

The most popular states for foreign companies are Maharashtra (Mumbai), Karnataka (Bangalore), Delhi NCR, Tamil Nadu (Chennai), and Telangana (Hyderabad). Key factors include: stamp duty rates (lowest in Delhi), availability of talent, proximity to customers, and state-level incentive schemes. See our Delhi vs Mumbai vs Bangalore vs Hyderabad comparison for a detailed analysis. Note: your registered office can be in one state while operations run from another.

27. What is the SPICe+ form?

SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) is an integrated web form on the MCA portal that combines: (a) company name reservation, (b) incorporation application, (c) DIN allotment for directors, (d) PAN and TAN application, (e) EPFO and ESIC registration, (f) GST registration, and (g) bank account opening request — all in a single filing. It replaced the earlier separate forms and has significantly simplified the incorporation process.

28. Do I need a physical office address to register?

Yes, you need a registered office address in India. This can be a rented office, a co-working space, or a virtual office (many states accept virtual office addresses for registration). You must provide a utility bill (electricity, water, or gas) for the address and a No Objection Certificate (NOC) from the landlord. The registered office must be established within 30 days of incorporation.

FDI Rules & Routes (Questions 29-34)

29. What is the automatic route vs. government approval route?

Under the automatic route, foreign investors can invest without prior government permission — just invest and report via FC-GPR. Under the government approval route, you must obtain prior approval from the concerned ministry via the National Single Window System (NSWS) before investing. Over 90% of sectors are under the automatic route. See our automatic route vs government approval comparison.

30. Which sectors are prohibited for FDI?

FDI is completely prohibited in: (a) lottery business (including government, private, and online lotteries), (b) gambling and betting (including casinos and online gambling platforms), (c) chit funds, (d) Nidhi companies (mutual benefit societies), (e) trading in Transferable Development Rights, (f) real estate business (note: this does not include construction of townships, housing, commercial premises, or infrastructure — those are open for 100% FDI), (g) manufacturing of cigars, cheroots, cigarillos, and cigarettes of tobacco or tobacco substitutes, and (h) activities not open to private sector investment, including atomic energy generation, railway operations, and mining of atomic minerals. It is important to note that several sectors which were previously prohibited — such as single-brand retail, defence, and certain mining activities — have been progressively opened to FDI over the past decade.

31. What is Press Note 3 and does it affect my investment?

Press Note 3 (2020) requires that any investment from countries sharing a land border with India — China, Bangladesh, Pakistan, Nepal, Bhutan, Myanmar, Afghanistan — must obtain prior government approval. As of March 2026, the Indian Cabinet has relaxed these rules: investments up to 10% from neighboring countries are now permitted via the automatic route in select manufacturing sectors. However, strategic sectors remain restricted. If your company has significant Chinese beneficial ownership, you will likely need government approval.

32. What are the current FDI sectoral caps for key sectors?

Key caps as of 2025-2026: Insurance — 100% (automatic route, provided entire premium is invested in India, raised from 74% in Budget 2025); Defence — 74% (automatic route), above 74% (government approval for modern technology); Telecom — 100% (automatic route); Single-brand retail — 100% (automatic route, with 30% local sourcing above 51%); Multi-brand retail — 51% (government approval, minimum USD 100 million investment); E-commerce marketplace — 100% (automatic route, inventory-based models are prohibited); Construction development — 100% (automatic route, with minimum area and investment conditions); Pharmaceuticals — 100% (automatic route for greenfield), 74% for brownfield acquisitions under automatic route and 100% under government approval; Space sector — up to 100% with tiered automatic/government approval depending on sub-activity (100% automatic for component manufacturing, 74% automatic for satellite operations, 49% automatic for launch vehicles); Mining of metals and non-metals — 100% (automatic route); Civil aviation — 100% (automatic route for scheduled carriers, up to 49% by foreign airlines); Banking — 74% (private sector banks under automatic route); Media — 26% FDI in print media, 49% in FM radio, and 100% in digital media under government approval route.

33. What is the FLA Return and when must it be filed?

The FLA Return (Foreign Liabilities and Assets Return) must be filed annually by July 15 by every Indian company that has received FDI or made overseas investment. It is filed online through the RBI's FIRMS portal. Non-filing can result in the RBI flagging the company and creating issues for future investment transactions.

34. Can I invest through an intermediary holding company?

Yes. Many foreign investors use an intermediary holding company in Singapore, Mauritius, the Netherlands, or the UAE to invest in India. This can offer treaty benefits under the applicable DTAA (Double Taxation Avoidance Agreement). However, the beneficial ownership must be substantiated — shell companies without substance may be challenged under India's General Anti-Avoidance Rules (GAAR). See our direct FDI vs holding company route comparison.

Taxation (Questions 35-40)

35. What is the corporate tax rate for foreign-owned Indian companies?

A foreign-owned Indian subsidiary (Private Limited Company) is treated as a domestic company for tax purposes. The standard rate is 22% (effective 25.17% with surcharge and cess) under Section 115BAA. New manufacturing companies incorporated before March 31, 2024 can avail a 15% rate (effective 17.16%). Note: these concessional rates are available only to domestic companies — a branch office of a foreign company pays 35% (reduced from 40% effective April 2025) plus applicable surcharge and cess. This significant tax rate differential (25.17% vs approximately 36.4% effective rate for branch offices) is one of the strongest arguments for setting up a subsidiary rather than a branch office. Additionally, MAT (Minimum Alternate Tax) at 15% applies to companies opting for the standard tax regime, though companies under Section 115BAA are exempt from MAT. Surcharge rates for domestic companies are 7% (income INR 1-10 crore) and 12% (income above INR 10 crore). See our complete tax guide for foreign companies.

36. Do I need to register for GST?

Yes, GST registration is mandatory if your annual turnover exceeds INR 20 lakh (INR 10 lakh for special category states) or if you are engaged in inter-state supply of goods/services (regardless of turnover). Foreign companies providing online services (OIDAR) to Indian consumers must also register. Registration takes 3-5 business days through the GST portal. Monthly or quarterly filings (GSTR-1, GSTR-3B) are required depending on turnover.

37. What is withholding tax and how does it affect cross-border payments?

Withholding tax (TDS) applies to most payments made to non-residents. Key rates: royalties — 10% (under most DTAAs); technical service fees — 10% (under most DTAAs); dividends — 20% (10-15% under many DTAAs); interest — 20% (10-15% under DTAAs). Before making any cross-border payment, the Indian company must obtain a CA certificate and file Form 15CA/15CB with the Income Tax department and the authorized dealer bank.

38. How does transfer pricing work?

Transfer pricing rules apply to all transactions between the Indian subsidiary and its foreign parent or associated enterprises. Transactions must be at arm's length — meaning prices comparable to those between unrelated parties. The Indian transfer pricing framework follows OECD guidelines and recognizes five methods: Comparable Uncontrolled Price (CUP), Resale Price Method, Cost Plus Method, Profit Split Method, and Transactional Net Margin Method (TNMM). Documentation requirements include a transfer pricing study, master file (for groups with consolidated revenue exceeding INR 500 crore), local file, and Country-by-Country Report (for groups with consolidated revenue exceeding INR 5,500 crore). Penalties for non-compliance: 2% of the transaction value for inadequate documentation, plus potential adjustment of income by the Transfer Pricing Officer (TPO). The company must file Form 3CEB with the tax return, certified by a Chartered Accountant, by the due date of October 31. Advance Pricing Agreements (APAs) are available to provide certainty on pricing for 5-year periods — India has signed over 500 APAs since the program's inception.

39. Can I repatriate profits from India?

Yes. Dividends can be freely repatriated after paying applicable withholding tax. There is no Dividend Distribution Tax since its abolition in 2020; dividends are now taxed in the hands of shareholders. The withholding rate on dividends paid to non-residents is 20% (or the lower DTAA rate — for example, 10% for US investors under the India-US DTAA, 10% for Singapore investors under the India-Singapore DTAA, and 10% for most European treaty partners). Repatriation requires filing Form 15CA/15CB through the Income Tax e-filing portal and providing the certificate to the authorized dealer bank before remittance. The bank will process the outward remittance within 1-3 business days after receiving the documentation. There is no restriction on the frequency or quantum of dividend repatriation, provided the company has distributable profits and all tax obligations are met. See our profit repatriation guide for the complete process.

40. Are there any tax incentives for foreign investors?

Key incentives include: (a) Production Linked Incentive (PLI) schemes across 14 sectors with realized investments exceeding INR 1.76 lakh crore — incentives range from 4% to 6% of incremental sales over a 5-year period, (b) Special Economic Zone (SEZ) benefits including income tax exemptions (100% for first 5 years, 50% for next 5 years), customs duty exemptions, and single-window clearances, (c) concessional 15% tax rate for new manufacturing companies (effective 17.16% with surcharge and cess), (d) state-level incentives including stamp duty exemptions, industrial land at subsidized rates, electricity duty waivers, capital investment subsidies, and employment generation incentives — states like Tamil Nadu, Karnataka, Telangana, and Gujarat offer particularly competitive packages, (e) startup tax holiday under Section 80-IAC for DPIIT-recognized startups (100% tax deduction for 3 consecutive years out of the first 10 years, for companies with turnover below INR 100 crore). India now has over 197,000 DPIIT-recognized startups, with the 2026 DPIIT notification extending the eligibility period to 20 years for deep-tech startups and raising the turnover cap to INR 300 crore. Additionally, units in International Financial Services Centre (IFSC) at GIFT City, Gujarat enjoy a 100% tax holiday for 10 years and zero GST on financial services.

Banking & FEMA (Questions 41-44)

41. How do I open a corporate bank account?

After incorporation, approach an authorized dealer bank (most major Indian and international banks qualify) with: Certificate of Incorporation, PAN card, board resolution authorizing account opening, KYC documents of all directors/signatories, and proof of registered office. Processing takes 3-7 business days. Major banks used by foreign companies include HDFC Bank, ICICI Bank, Axis Bank, and branches of international banks like HSBC, Standard Chartered, and Citibank.

42. What is FEMA and how does it affect my company?

The Foreign Exchange Management Act (FEMA), 1999 governs all cross-border transactions involving Indian entities. It replaced the earlier Foreign Exchange Regulation Act (FERA) and shifted the approach from control to management of foreign exchange. FEMA affects your company in four key ways: (a) all foreign investments must be reported to the RBI within prescribed timelines (FC-GPR within 30 days of share allotment, FC-TRS within 60 days of share transfer, FLA Return by July 15 annually), (b) all cross-border payments require proper documentation (Form 15CA/15CB, CA certificates, purpose codes), (c) pricing of shares issued to or transferred by foreign investors must comply with RBI valuation guidelines — shares to non-residents cannot be issued below fair value, and shares purchased from non-residents cannot be above fair value, (d) the Indian company must obtain a Unique Identification Number (UIN) from the AD bank for every foreign investment transaction. Non-compliance attracts penalties up to three times the amount involved, and serious violations can trigger investigation by the Enforcement Directorate. See our FEMA compliance guide.

43. What are the penalties for FEMA violations?

FEMA penalties can be severe: up to three times the amount involved in the contravention, or INR 2 lakh where the amount is not quantifiable. As of April 2025, the RBI has capped compounding penalties at INR 2,00,000 for specific types of contraventions — a significant relief from the earlier approach where penalties were 0.30% to 0.75% of the amount involved. However, serious violations (money laundering, terror financing) are not compoundable and can result in criminal prosecution under the Prevention of Money Laundering Act.

44. Can I hold foreign currency in my Indian company's bank account?

Indian companies can open an EEFC (Exchange Earners' Foreign Currency) account to hold up to 100% of their foreign exchange earnings. However, this is available only if the company earns foreign exchange (through exports, services to foreign clients, etc.). For pure domestic operations, foreign currency received as FDI must be converted to INR. See our current account vs EEFC vs SNRR comparison.

Hiring & Employment (Questions 45-47)

45. Can I hire employees before the company is registered?

No. You cannot legally employ people in India without a registered entity. However, you can engage independent contractors while the company is being set up. Alternatively, an Employer of Record (EOR) can hire employees on your behalf until the entity is operational. This is a common interim solution used by foreign companies during the 6-8 week setup period.

46. Do I need to register for employee benefits programs?

Yes. Indian labor law mandates several registrations: (a) Employees' Provident Fund (EPF) — mandatory if you have 20+ employees (employer contributes 12% of basic salary, employee contributes 12% — total 24% of basic salary), (b) Employees' State Insurance (ESI) — mandatory for employees earning up to INR 21,000/month (employer contributes 3.25%, employee contributes 0.75%), (c) Professional Tax — varies by state (maximum INR 2,500 per year per employee, deducted monthly), (d) Shops & Establishments registration — required in most states within 30 days of commencing business, (e) Gratuity — payable to employees who complete 5 years of service (15 days salary per year of service), (f) Labour Welfare Fund — applicable in certain states with nominal contributions. EPFO and ESIC registrations are now obtained automatically through the SPICe+ incorporation form. Additionally, the new Labour Codes (expected to be fully implemented in 2026) will consolidate 29 labour laws into 4 codes, potentially simplifying compliance. Companies with expatriate employees must also obtain relevant registrations under the Foreigners Regional Registration Office (FRRO).

47. What visa does a foreign director or employee need?

Foreign directors typically require a Business Visa (valid for up to 5 years, multiple entry), which permits attending board meetings, signing documents, and overseeing operations but does not allow taking up employment in India. Foreign employees require an Employment Visa, which requires a minimum annual salary of USD 25,000 (exemptions exist for ethnic cooks, language teachers, and staff of certain nationality-specific organizations). The Employment Visa is linked to a specific employer and position, and the employee must register with the FRRO within 14 days of arrival. Processing time varies by country: 5-15 business days in most cases. For senior executives and intra-company transferees, the Employment Visa can be issued for up to 5 years. The e-Business Visa is also available for short visits (up to 180 days) for business-related activities such as attending meetings and trade fairs.

Intellectual Property (Questions 48-49)

48. How do I protect my intellectual property in India?

India has a comprehensive IP framework: (a) Trademark registration — protects brand names, logos, and slogans (INR 4,500 per application per class for companies, INR 9,000 for expedited examination), valid for 10 years and renewable indefinitely, (b) Patent registration — protects inventions and processes (INR 8,000-16,000 filing fee for natural persons, higher for entities), valid for 20 years from date of filing, (c) Copyright registration — protects creative works, software, and databases (INR 500-5,000), valid for 60 years after author's death, (d) Design registration — protects visual appearance of products (INR 1,000-4,000), valid for 10 years extendable to 15 years, (e) Trade secret protection — available under contract law and the Information Technology Act, though India does not have a standalone trade secrets statute. India is a signatory to TRIPS, Paris Convention, Berne Convention, and the Madrid Protocol for international trademark registration. Enforcement mechanisms include specialized IP tribunals, the National Company Law Tribunal, and customs recordation to prevent infringing goods at the border. See our IP protection guide for foreign companies.

49. Can I license technology from my parent company to the Indian subsidiary?

Yes. Technology licensing agreements are common and can be an effective way to compensate the parent company. Royalty payments are subject to withholding tax (typically 10% under most DTAAs). The agreement must be at arm's length for transfer pricing purposes. Under the automatic route, royalty payments of up to 5% of domestic sales and 8% of export sales are permitted without RBI approval. Amounts exceeding these limits may require prior approval.

Ongoing Operations (Question 50)

50. What ongoing compliance must I maintain after registration?

Annual compliance obligations include: (a) Board meetings — minimum 4 per year (one each quarter), (b) Annual General Meeting (AGM) — within 6 months of financial year end (September 30), (c) Financial statements (Form AOC-4) — filed within 30 days of AGM, (d) Annual return (Form MGT-7) — filed within 60 days of AGM, (e) Income tax return — by October 31, (f) GST returns — monthly/quarterly, (g) FLA Return — by July 15, (h) Transfer pricing report (Form 3CEB) — by October 31. Total annual compliance cost for a small foreign subsidiary: INR 2-5 lakh for professional fees (Company Secretary, Chartered Accountant, tax advisor). See our annual compliance checklist for the complete calendar.

Key Takeaways

• Entity choice matters: A Private Limited Company (Wholly Owned Subsidiary) is the best structure for most foreign investors, offering 100% ownership, limited liability, and full operational flexibility.
• One Indian resident director is mandatory: Plan for this requirement early — nominee director services are available if you do not have an India-based team member.
• No minimum capital: Start lean. There is no statutory minimum, though INR 1 lakh is the practical floor for bank account opening.
• Remote registration is possible: The entire process can be completed without visiting India, using apostilled documents and the online MCA portal.
• Compliance is continuous: Budget INR 2-5 lakh annually for statutory compliance (CA, CS, tax filings) — this is not optional and penalties for non-compliance are steep.
• FEMA compliance is critical: Every foreign investment transaction must be reported to the RBI within prescribed timelines. Late filing attracts compounding penalties.