How to Register an LLP in India from Malaysia
Malaysia is India's 3rd largest trading partner within ASEAN, with bilateral trade reaching USD 19.86 billion in FY 2024-25. While the Private Limited Company has traditionally been the go-to structure, the Limited Liability Partnership (LLP) is gaining traction among Malaysian investors seeking a flexible, partnership-based structure with limited liability protection and lower compliance overhead.
Since 2022, the Indian government has permitted 100% FDI in LLPs under the automatic route, making it far more accessible for Malaysian businesses to set up LLPs in India. Unlike a Private Limited Company, an LLP does not require a minimum number of board meetings, annual general meetings, or statutory audits (below certain thresholds), significantly reducing compliance costs and administrative burden.
An LLP is governed by the Limited Liability Partnership Act, 2008, and offers a hybrid structure combining the operational flexibility of a partnership with the limited liability of a company. Each partner's liability is limited to their agreed contribution, and the LLP itself is a separate legal entity that can own property, enter contracts, and sue or be sued in its own name. The India-Malaysia Comprehensive Economic Cooperation Agreement (MICECA), in force since 2011, provides a robust bilateral framework for Malaysian investments in India.
FDI Route and Regulatory Requirements
The Department for Promotion of Industry and Internal Trade (DPIIT) opened LLPs to 100% FDI under the automatic route through amendments to the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019. This means Malaysian investors no longer need prior approval from the RBI or any government ministry to invest in an Indian LLP.
Key Conditions for FDI in LLPs
FDI in LLPs is subject to the following conditions:
- The LLP must operate in a sector where 100% FDI is permitted under the automatic route with no performance-linked conditions
- At least one designated partner must be a resident of India (i.e., a person who has stayed in India for at least 120 days in the preceding financial year)
- Foreign Investment by way of capital contribution must be made at a price not less than the fair market value as determined by a Chartered Accountant using internationally accepted valuation methods
- The investment must be routed through normal banking channels in freely convertible foreign currency
- Foreign Portfolio Investors (FPIs) and Foreign Venture Capital Investors (FVCIs) are not permitted to invest in LLPs
Press Note 3 Exemption
Malaysia is not subject to Press Note 3 restrictions, which apply to countries sharing a land border with India (China, Pakistan, Bangladesh, Nepal, Myanmar, Bhutan, and Afghanistan). Malaysian investments in Indian LLPs can proceed under the automatic route without prior government approval, provided the sector permits it.
Downstream Investment
An LLP with FDI is permitted to make downstream investment in another company or LLP, but only in sectors where 100% FDI is allowed under the automatic route with no performance-linked conditions. This provides Malaysian investors with flexibility to build multi-tier business structures in India.
DTAA Benefits for Malaysian Investors
The India-Malaysia Double Taxation Avoidance Agreement, originally signed on 25 October 1976 and comprehensively revised on 9 May 2012 (effective 1 January 2013), provides Malaysian investors with some of the most favourable withholding tax rates in India's entire treaty network.
Key Treaty Rates
Dividends: Capped at just 5% — the lowest dividend withholding rate in India's DTAA network, compared to the 20% domestic rate and 10-15% under most other treaties. Interest: Limited to 10% of the gross amount, with interest earned by government institutions exempt. Royalties and Fees for Technical Services: Capped at 10% of the gross amount if the recipient is the beneficial owner.
For LLPs, profit distributions to Malaysian partners are treated as business income under the DTAA, and the applicable tax treatment depends on whether the Malaysian partner has a Permanent Establishment in India. A valid Tax Residency Certificate from the Inland Revenue Board of Malaysia (LHDN) and Form 10F are required to claim treaty benefits.
Document Requirements and Authentication
Malaysia joined the Hague Apostille Convention on 16 December 2024. Malaysian public documents are now apostilled by Malaysia's Ministry of Foreign Affairs (Wisma Putra) and accepted directly in India without further consular legalisation. The apostille typically takes 3-5 working days — in line with other apostille countries like Singapore.
Documents Required from Malaysia
- Passport copies of all proposed partners and designated partners — notarised and apostilled by Wisma Putra
- Address proof of Malaysian partners (utility bill or bank statement, not older than 2 months) — notarised and apostilled
- Board Resolution or Partner Resolution of the Malaysian parent entity (Sdn Bhd or LLP) authorising the Indian LLP investment — apostilled
- Certificate of Incorporation or SSM Company Profile of the Malaysian entity — apostilled
- Memorandum and Articles of Association (Constitution) or equivalent documents — apostilled
- Power of Attorney authorising a representative in India to file incorporation documents
Documents Required in India
- Digital Signature Certificate (DSC) — Class 3 DSC for all designated partners from a licensed Indian certifying authority (eMudhra, nCode)
- Designated Partner Identification Number (DPIN/DIN) — applied via Form DIR-3 on the MCA portal
- Proof of registered office — rental agreement or ownership deed plus NOC from the property owner
- Consent of partners — to act as designated partners
Step-by-Step Registration Process
LLP registration in India is conducted online through the MCA portal (V3) using the FiLLiP (Form for Incorporation of Limited Liability Partnership) integrated form.
Step 1: Obtain DSC for All Designated Partners (1-3 Working Days)
All designated partners must obtain a Class 3 Digital Signature Certificate from a government-certified Indian authority. Foreign partners submit attested passport copies and address proofs as part of the DSC application.
Step 2: Apply for DPIN/DIN (1-2 Working Days)
Each designated partner needs a Designated Partner Identification Number (DPIN), which is equivalent to a Director Identification Number (DIN). This can be applied for via Form DIR-3 or integrated within the FiLLiP form for up to two designated partners.
Step 3: Name Reservation — RUN-LLP (1-2 Working Days)
Reserve the LLP name by filing RUN-LLP (Reserve Unique Name for LLP) on the MCA portal. You can propose up to two names. The name must be unique and must include "LLP" or "Limited Liability Partnership" at the end. The RoC fee is INR 200.
Step 4: Incorporation Filing — FiLLiP (3-5 Working Days)
Once the name is approved, file the FiLLiP form with the Registrar of Companies. This form simultaneously captures partner details, registered office address, capital contribution information, and the consent of designated partners. Attach the subscriber sheet and proof of registered office.
Step 5: Certificate of Incorporation (Immediate upon Approval)
Upon verification, the RoC issues the Certificate of Incorporation electronically with the LLP's LLPIN (LLP Identification Number) and PAN. The LLP is now a legal entity.
Step 6: LLP Agreement — Form 3 (Within 30 Days of Incorporation)
File the LLP Agreement as Form 3 on the MCA portal within 30 days of incorporation. The LLP Agreement defines the mutual rights and duties of partners, profit-sharing ratios, capital contribution obligations, and management responsibilities. If Form 3 is not filed within 30 days, the LLP Agreement as per Schedule I of the LLP Act applies by default.
Step 7: RBI Reporting (Within 30 Days of Capital Receipt)
After the foreign capital contribution is received from Malaysia, report the investment to the RBI through the FIRMS portal. The AD Category-I bank issues an FIRC confirming receipt of foreign funds. Late reporting attracts penalties under FEMA.
Timeline and Costs
Realistic Timeline from Malaysia
- Document preparation and apostille (Malaysia): 3-5 working days at Wisma Putra
- DSC procurement: 1-3 working days
- DPIN/DIN processing: 1-2 working days
- Name reservation (RUN-LLP): 1-2 working days
- Incorporation filing (FiLLiP): 3-5 working days
- LLP Agreement filing (Form 3): within 30 days of incorporation
- Bank account opening: 3-4 weeks
- Total: 5-8 weeks end-to-end
Fee Breakdown
- Government fees (MCA — RUN-LLP + FiLLiP): INR 500-1,500
- DSC procurement: INR 1,500-2,500 per designated partner
- Apostille charges (Malaysia): MYR 60-100 per document at Wisma Putra
- Stamp duty on LLP Agreement: varies by state (INR 1,000-5,000 typical)
- Professional fees (CA/CS): INR 10,000-30,000
- Registered office rent: INR 5,000-25,000/month depending on city
There is no minimum capital contribution requirement for an LLP in India. Partners can contribute any amount as agreed in the LLP Agreement.
Post-Registration Compliance
Indian LLPs have lighter compliance requirements compared to Private Limited Companies, but foreign-invested LLPs must still maintain the following annual obligations:
- Form 11 (Annual Return): filed with the RoC by 30 May each year
- Form 8 (Statement of Account and Solvency): filed by 30 October each year, digitally signed by at least two designated partners
- Income Tax Return: filed by 31 July (or 30 September if tax audit is applicable)
- Tax Audit (Section 44AB): required if turnover exceeds INR 1 crore (INR 10 crore if cash transactions are below 5%)
- Statutory Audit: required only if annual turnover exceeds INR 40 lakh or capital contribution exceeds INR 25 lakh
- GST Returns: monthly GSTR-1 and GSTR-3B if applicable
- FLA Return: filed annually with the RBI by 15 July for all entities with foreign investment
- FEMA Reporting: capital contributions from Malaysia must be reported to the RBI through the AD bank
- Transfer Pricing Documentation: required if there are international transactions with the Malaysian parent or affiliates excel
Common Challenges for Malaysian Companies
Apostille Timeline
Following Malaysia's accession to the Hague Apostille Convention (effective 16 December 2024), Malaysian documents are now apostilled by Wisma Putra and accepted in India without further consular legalisation by the Indian High Commission. The apostille is typically issued in 3-5 working days — comparable to apostille countries like Singapore or Australia. Start document preparation in parallel with DSC and DPIN procurement to keep the overall timeline tight.
Resident Designated Partner Requirement
Every Indian LLP with FDI must have at least one designated partner who is a resident of India (120 days in the preceding financial year). Malaysian investors typically appoint a trusted Indian professional or existing employee in India to fulfil this requirement. The designated partner has significant legal obligations, including signing annual filings and being liable for penalties in case of non-compliance.
Sector Eligibility Verification
Unlike Private Limited Companies, which can receive FDI in sectors under both the automatic and government approval routes, LLPs can only receive FDI in sectors where 100% FDI is allowed under the automatic route with no performance-linked conditions. Malaysian investors must carefully verify that their intended business activity qualifies before choosing the LLP structure.
Currency Conversion Requirements
The Malaysian Ringgit (MYR) is a managed currency and not freely convertible on international markets. Foreign capital contributions to an Indian LLP must be made in freely convertible foreign currency (USD, EUR, GBP). Malaysian investors must convert MYR to an eligible currency before remitting, which introduces additional forex costs and potential exchange rate risk.
Banking Challenges
Opening a bank account for a foreign-invested LLP can take 3-4 weeks due to enhanced KYC requirements. Indian banks require extensive documentation from foreign partners, including attested passports and video-KYC verification. Some banks are less familiar with the FDI-in-LLP framework (since it is relatively new), which can cause additional delays.
Frequently Asked Questions
Can a Malaysian Sdn Bhd be a designated partner of an Indian LLP?
Yes. A Malaysian Sdn Bhd (body corporate) can be a designated partner of an Indian LLP. However, the Malaysian entity must nominate a natural person as its representative, and the LLP must still have at least one designated partner who is an Indian resident (120 days residency requirement).
Is there a minimum capital contribution for an LLP with foreign investment?
No. The LLP Act, 2008, does not prescribe any minimum capital contribution. Partners can contribute any amount as agreed in the LLP Agreement. However, the foreign capital contribution must be made at fair market value as certified by a Chartered Accountant.
What is the difference between an LLP and a Private Limited Company for Malaysian investors?
An LLP offers lower compliance requirements (no mandatory board meetings, AGMs, or statutory audit below thresholds), flexible profit-sharing ratios, and no minimum capital. However, a Private Limited Company is better suited for raising equity capital, venture funding, and operating in sectors where FDI requires the government approval route. See our detailed comparison.
Can an Indian LLP with Malaysian FDI make downstream investments?
Yes. An LLP with FDI can make downstream investments in another company or LLP, but only in sectors where 100% FDI is permitted under the automatic route with no performance-linked conditions. The downstream investment must also comply with FEMA pricing and reporting norms.
How long does it take to register an LLP in India from Malaysia?
The entire process typically takes 5-8 weeks from Malaysia, including document apostille (3-5 days at Wisma Putra), DSC and DPIN processing (2-3 days), name reservation (1-2 days), incorporation filing (3-5 days), and bank account opening (3-4 weeks running in parallel). Most of the timeline is driven by bank account opening rather than document authentication.
What are the annual compliance costs for an LLP in India?
Annual compliance costs typically range from INR 50,000 to INR 2 lakh (approximately MYR 2,800-11,200), covering Form 8 and Form 11 filings, income tax return, and RBI reporting (FLA return). LLPs with turnover below INR 40 lakh and contribution below INR 25 lakh are exempt from statutory audit, significantly reducing costs.
Is Malaysia subject to Press Note 3 for LLP investments in India?
No. Press Note 3 applies only to countries sharing a land border with India (China, Pakistan, Bangladesh, Nepal, Myanmar, Bhutan, and Afghanistan). Malaysian investments in Indian LLPs can proceed under the automatic route without prior government approval.