Register a Limited Liability Partnership in India from New Zealand

How to Register an LLP in India from New Zealand

A Limited Liability Partnership (LLP) is an increasingly popular business structure for foreign investors entering India, combining the operational flexibility of a traditional partnership with the limited liability protection of a company. Since India opened LLPs to 100% foreign direct investment under the automatic route in November 2015 (DIPP Press Note 12 of 2015, now carried into the FEMA Non-Debt Instruments Rules), New Zealand entrepreneurs and professional services firms have gained a cost-effective alternative to incorporating a Private Limited Company.

With bilateral merchandise trade between India and New Zealand reaching USD 1.3 billion in FY 2024-25 and the India-New Zealand Free Trade Agreement signed on 27 April 2026 (not yet in force), which carries a New Zealand commitment to promote private-sector investment into India with the aim of increasing it by USD 20 billion over 15 years, the economic corridor between the two nations is expanding rapidly. An LLP structure is particularly well-suited for New Zealand professional services firms, consultancies, technology companies, and trading businesses that want a leaner operational structure in India without the heavier compliance burden of a Pvt Ltd.

An LLP in India is governed by the Limited Liability Partnership Act, 2008. It provides each partner with limited liability (capped at their agreed contribution), has no minimum capital requirement, requires fewer annual compliance filings than a company, and distributes profits as a partner's share of profit, which is exempt in the partner's hands rather than taxed as a dividend. For New Zealand businesses testing the Indian market or establishing a services delivery presence, the LLP offers an ideal balance of protection and simplicity.

FDI Route and Regulatory Requirements

Since the 2015 policy amendment (DIPP Press Note 12 of 2015, dated 24 November 2015), 100% FDI is permitted in Indian LLPs under the automatic route, provided the LLP operates in sectors where 100% FDI is allowed under the automatic route and there are no FDI-linked performance conditions. This means New Zealand investors can set up an LLP without prior approval from the RBI or DPIIT in eligible sectors.

Eligible sectors include information technology, consulting, professional services, e-commerce (marketplace), manufacturing, food processing, healthcare, and most other sectors where 100% FDI is permitted under the automatic route. Sectors with sectoral caps (defence, telecom, multi-brand retail) or government route requirements do not qualify for LLP formation with FDI. Insurance is now 100% FDI under the automatic route as a sector (per the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025), though the heavily regulated, IRDAI-supervised nature of the sector means it is rarely, if ever, operated through an LLP structure in practice.

New Zealand is not a land-border country, so Press Note 3 (2020) restrictions do not apply. The governing frameworks are FEMA (Foreign Exchange Management Act), the LLP Act 2008, and the Consolidated FDI Policy issued by DPIIT. New Zealand investors must also comply with RBI Master Direction on Foreign Investment in India, which specifies the conditions under which FDI in LLPs is permitted.

Key regulatory requirement: every LLP must have at least two designated partners, and at least one designated partner must be a resident of India (having stayed 120+ days during the financial year). A New Zealand national can be the second designated partner, and a foreign company or LLP can also be a partner (though not a designated partner).

DTAA Benefits for New Zealand Investors

The India-New Zealand DTAA, in force since 1986 with amendments in 1996, 1999, and 2016, provides reduced withholding tax rates that benefit LLP structures. While LLPs distribute profits to partners rather than paying dividends, other intercompany payments benefit from treaty rates:

• Interest: 10% withholding tax on interest payments from the Indian LLP to the New Zealand partner (versus 20% domestic rate)
• Royalties: 10% withholding tax on IP licensing and technology transfer fees
• Fees for Technical Services (FTS): 10% under the treaty

A significant advantage of the LLP structure is that a partner's share of LLP profit is exempt in the partner's hands, so no further Indian tax or withholding applies when profits are distributed, unlike a dividend from a Pvt Ltd, which is taxable in the shareholder's hands and subject to withholding. The India-New Zealand treaty is a covered tax agreement under the Multilateral Instrument, so treaty benefits on other payments are also subject to the principal purpose test. The New Zealand partner receives their share of profits, which is then taxed in New Zealand as per domestic law. This can result in more efficient profit repatriation compared to a company structure, depending on the specific circumstances. The New Zealand partner must furnish a valid Tax Residency Certificate (TRC) from Inland Revenue New Zealand and Form 10F to claim treaty benefits on applicable payments.

Document Requirements and Authentication

Both New Zealand and India are members of the Hague Apostille Convention (New Zealand acceded on 7 February 2001, in force for New Zealand from 22 November 2001), so the streamlined apostille process applies. Apostilles in New Zealand are issued by the Authentication Unit of the Department of Internal Affairs (DIA) in Wellington, not by the Ministry of Foreign Affairs and Trade.

New Zealand investors must prepare and apostille the following documents:

• Passport copies of all proposed designated partners (notarized and apostilled)
• Address proof of New Zealand-based partners (utility bill or bank statement, not older than 2 months, notarized and apostilled)
• Proof of registered office of the New Zealand entity (if a company is becoming a partner)
• Board resolution or partner consent of the New Zealand entity authorizing the India LLP formation (notarized and apostilled)
• Certificate of incorporation or registration of the New Zealand entity from the Companies Office (certified and apostilled)
• Power of Attorney in favour of an Indian representative

Standard processing at the DIA Authentication Unit takes up to 15 working days at NZD 37 per apostille certificate, with an urgent 5-working-day service for an additional NZD 120. Each designated partner needs a Digital Signature Certificate (DSC) from an Indian Certifying Authority, obtainable remotely via video verification. Designated partners also require a Designated Partner Identification Number (DPIN), which is similar to the DIN required for company directors.

Step-by-Step Registration Process

LLP registration in India is handled through the MCA portal using a two-step filing process:

1. Obtain DSCs: All designated partners apply for Digital Signature Certificates from an Indian Certifying Authority. New Zealand-based partners can complete video-based KYC remotely. Timeline: 1-2 business days.
2. Apply for DPIN: For a new LLP, DPINs for up to two proposed designated partners are applied for inside the FiLLiP incorporation form itself; any further designated partners apply separately through Form DIR-3. Anyone who already holds a DIN uses that number as their DPIN. Timeline: 1-3 business days.
3. Name reservation (RUN-LLP form): Reserve the LLP name through the Reserve Unique Name (RUN-LLP) service on the MCA portal. Up to two names can be proposed. Timeline: 1-2 business days.
4. File FiLLiP form: The Form for Incorporation of Limited Liability Partnership (FiLLiP) is the main incorporation form. It includes partner details, registered office address, capital contribution, and the LLP agreement. PAN and TAN are allotted simultaneously. Timeline: 5-7 business days.
5. LLP Agreement filing: The LLP Agreement must be filed with the ROC within 30 days of incorporation using Form 3. This agreement defines the rights, duties, and profit-sharing ratio among partners.
6. Open Indian bank account: Open a bank account in the LLP's name. Receive FDI contribution from the New Zealand partner. Timeline: 1-2 weeks.
7. RBI reporting: File the necessary RBI compliance reports for the foreign investment received, including intimation to the AD Category I bank.

Timeline and Costs

The end-to-end timeline for a New Zealand investor to register an LLP in India is typically 4-6 weeks:

Estimated costs:

• Government fees (MCA): INR 500-2,000 depending on contribution amount
• DSC: INR 1,500-2,500 per designated partner
• Stamp duty on LLP agreement: Varies by state (typically INR 1,000-5,000)
• Professional fees: INR 10,000-35,000 for a CA/CS firm handling the filing
• Apostille fees (New Zealand): NZD 37 per apostille certificate, plus courier charges

LLP registration is generally less expensive than Pvt Ltd incorporation due to lower government fees and simpler documentation requirements.

Post-Registration Compliance

LLPs have significantly lighter compliance requirements compared to Private Limited Companies, making them attractive for smaller operations:

• Annual return (Form 11): Filed within 60 days of the close of the financial year (by May 30)
• Statement of Account & Solvency (Form 8): Filed within 30 days from the end of 6 months of the financial year (by October 30)
• Income tax return: Due by 31 July where no audit is required, 31 October where a tax audit applies, and 30 November where a transfer pricing report (Form 3CEB) is required
• Tax audit: Required if turnover exceeds INR 1 crore (INR 10 crore if cash transactions are below 5%)
• GST returns: Monthly or quarterly if GST-registered
• Transfer pricing: Form 3CEB is required for any international transaction with the New Zealand partner regardless of value; the INR 1 crore threshold only governs the Rule 10D documentation-maintenance relief
• FLA return: Annual Foreign Liabilities and Assets return to RBI by July 15
• DIR-3 KYC: Annual KYC by 30 September for every designated partner holding a DIN or DPIN

Unlike companies, LLPs are not required to hold board meetings or AGMs, or to maintain the statutory registers prescribed by the Companies Act. Annual KYC still applies: every designated partner holding a DIN or DPIN must file DIR-3 KYC by 30 September. On balance, annual compliance is simpler and less costly. Refer to our Compliance Calendar for all key dates.

Common Challenges for New Zealand Companies

• Resident designated partner: At least one designated partner must be an Indian resident (120+ days). New Zealand firms typically engage a nominee designated partner service until an India-based team member can fill the role permanently.
• Limited fundraising options: Unlike a Pvt Ltd, an LLP cannot issue equity shares or raise equity capital from venture capital or private equity investors. If the business plans to raise external funding in the future, a Pvt Ltd may be more appropriate.
• Conversion complexity: If the business outgrows the LLP structure, converting an LLP to a Pvt Ltd is possible but involves additional regulatory steps, including fresh ROC filings, capital restructuring, and potential tax implications on the conversion.
• Banking familiarity: Some Indian banks are less familiar with LLPs having foreign partners compared to foreign-owned Pvt Ltd companies. Choosing a bank with experience in foreign investment accounts (HDFC, ICICI) helps avoid delays.
• FDI sector eligibility: FDI in LLPs is only permitted in sectors where 100% FDI is allowed under the automatic route with no performance conditions. Sectors with caps or government route requirements cannot use the LLP structure for foreign investment.

Frequently Asked Questions

Can a New Zealand company be a partner in an Indian LLP?

Yes. A New Zealand company or LLP can be a partner in an Indian LLP. However, only natural persons (individuals) can be designated partners. So the New Zealand entity can be a contributing partner, but at least two individuals must serve as designated partners, with at least one being an Indian resident.

Is 100% FDI allowed in Indian LLPs?

Yes. Since DIPP Press Note 12 of 2015, dated 24 November 2015, 100% FDI is permitted in LLPs under the automatic route, provided the LLP operates in sectors where 100% FDI is allowed under the automatic route and there are no FDI-linked performance conditions attached to that sector.

What is the difference between a partner and a designated partner?

All partners share in the profits and have limited liability. Designated partners have additional responsibilities: they are accountable for compliance with the LLP Act, sign filings, and represent the LLP before regulatory authorities. Every LLP must have at least two designated partners, and at least one must be an Indian resident.

How are LLP profits taxed in India?

An Indian LLP is taxed at a flat rate of 30% on its total income, plus surcharge and health and education cess (effective rate approximately 34.94% for income above INR 1 crore). A partner's share of that profit is then exempt in the partner's hands, so no further Indian tax or withholding applies when profits are distributed.

Is there a minimum capital contribution for an LLP with foreign partners?

No. There is no minimum capital contribution prescribed under the LLP Act 2008. Partners can agree on any contribution amount in the LLP Agreement. However, the contribution should be sufficient for the intended business operations.

Can an LLP be converted to a Private Limited Company later?

Yes. Section 366 of the Companies Act 2013 allows conversion of an LLP into a company. The process involves passing a resolution, filing with the ROC, obtaining a fresh Certificate of Incorporation, and transferring all assets and liabilities. Professional guidance is recommended for the tax implications of conversion.

What is the LLP Agreement, and is it mandatory?

The LLP Agreement governs the mutual rights and duties of partners. It must be filed with the ROC within 30 days of incorporation using Form 3. While not mandatory for incorporation itself, operating without a proper LLP Agreement means the default provisions of Schedule I of the LLP Act apply, which may not suit all business arrangements.