Register an LLP in India from Romania

How to Register a Limited Liability Partnership in India from Romania

A Limited Liability Partnership (LLP) is a hybrid business structure that combines the limited liability protection of a company with the operational flexibility and lower compliance requirements of a partnership. For Romanian investors and professionals looking to establish a presence in India, an LLP offers an attractive alternative to a Private Limited Company, particularly for service-oriented businesses such as consulting, technology, legal, accounting, and design firms.

100% FDI is permitted in Indian LLPs under the automatic route, provided the LLP operates in sectors where 100% FDI is allowed and there are no FDI-linked performance conditions. This opens LLPs to foreign investors from countries like Romania, making it possible to register an LLP without prior government approval. India-Romania bilateral trade was about US$1.23 billion in FY 2025-26, after peaking at close to US$3 billion in FY 2023-24, and the two countries issued a joint declaration marking the 10th anniversary of their Extensive Partnership in February 2024. For Romanian professionals and SMEs seeking a cost-effective entry into the Indian market, an LLP provides a compelling structure. For detailed comparisons, see Private Limited vs LLP and LLP vs Partnership Firm.

FDI Route and Regulatory Requirements

100% FDI in LLPs is permitted under the automatic route for sectors where 100% FDI is allowed without any FDI-linked performance conditions. The Romanian investor does not need prior approval from the RBI or the Government of India.

Key Regulatory Points

• FDI route: Automatic, in sectors with 100% FDI and no performance conditions
• Ownership: 100% foreign ownership permitted; a Romanian individual or company can be a designated partner
• Capital contribution: No minimum capital requirement under the LLP Act 2008
• Partners: Minimum 2 designated partners required, of which at least 1 must be a resident of India (stayed in India for at least 120 days during the financial year)
• DPIN: Each designated partner must obtain a Designated Partner Identification Number
• LLP Agreement: Mandatory agreement governing the rights, duties, and obligations of partners

Since Romania does not share a land border with India, Press Note 3 (2020) restrictions do not apply. Romanian investors can invest freely without additional security clearances. However, FDI in LLPs is restricted in sectors where FDI caps apply (e.g., multi-brand retail, banking, insurance, defence) or where FDI-linked performance conditions exist. See Automatic Route vs Government Approval.

Sectors Where LLP FDI Is Not Permitted

FDI in LLPs is not allowed in the following scenarios:

• Sectors where FDI is less than 100% under the automatic route
• Sectors where FDI is allowed under the government approval route
• Sectors where FDI-linked performance conditions are imposed (e.g., single-brand retail with local sourcing requirements)
• Agricultural activities, real estate business, and multi-brand retail trading

DTAA Benefits for Romanian Investors

The Double Taxation Avoidance Agreement between India and Romania provides favourable tax treatment for Romanian investors. The original convention was signed on 10 March 1987 and has been replaced by a revised convention signed on 8 March 2013, which entered into force on 16 December 2013 and applies in India from 1 April 2014 (CBDT Notification No. 13/2014, S.O. 680(E)):

• Business profits (Article 7): Taxable in India only if the Romanian partner has a Permanent Establishment in India (the LLP itself would constitute a PE)
• Interest (Article 11): Capped at 10% withholding tax
• Royalties (Article 12): Capped at 10% withholding tax
• Fees for technical services (Article 12): Capped at 10% withholding tax

LLPs in India are taxed at a flat rate of 30% on total income; with the 12% surcharge that applies where total income exceeds INR 1 crore and the 4% health and education cess, the effective rate reaches 34.94%. While this is higher than the 25.17% rate available to Private Limited Companies under Section 115BAA of the Income-tax Act 1961 (carried forward as section 200 of the Income-tax Act 2025, which took effect on 1 April 2026), LLPs benefit from the absence of Dividend Distribution Tax or additional tax on profit distribution. Partners' shares of LLP profits are exempt from tax in their hands under Schedule III (Sl. No. 2) of the Income-tax Act 2025, which carries forward section 10(2A) of the Income-tax Act 1961. Romanian partners should obtain a Tax Residency Certificate from Romania's ANAF and file Form 10F in India to claim DTAA benefits on any payments subject to withholding tax.

Document Requirements and Authentication

Romania acceded to the Hague Apostille Convention on 7 June 2000 and the Convention entered into force for Romania on 16 March 2001. Romanian documents require an apostille, which is significantly faster and simpler than the embassy attestation process. Romania has designated three competent authorities: the Offices of the Prefect for administrative documents, the Chambers of Notaries Public for notarial acts, and the tribunals for court documents and for official certificates authenticating signatures on private documents. See Apostille vs Embassy Attestation.

Documents Required from Romanian Partners

• Passport copies of all proposed designated partners from Romania (notarised and apostilled)
• Address proof of Romanian partners (utility bill or bank statement, not older than 2 months, apostilled)
• Photographs of all partners
• Proof of registered address of Romanian entity, if the partner is a company (apostilled)
• Board resolution from the Romanian parent company authorising investment, if applicable
• No Objection Certificate (NOC) from the Romanian company, if it is a designated partner

Documents Prepared in India

• FiLLiP (Form for incorporation of Limited Liability Partnership) filed on the MCA portal
• LLP Agreement (executed on non-judicial stamp paper within 30 days of incorporation)
• Digital Signature Certificate (DSC) for all designated partners
• Consent to act as designated partner (Form 9)
• Proof of registered office address (rent agreement + NOC from landlord + utility bill)

Step-by-Step Registration Process

The incorporation of an LLP in India is handled through the MCA's online portal using the FiLLiP form.

Step 1: Obtain Digital Signature Certificates (DSC)

All proposed designated partners must obtain a Class 3 Digital Signature Certificate. Romanian partners can apply through Indian DSC providers by submitting notarised passport copies and address proof. Timeline: 3-5 days.

Step 2: Apply for DPIN (Designated Partner Identification Number)

Each designated partner must obtain a DPIN, which is the LLP equivalent of a DIN. For Romanian nationals, the DPIN application is filed as part of the FiLLiP form. Supporting documents include apostilled passport copies and address proof.

Step 3: Reserve LLP Name

Apply for name reservation through the RUN-LLP service on the MCA portal. Two name choices can be submitted. The name must include "LLP" or "Limited Liability Partnership" and should not be identical or similar to existing registered entities. Timeline: 1-3 days for approval.

Step 4: File FiLLiP Form

File the FiLLiP form on the MCA portal with all required documents, subscriber sheets signed by all partners, and consent forms. The form includes details of all designated partners, the registered office address, and the proposed business activities. Timeline: 5-10 working days for approval.

Step 5: Receive Certificate of Incorporation

The ROC issues the Certificate of Incorporation with the LLP Identification Number (LLPIN). The LLP is now legally constituted.

Step 6: Execute LLP Agreement

Within 30 days of incorporation, execute the LLP Agreement on non-judicial stamp paper. The agreement must be filed with the ROC in Form 3 within 30 days of execution. The LLP Agreement governs the mutual rights and duties of the partners, profit-sharing ratios, capital contributions, and management structure.

Step 7: Open Bank Account and Receive FDI

Open a current account with an Indian bank. The Romanian partner(s) can remit their capital contribution through banking channels. File the requisite FEMA reporting forms for the FDI inflow.

Timeline and Costs

The end-to-end timeline for registering an LLP in India from Romania is approximately 4-6 weeks:

Cost Breakdown

• Government fees (MCA): INR 1,500-5,000 (depends on capital contribution)
• Stamp duty for LLP Agreement: INR 3,000-15,000 (varies by state)
• DSC: INR 1,500-3,000 per partner
• Professional fees (CS/CA): INR 15,000-40,000
• Apostille charges in Romania: a per-document fee set by the issuing authority (prefecture, notary chamber or tribunal) - confirm the current tariff
• Certified translations: charged per page by an authorised translator
• Total estimated cost: INR 25,000-65,000 plus apostille and translation costs

Post-Registration Compliance

LLPs in India have significantly lower compliance requirements compared to Private Limited Companies, which is one of their key advantages:

• Annual return (Form 11): Filed with the ROC within 60 days of the close of the financial year (by 30 May each year)
• Statement of Account and Solvency (Form 8): Filed within 30 days of the end of 6 months from the close of the financial year (by 30 October each year)
• Income tax return: Filed annually; LLPs are taxed at 30% flat rate (effective rate 34.94% including surcharge and cess)
• Audit: A statutory audit under the LLP Rules is required if turnover exceeds INR 40 lakh or partners' contribution exceeds INR 25 lakh; a separate tax audit applies where turnover exceeds INR 1 crore (INR 10 crore where cash receipts and cash payments are each within 5% of the total)
• GST compliance: Monthly or quarterly GST returns if applicable
• FEMA reporting: Reporting of FDI inflows through the AD bank

Note: LLPs are not required to hold board meetings, annual general meetings, or maintain statutory registers like Private Limited Companies. This significantly reduces the ongoing compliance burden and cost. Beacon Filing provides comprehensive annual compliance and tax filing services for LLPs.

Common Challenges for Romanian Investors

Sector Restrictions on LLP FDI

FDI in LLPs is permitted only in sectors where 100% FDI is allowed under the automatic route with no performance conditions. This excludes sectors like single-brand retail (which has local sourcing conditions), defence (which has offset requirements), and banking/insurance (which have FDI caps). Romanian investors targeting these sectors must use a Private Limited Company or WOS structure instead. Verify the specific sector's FDI eligibility before choosing the LLP structure.

Resident Designated Partner Requirement

At least one designated partner must be a resident of India (120+ days of stay). Romanian investors who do not have a contact in India can appoint a professional designated partner. However, the designated partner has significant legal responsibilities and potential personal liability for compliance defaults. The LLP Agreement should clearly define the scope of each partner's authority, including limitations on financial commitments and operational decisions.

LLP Agreement Drafting

The LLP Agreement is the foundational governance document and must be carefully drafted to protect the Romanian partner's interests. Key clauses to include: capital contribution obligations, profit-sharing ratios, decision-making authority (including reserved matters requiring unanimous consent), dispute resolution mechanisms (preferably arbitration in a neutral jurisdiction), exit provisions, and non-compete obligations. Indian stamp duty on the LLP Agreement varies by state, so the choice of registered office location affects costs.

Tax Rate Comparison

LLPs are taxed at 30% flat rate (effective rate 34.94%), which is higher than the 22% rate (effective rate 25.17%) available to Private Limited Companies under Section 115BAA. However, LLPs do not pay Dividend Distribution Tax, and partners' profit distributions are tax-exempt. For service businesses with moderate profits and no plans for external funding, the LLP structure may still be tax-efficient overall. Romanian investors should model both structures with their tax advisors before deciding.

Limited External Funding Options

LLPs cannot issue shares and therefore cannot raise equity capital from external investors, venture capital funds, or through IPOs. If the Romanian investor's business plan involves raising external equity in the future, a Private Limited Company is the better choice. LLPs can accept capital contributions from partners and take on debt, but the inability to dilute equity through share issuance limits growth financing options.

Frequently Asked Questions

Can a Romanian citizen be a designated partner in an Indian LLP?

Yes. Romanian citizens can be designated partners in an Indian LLP, provided the LLP operates in a sector where 100% FDI is allowed under the automatic route with no FDI-linked performance conditions. The Romanian partner must obtain a DPIN and DSC before incorporation.

Is there a minimum capital contribution for foreign-owned LLPs?

No. The LLP Act 2008 does not prescribe any minimum capital contribution. Partners can agree on any amount through the LLP Agreement. However, the capital should be sufficient for the planned business operations and should be documented in the LLP Agreement.

How is an LLP different from a Private Limited Company?

Key differences include: LLPs have lower compliance requirements (no board meetings, no AGM), cannot issue shares (no equity funding), are taxed at 30% flat (vs 22% for companies), partners' profit distributions are tax-exempt, and LLPs have no minimum paid-up capital requirement. LLPs are ideal for professional services, while companies are better for businesses seeking external equity.

Can a Romanian company (SRL) be a partner in an Indian LLP?

Yes. A Romanian company (SRL, SA, or other legal entity) can be a designated partner in an Indian LLP. The Romanian company must provide its Certificate of Incorporation, board resolution, and details of its beneficial owners. At least one designated partner must still be an Indian resident individual.

What is the tax advantage of an LLP over a Branch Office?

LLPs are taxed at 30% (effective 34.94%), while Branch Offices are taxed at 35% (effective 38.22%). Additionally, profit distributions from an LLP to partners are exempt in the partners' hands under Schedule III of the Income-tax Act 2025 (formerly section 10(2A) of the 1961 Act), while Branch Office profit remittances are subject to additional compliance requirements. The combined tax saving can be substantial.

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

Yes. The LLP Act 2008 and Companies Act 2013 provide for conversion of an LLP into a Private Limited Company. The process involves obtaining consent of all partners, filing with the ROC, and complying with the Companies Act requirements. Plan for 3-4 months for the conversion process.

Does an LLP need GST registration?

If the LLP supplies taxable services and its aggregate turnover exceeds INR 20 lakh (INR 10 lakh in special category states), or supplies goods and its turnover exceeds INR 40 lakh (INR 20 lakh in special category states), it must register for GST and file periodic returns. Most service-oriented LLPs with foreign clients will need GST registration.