By Manu Rao | Updated March 2026
The Scenario
An architecture and interior design firm in Sydney with 35 employees and AUD 8 million in annual revenue wants to open a studio in Bengaluru. Their client base includes Australian developers building residential projects, and they have started receiving enquiries from Indian real estate companies who saw their portfolio at an industry expo in Mumbai. The two founding partners — both Australian citizens with no Indian background — want to hire 10-15 architects and designers in India, initially to support Australian projects and gradually to take on Indian contracts directly.
Their planned investment is AUD 120,000 (approximately Rs 65 lakh), covering incorporation, six months of co-working space, and initial salaries.
Why India?
India's real estate sector is projected to reach $1 trillion by 2030, driven by urbanization, rising incomes, and government programs like PMAY (Pradhan Mantri Awas Yojana). The demand for quality architecture and design services is outpacing supply, especially in the premium residential and commercial segments.
For the Australian firm, the talent equation is strong. India produces over 50,000 architecture graduates annually. A qualified architect in Bengaluru earns about AUD 12,000-20,000 per year — compared to AUD 65,000-90,000 in Sydney. The quality of work, particularly in 3D visualization and BIM modeling, has reached a level where Indian studios handle complex projects for global firms.
Australia and India signed the Economic Cooperation and Trade Agreement (ECTA) in April 2022, which reduced tariffs and opened services trade. The Comprehensive Economic Cooperation Agreement (CECA), a broader deal, is under negotiation as of 2026.
Entity Choice
A Private Limited Company is the right structure. Architecture firms in India need to register with the Council of Architecture (COA) if they want to practice architecture independently. However, a company providing design, visualization, and project management services (without signing off as Architect of Record on Indian buildings) does not need COA registration. For initial operations focused on supporting Australian projects, a standard Private Limited works.
If they later want to sign off on Indian projects, they will need to employ a COA-registered Indian architect as the principal architect. The company itself does not need COA registration — only the individual architect does.
A Liaison Office was considered but it cannot earn revenue or hire a full team. A LLP was ruled out because the partners want to retain the option of raising funding from Indian real estate investors later.
FDI Route and Sector Rules
Professional services (architecture, engineering, design) allow 100% FDI under the automatic route. No government approval is needed. The Australian parent entity will subscribe to shares in the Indian company.
Construction development projects have separate FDI rules (minimum capitalization of $5 million for wholly owned projects, minimum area requirements). But these rules apply to real estate developers, not to architecture firms providing professional services to developers. The distinction is important — the Indian company will bill for design services, not develop or own real estate.
Australia is a Hague Apostille Convention member. Documents are apostilled through the Australian Department of Foreign Affairs and Trade (DFAT). Processing typically takes 5-10 business days.
Registration Process
- Apostille — Australian passports, company registration extract (ASIC certificate), and board resolution apostilled through DFAT in Canberra.
- DSC and DIN — For both Australian founders and the appointed Indian resident director.
- SPICe+ Filing — Name reservation and incorporation. Since "Architects" in the company name may require NOC from the Council of Architecture in some cases, consider alternative naming like "Design Studio" or "Design Consultants."
- Professional Tax Registration — Required in Karnataka for employers and employees.
- GST Registration — Needed if the company's aggregate turnover exceeds Rs 20 lakh (Rs 10 lakh in certain states). For a company providing services to Australia (export of services), GST is applicable from the first rupee if claiming input tax credit.
Timeline: 3-4 weeks from document apostille to incorporation. The time zone alignment is excellent — Bengaluru is only 4.5 hours behind Sydney (AEDT), making same-day collaboration easy.
Tax Structure
The India-Australia DTAA has been in force since 1991. Key rates:
| Income Type | DTAA Rate | Domestic Rate |
|---|---|---|
| Dividends | 15% | 20% |
| Interest | 15% | 20% |
| Royalties | 15% (10% for industrial, scientific, literary/artistic works) | 20% |
| FTS | Not separately defined; falls under Business Profits | 20% |
An interesting feature of the India-Australia DTAA is that Fees for Technical Services (FTS) are not explicitly covered as a separate article. This means payments for design services from the Indian company to the Australian parent may be classified as Business Profits (Article 7) rather than FTS — and Business Profits are taxable only if the Australian firm has a Permanent Establishment in India. With the Indian subsidiary being a separate legal entity, the Australian parent may not have a PE, making these payments potentially non-taxable in India.
However, this is a grey area that depends on facts. Get a specific opinion from a tax advisor before structuring inter-company payments.
The Indian company pays 25% corporate tax under Section 115BAA. Export of services (work done for Australian clients) is zero-rated under GST when the place of supply is outside India. File an LUT to export without paying IGST.
In Australia, the parent reports worldwide income. Australian corporate tax is 25% for base rate entities (aggregated turnover below AUD 50 million). Foreign tax credits are available for Indian taxes paid.
Ongoing Compliance
- MCA filings — Board meetings (4/year), AGM, MGT-7A, AOC-4
- Tax — Corporate tax return, advance tax, TDS returns, transfer pricing study
- GST — Monthly GSTR-1 and GSTR-3B; LUT renewal annually for export of services
- Employment — EPF, ESI, professional tax (Karnataka), gratuity provisions
- RBI FLA Return — Annual filing by July 15
Common Pitfalls
- Confusing architecture practice registration with company registration — The company registration under the Companies Act does not automatically permit architectural practice in India. If the firm wants to sign drawings for Indian building projects, it needs a COA-registered architect on staff. Plan for this from the start if Indian projects are on the roadmap.
- Not structuring inter-company billing carefully — If the Indian entity works on Australian projects, the billing arrangement (cost-plus, fixed fee, or revenue share) has transfer pricing implications. Set up the inter-company agreement before operations start.
- Underestimating Indian real estate project timelines — Indian construction projects routinely face 6-24 month delays. If the firm takes on Indian design contracts, payment terms will stretch. Build cash reserves to handle delayed receivables.
- Missing the resident director requirement — Neither Australian founder can serve as the resident director since they live in Sydney. Appoint a senior Indian hire (studio head or lead architect) as the resident director early in the setup process.
How Beacon Filing Helps
Beacon Filing assists Australian professional services firms with company registration in India, including apostille coordination through DFAT, SPICe+ filing, and post-incorporation registrations in Karnataka. We help identify suitable resident director candidates and set up compliance systems for ongoing operations.
Our annual compliance packages cover MCA, GST, income tax, and employment law filings — calibrated for the Australian financial year alignment.