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With 40+ years of experience and 1000+ businesses served across diverse industries, we continue to drive innovation, efficiency, and sustainable growth for organizations worldwide.
We're a leading provider of essential business services to support the global progress of companies and funds.
Here at IMC, our purpose is progress. Learn more
Be in the know with our latest news, insights and analysis
Our Board and Executive Leadership Team
Find out what makes our business and our brand tick
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India Entry Services
Wholly owned subsidiary, branch office or liaison office. IMC takes a foreign parent from structuring decision to a funded, compliant Indian entity, under one point of contact.
Quick Answer
A foreign company incorporates in India by registering a private limited company, which is most commonly structured as a wholly owned subsidiary, using the SPICe+ form on the MCA portal. The parent can hold 100 percent of the shares in sectors open under the automatic route. At least one director must be resident in India. Four to six weeks is a realistic timeline.
Company registration in India has been a largely digital, single-form process since SPICe+ replaced the older filings. What takes time is everything around it: getting the parent board's documents apostilled in the home jurisdiction, opening a bank account that will accept an inward remittance from the parent, and reporting that remittance to the Reserve Bank of India inside the window.
FDI Data
Two datasets are worth having in front of you before a structure is chosen, because they explain where the competition for talent and premises actually is.
DPIIT reports FDI equity inflow. The Reserve Bank reports gross FDI of US$94.84 billion for the same period, which includes reinvested earnings and other capital. Both figures are correct and they measure different things, so it is worth checking which one a competing adviser is quoting.
Structures Compared
Six structures are available, in two families. A subsidiary or joint venture creates a new Indian company, separate from the parent and taxed as a domestic company. A branch, liaison or project office is the parent itself operating in India through a registered place of business, taxed at the foreign company rate. The choice decides what the India operation may invoice for and what the parent is exposed to.
| Route | Parent stake | What it may do in India | Approval | Tax on India income | Typical use |
|---|---|---|---|---|---|
| Wholly owned subsidiary | Up to 100% | Any activity permitted to an Indian company in a sector open to FDI. Invoices, hires, imports, borrows. | Automatic route in most sectors | Domestic company rates | Long-term operating presence, GCC, product or services company |
| Joint venture | Below 100% | Same as a subsidiary, subject to the shareholders agreement and any sectoral cap. | Automatic or government route by sector | Domestic company rates | Sectors with FDI caps, or where a local partner brings licences or distribution |
| Branch office | Not applicable | Export and import, professional and consultancy services, IT services, buying and selling agency work. May earn income and remit profit. | AD Category-I bank, RBI in some cases | Foreign company rate | Engineering, EPC and professional firms servicing Indian clients directly |
| Liaison office | Not applicable | Representation and market research only. May not invoice, may not contract commercially, may not earn income. | AD Category-I bank | No taxable income if restrictions observed | Market testing before committing to an operating entity |
| Project office | Not applicable | Work under one specific contract awarded by an Indian party, and nothing else. | AD Category-I bank where funding conditions are met | Foreign company rate | Site-based infrastructure and turnkey contracts |
| LLP | Up to 100% | Business activity in sectors allowing 100 percent FDI under the automatic route with no performance conditions. | Automatic route, restricted sectors | Partnership taxation, no dividend tax | Professional services and asset-light ventures wanting pass-through treatment |
Most inbound projects end as a wholly owned subsidiary. The two worth a second look are the branch office, where the India work is genuinely an extension of contracts the parent already holds, and the LLP, where the group wants pass-through treatment and can live with the sectoral restrictions.
Not sure which route fits? Send us the sector and the parent jurisdiction and we will come back with a view.
Get a route recommendationRecommended Route
A wholly owned subsidiary is an Indian private limited company in which the foreign parent holds the entire shareholding, save for one share held by a nominee to meet the two-shareholder minimum. Once incorporated it is an Indian company for almost every purpose: it contracts in its own name, employs, registers for GST, bids for work closed to foreign entities and holds intellectual property.
The parent's exposure is limited to its subscribed capital. A branch office carries no such wall. Liabilities incurred in India are the foreign company's own, enforceable against its global balance sheet.
A subsidiary is not confined to the parent's existing lines of business the way a branch office is, and it is not barred from earning revenue the way a liaison office is.
About 25.17 percent effective under the concessional domestic regime, against the 35 percent foreign company rate that applies to a branch office. Roughly ten percentage points before any planning.
A subsidiary adds a second layer. Profits distributed to a foreign parent attract dividend withholding, whereas a branch office remits post-tax profit without a further distribution tax. Where a group expects to repatriate most of what it earns rather than reinvest it, run that arithmetic before the structure is fixed.
Getting Ready
No approval is needed before incorporating a subsidiary in a sector open under the automatic route. There are conditions the company must satisfy at registration, and one of them reshapes plans.
Documents from a country party to the Hague Apostille Convention of 1961 are notarised locally and then apostilled by the designated competent authority. One certificate, no embassy involvement.
Documents from a non-Convention country are notarised, legalised by the foreign ministry, then attested by the Indian embassy or consulate. Three steps, and the embassy queue is the least predictable part of the whole project. Any document not in English needs an official translation, authenticated with the original.
Passport, apostilled or consularised. Proof of residential address, typically a bank statement, utility bill or driving licence. Passport-size photograph. Signed consent to act as director in Form DIR-2 and the declaration in Form DIR-8.
Certificate of incorporation. Charter documents, being the memorandum and articles or their local equivalent. A board resolution approving the subscription, fixing the shareholding and naming an authorised representative to sign on the company's behalf. All apostilled or consularised.
Address proof carries an age limit. The window accepted for foreign nationals is longer than the two months applied to Indian residents, but it is still finite, so documents gathered at the start of a slow apostille cycle can expire before the filing goes in. Collect them once the name is reserved, not before.
Section 149(3) of the Companies Act, 2013 requires at least one director who stays in India for not less than 182 days during the financial year, applied proportionately in the year of incorporation. The test is physical presence, not citizenship: a foreign national actually in India for the required period satisfies it.
A group entering India for the first time has nobody who meets the test on day one. There are two workable answers. Appoint a professional nominee director under a written mandate with an indemnity for the first year, or bring forward the hire of the India country manager so the appointment is genuine from the start. The second is slower and considerably safer.
A large amount of published guidance still says "previous calendar year". That was the position before the section was amended. Anyone relying on it is working from superseded text.
Registration Process
SPICe+ consolidates what used to be several separate filings. One submission produces the company, its Corporate Identity Number, its PAN, its TAN and, if elected, its GST and employer registrations.
DSC application · 2 to 4 working days
Video verification for applicants abroad. Runs in parallel with document apostille.
SPICe+ Part A · 1 to 3 working days
Two names may be proposed. An approved name is held for 20 days. Names resembling an existing company or a registered trademark are rejected, so run a trademark search first.
SPICe+ Part B · 3 to 7 working days
Subscriber and director details, capital structure, registered office, and the DIN application for first directors.
INC-33, INC-34, INC-9 · filed with step 3
Electronic memorandum and articles, plus the subscriber and first director declaration, auto-generated in most cases.
AGILE-PRO-S (INC-35) · filed with step 3
EPFO and ESIC registration, professional tax where the state requires it, bank account opening and GST registration if elected.
INC-11 · issued with step 3
Issued with CIN, PAN and TAN. The company legally exists from this date.
Bank KYC · 15 to 25 working days
A separate process run by the bank, not the Registrar, and the single biggest source of slippage on an India entry project.
INC-20A · within 180 days
Confirms every subscriber has paid for their shares. The company cannot commence business or borrow until this is filed.
Steps 1 to 6 are typically two to three weeks once documents are in hand. Step 7 decides whether the project takes a month or three.
IMC runs all eight steps, including the bank.
Request a structuring callTimeline & Budget
Published timelines of seven to ten days describe the Registrar's processing, not the project. Measured from first instruction to a funded company that can trade, the honest range is four to six weeks, and longer where the parent sits in a non-Convention country or the sector needs government approval.
| Cost head | Basis | What drives it |
|---|---|---|
| MCA filing fee | Slab on authorised capital | Nominal at typical starting capital, waived or minimal up to prescribed thresholds. |
| Stamp duty | State of the registered office | Varies significantly between states. Maharashtra, Delhi and Karnataka are not the same number. |
| Digital signatures | Per signatory | Higher for applicants outside India because of the verification process. |
| Apostille or consularisation | Per document, home jurisdiction | Often the largest single line for a non-Convention parent, and the least predictable. |
| Professional fees | Fixed scope | Incorporation, drafting, name approval, filings and the first FEMA report. |
| Recurring compliance | Annual | Statutory audit, annual filings, director KYC, FLA return, income tax return and, where applicable, transfer pricing certification. |
Any provider quoting a single all-in figure without knowing the state of registration, the parent jurisdiction and the number of foreign signatories is quoting a range and calling it a price.
FDI & Compliance
Two questions have to be answered before the parent remits anything. Is the sector open under the automatic route, and does the investor trigger the land border rules?
Most sectors are open to 100 percent foreign investment under the automatic route, which means no prior approval from any authority and reporting after the event. A minority carry caps or conditions, and a short list is prohibited outright.
Defence, insurance, print media, multi-brand retail and broadcasting each carry their own cap or approval condition. Check the position on any one of them against the current consolidated FDI policy rather than assuming it.
Press Note 3 of 2020 required government approval for any investment where the investor, or the beneficial owner of the investment, was situated in or a citizen of a country sharing a land border with India. In practice it caught a great many transactions with only indirect exposure, and approvals were slow.
That regime was relaxed in 2026. Press Note 2 of the 2026 series, issued in March 2026 and given effect through an amendment to the Foreign Exchange Management (Non-Debt Instruments) Rules, moved to a beneficial ownership test set at 10 percent. Aggregate holdings by investors from land border countries below that threshold, with no control rights, fall outside the approval requirement.
The test now looks at the citizenship of the beneficial owner rather than both citizenship and residence, which removes a large category of funds that were caught only because a manager happened to be resident in a border country. A pre-closing reporting obligation applies even where approval is not needed, and an expedited 60-day approval track was introduced for a list of strategic sectors.
For group structures with a Hong Kong or Singapore holding company in the chain, the change is significant and worth re-examining.
FEMA reporting runs on the Reserve Bank's FIRMS portal and is the company's obligation, not the bank's.
| Obligation | Deadline | Detail |
|---|---|---|
| Entity Master registration | Before first filing | One-time registration of the Indian company on the FIRMS portal. |
| Allotment of shares | 60 days from receipt | Funds held longer must be refunded to the remitter. |
| Form FC-GPR | 30 days from allotment | Filed with the FIRC, investor KYC from the remitting bank, a valuation certificate meeting FEMA pricing guidelines, the board resolution, the list of allottees and a company secretary certificate. |
| Form FC-TRS | 60 days from transfer | Required when shares move between a resident and a non-resident after incorporation. |
| Annual FLA return | On or before 15 July | Position as at 31 March. Due every year, fresh investment or not. The most commonly missed of the three. |
Late filing is regularisable on payment of an LSF computed as a fixed component plus a percentage of the amount involved for each year of delay, capped at the amount involved and available for up to three years from the original due date. Beyond that window, compounding under Section 13 of FEMA applies.
For Technology Groups
The incorporation mechanics are identical. What differs is data, intellectual property and equity, and all three have moved in the last eighteen months. Computer software and hardware took US$13.95 billion of FDI equity inflow in FY 2025-26, the largest of any sector, and close to half of all capability centres established since FY2021 were built with an AI focus from the outset.
An EOR is right for a first hire or two, a pilot, or a sales presence. It stops being right when the India team creates IP the group needs to own cleanly, when headcount passes roughly fifteen to twenty, when equity is to be granted on the same terms as everyone else, or when Indian customers must be invoiced in rupees by an Indian entity.
The Digital Personal Data Protection Act, 2023 became operational when its rules were notified in November 2025. Cross-border transfer is currently permitted except to countries the government restricts by notification, and that list has not been published. The default is permissive, but permissive by government discretion rather than by right.
An entity notified as an SDF must appoint a Data Protection Officer resident in India, appoint an independent auditor and conduct annual data protection impact assessments and algorithmic audits. The algorithmic audit reaches the models, not just the database.
Indian copyright vests in the creator unless the work is made under a contract of service, and patent rights need explicit assignment. Employment contracts need a present assignment of work product, not a promise to assign later, together with a moral rights waiver so far as Indian law permits. Contractors and interns need separate written assignments, because nothing vests automatically.
A resident employee or director may acquire shares of the foreign parent under a stock option plan offered globally on a uniform basis. Where that condition is met, the acquisition is not squeezed into the ordinary remittance ceiling. Acquisitions below 10 percent without control are overseas portfolio investment, reported half-yearly through the Indian entity rather than by each employee.
Where the Indian subsidiary develops IP the parent will own, the transfer is a related-party transaction needing arm's length pricing, usually a cost-plus development arrangement with the mark-up set from a benchmarking study rather than picked. Where the Indian entity retains the IP and licenses it out, royalty flows are subject to withholding and treaty analysis. The choice affects the group's effective tax rate, the valuation of the Indian entity at exit, and the transfer pricing exposure for every year in between.
| Decision | The two options | What usually settles it |
|---|---|---|
| IP ownership | Parent owns and subsidiary develops on cost-plus, or subsidiary owns and licenses out. | Where value will be realised at exit, and how much transfer pricing exposure the group will accept year on year. |
| Entity for a capability centre | Wholly owned subsidiary, or an LLP. | Whether equity will be granted, whether external investment is possible later, and whether pass-through treatment is worth the sectoral restrictions. |
| City | Bengaluru or Hyderabad for depth of AI talent, Pune or Chennai for cost, GIFT City for financial services use cases. | Attrition and salary inflation in the target skill band, plus any state incentive package. |
| Data architecture | Process Indian personal data in India, or transfer under the current permissive default. | Appetite for re-engineering later if a restricted country list or a localisation notification is issued. |
| Employment model | EOR for the first hires, or an entity from the start. | IP cleanliness, headcount trajectory, and whether Indian customers must be invoiced in rupees. |
Setting up an India engineering centre?
Talk to the technology entry teamPost-Incorporation
Incorporation starts a set of clocks. The first year is the heaviest because one-time obligations sit alongside the recurring calendar.
| Obligation | Timing | Form or authority |
|---|---|---|
| Appointment of first auditor | Within 30 days of incorporation | By the board. If the board does not act, members must appoint within 90 days. |
| Bank account and receipt of capital | Before the commencement filing | AD Category-I bank |
| FC-GPR reporting | 30 days from allotment | Reserve Bank of India, FIRMS portal |
| Declaration of commencement of business | Within 180 days of incorporation | Form INC-20A with the Registrar |
| GST registration | On crossing the threshold, or earlier by choice | Compulsory from the first rupee for inter-state supply of goods and certain categories. |
| Labour and state registrations | Usually on first hire | Shops and establishments, EPFO, ESIC, professional tax |
| Obligation | Timing | Form or authority |
|---|---|---|
| Director KYC | Annually by 30 September | Form DIR-3 KYC for every director holding a DIN |
| Financial statements | Within 30 days of the AGM | Form AOC-4 |
| Annual return | Within 60 days of the AGM | Form MGT-7 |
| Income tax return | Date depends on audit and transfer pricing applicability | Income Tax Department |
| Transfer pricing certification | Where there are international related-party transactions | Form 3CEB, certified by an accountant |
| FLA return | By 15 July each year | Reserve Bank of India |
| ESOP reporting | Half-yearly where the parent has granted equity | Through the Indian entity |
Tax & Repatriation
An Indian subsidiary is taxed as a domestic company. Most newly incorporated subsidiaries opt into the concessional regime under section 115BAA, giving up most incentive deductions in exchange for the lower rate. The 15 percent rate for new manufacturing under section 115BAB required manufacturing to commence within a window that has closed, so it is not available to a company incorporating today.
| Entity | Rate | Note |
|---|---|---|
| Indian subsidiary, concessional regime | 22 percent base, about 25.17 percent effective | Section 115BAA, with surcharge and cess. Most incentive deductions forgone. |
| Indian subsidiary, new manufacturing | 15 percent | Section 115BAB. Commencement window has closed, so unavailable to a company incorporating now. |
| Branch office of a foreign company | 35 percent plus surcharge and cess | Reduced from 40 percent by the 2024 amendments. |
| Minimum alternate tax | 15 percent of book profits | Does not apply where the concessional regime is elected. |
Taxed in the hands of the non-resident shareholder, with withholding at the domestic rate plus surcharge and cess unless a treaty rate applies. Claiming the treaty rate needs a tax residency certificate, Form 10F and a no permanent establishment declaration.
Deductible for the subsidiary and the most flexible route, but squarely inside transfer pricing.
Available, procedurally heavy, with its own tax treatment. Not a routine repatriation route.
Related-party transactions must be at arm's length, documented contemporaneously and certified in Form 3CEB. A mark-up set casually in year one is the benchmark an assessing officer applies in year five, and the interest on a four-year adjustment can exceed the tax. Setting it from a benchmarking study at the outset costs less than defending it later.
Common Pitfalls
Four problems account for most of the delay and cost overrun on inbound projects. None is at the Registrar.
Incorporation produces a CIN, a PAN and a TAN in a single filing. It does not produce a working bank account. Account opening is a separate KYC exercise run by the bank, it generally begins only after the certificate is issued, and for a foreign-owned company it involves the parent's constitutional documents, the full beneficial ownership chain and, at most banks, in-person or video verification of a signatory. Three to four weeks is normal. Groups that assume it runs alongside incorporation lose a month.
The 182-day test is a test of actual presence. Where a name is lent for a fee with no involvement in the business, the individual carries full director liability under the Companies Act regardless of the private understanding, and the company carries the risk that the appointment is questioned in diligence. A nominee engaged under a written mandate with an indemnity, replaced by a genuine local appointment once the business has one, is the defensible version.
The 30-day clock runs from allotment, not from the day the money lands. It is missed regularly because the allotment sits with the company secretary and the reporting is assumed to be the bank's job. It is not. The delay is regularisable through the Late Submission Fee, but an unreported inward investment surfaces in every subsequent FEMA filing and in every diligence exercise thereafter.
A liaison office may not invoice, may not sign a commercial contract and may not earn income in India. It is sometimes selected because setup looks cheaper, and the constraint only becomes real when the first Indian customer cannot be billed. Converting to a branch or a subsidiary at that point restarts the approval cycle.
Why IMC
Entry route analysis and FDI position. Name approval and incorporation. Apostille coordination in the parent jurisdiction. Bank account opening. FEMA reporting. Secretarial, payroll and tax calendar once trading. For technology groups: IP assignment documentation, transfer pricing policy and DPDP readiness.
Established in 1979. Offices in Delhi NCR, Mumbai, Dubai and Singapore. 150+ professionals. Registered with the ICSI, ICAI and ICMAI. India, UAE and Singapore are run as a single corridor practice rather than three unconnected offices.
Four inputs settle the entry route in most cases: the sector, the parent jurisdiction, the expected first-year headcount, and whether profits are intended to stay in India or come back out. For an AI or software group, add whether the India team will create IP the group needs to own.
Case Studies
A Series B SaaS company ran eleven engineers in Bengaluru through an employer of record for two years. The trigger to incorporate was not cost. It was a diligence question during a funding round about who owned the code. Migration covered incorporation, novation of employment, a fresh IP assignment executed by every transferring employee, and a transfer pricing policy for the cost-plus arrangement.
A European industrial group planned a March incorporation to align with the parent year end. Because the Indian financial year closes on 31 March, the proportionate residency requirement for the stub period would have fallen due within weeks of the certificate being issued, and the nominated director had not been in India that year. Moving to April reset the clock at no cost.
A UK group discovered during a trade sale that two FC-GPR filings from its Indian subsidiary's early years had never been made. The amounts were small. The buyer would not close on an entity with an open FEMA position. Regularisation took six weeks and held up completion.
Meet The Team
The people who will actually run your India entry, end to end.
Director - Compliance
Senior Associate - Corporate Services
Senior Associate - Corporate Services
Director - Strategy & Operations
Director - Strategic Partnerships & Business Development
Director - Strategic Partnerships & Business Development
Get Started
Bring the sector, the parent jurisdiction, the expected first-year headcount and whether profits will stay in India. Those four inputs settle the entry route in most cases, and the call is where the timeline and the cost range stop being generic.
Response within one working day. Initial structuring view at no cost.
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