Complete Guide for Foreign Entrepreneurs

How to Start a Businessin India as a Foreigner

Complete step-by-step guide on how to start a business in India as a foreigner. Learn about business structures, registration process, FDI policies, compliance requirements, and get expert assistance for your Indian business setup.

15-20 Days
Company Setup
100% FDI
Most Sectors
Expert
Guidance

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Step-by-Step Guide to Start Business in India

Follow these steps to successfully start your business in India as a foreigner

Step 1

Choose Business Structure

Decide on the right business structure: Private Limited Company (100% FDI), Branch Office, Liaison Office, or Joint Venture. Consider factors like control, liability, and compliance requirements.

Step 2

Check FDI Policy

Verify if your sector allows 100% FDI under automatic route or requires government approval. Most sectors allow 100% FDI without prior approval.

Step 3

Obtain Digital Signature Certificate (DSC)

Get DSC for all directors. This is required for filing documents with MCA. Foreign directors can obtain DSC from authorized agencies.

Step 4

Get Director Identification Number (DIN)

Apply for DIN for all directors. Foreign directors need to provide passport copy and address proof. DIN is mandatory for company directors.

Step 5

Reserve Company Name

File name reservation application with MCA. Choose a unique name that complies with naming guidelines. Name approval typically takes 1-2 days.

Step 6

Prepare Incorporation Documents

Prepare Memorandum of Association (MOA), Articles of Association (AOA), and other required documents. Get documents notarized and apostilled if required.

Step 7

File Incorporation Forms

File SPICe+ form (INC-32) with MCA along with required documents. This includes MOA, AOA, and other statutory declarations.

Step 8

Obtain Company Registration

Receive Certificate of Incorporation from ROC. This typically takes 7-10 working days after filing. Company is legally formed upon receiving this certificate.

Step 9

Apply for PAN and TAN

Apply for Permanent Account Number (PAN) and Tax Deduction Account Number (TAN). These are automatically issued during incorporation process.

Step 10

Open Bank Account

Open corporate bank account with an Indian bank. Provide incorporation certificate, PAN, and other KYC documents. Some banks may require physical presence.

Step 11

Register for GST

Register for Goods and Services Tax (GST) if your business requires it. GST registration is mandatory for businesses with turnover above threshold.

Step 12

File FC-GPR with RBI

File Foreign Currency-Gross Provisional Return (FC-GPR) with RBI within 30 days of share issuance. This is mandatory for foreign investments.

Business Structures Available for Foreigners

Private Limited Company

100% foreign ownership allowed in most sectors. Separate legal entity with limited liability. Most popular choice for foreign investors.

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Branch Office

Extension of foreign company. Can engage in export/import, R&D, consultancy. Requires RBI approval. Not a separate legal entity.

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Liaison Office

Representative office for market research and promotion. Cannot conduct commercial activities. Requires RBI approval.

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Project Office

Temporary office for specific projects. Typically for infrastructure and construction. Can be closed after project completion.

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Limited Liability Partnership (LLP)

Hybrid structure combining partnership and company features. Suitable for professional services. Requires at least one Indian partner.

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Joint Venture

Partnership with Indian company. Can be structured as company or partnership. Allows local market knowledge and shared risk.

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Frequently Asked Questions

Can a foreigner start a business in India?

Yes, foreigners can start businesses in India through various structures including private limited companies (100% FDI in most sectors), branch offices, liaison offices, or joint ventures. The process depends on the business structure and sector.

What business structures are available for foreigners in India?

Foreigners can choose from: Private Limited Company (100% FDI allowed in most sectors), Public Limited Company, Limited Liability Partnership (LLP), Branch Office, Liaison Office, Project Office, or Joint Venture with Indian partners.

Do I need RBI approval to start a business in India?

For private limited companies, most sectors allow 100% FDI under the automatic route without prior RBI approval. However, branch offices, liaison offices, and project offices require RBI approval. Post-investment reporting to RBI is mandatory.

What documents are required to start a business in India as a foreigner?

Required documents include: Passport copy, address proof, parent company incorporation certificate (if applicable), board resolution, financial statements, KYC documents, and other documents as specified for the chosen business structure.

How long does it take to start a business in India?

A private limited company can be incorporated in 15-20 working days. Branch offices and liaison offices require RBI approval (4-6 weeks). The total time depends on document preparation, approvals, and bank account opening.

What is the minimum capital requirement for foreign companies?

There is no minimum capital requirement for private limited companies. However, the company must have a minimum paid-up capital of ₹1 lakh (though this need not be deposited upfront). The actual capital depends on business requirements.

Do I need an Indian resident director?

Yes, a private limited company in India requires at least one director who is a resident of India (stayed in India for at least 182 days in the previous calendar year). This is mandatory under the Companies Act, 2013.

What are the tax implications for foreign businesses in India?

Foreign subsidiaries are taxed as Indian companies (25-30% corporate tax). Branch offices are taxed at 40% plus surcharge. Companies must also comply with GST, TDS, and other tax obligations. DTAA benefits may apply based on the country of origin.

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