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Entry In India

India, with 17% of the world's population and over half of its citizens under the age of 25, boasts the youngest demographic globally—making it a highly attractive destination for investors. Government initiatives such as “Make in India,” Digital India, Atmanirbhar Bharat Abhiyan (Self-Reliant India), and the Start-up India campaign have significantly enhanced the country's business environment, improving India's rankings in ease-of-doing-business indices and drawing in foreign capital.

We guide both resident and non-resident clients in choosing the optimal corporate structure to meet their objectives. From entity selection through post incorporation compliance, we serve as your one stop partner, committed to fostering a long term relationship and ensuring seamless operational support every step of the way.

Establishing a Presence in India as a Foreign Entity

Foreign investors seeking to operate in India can choose from three primary structures—liaison office, branch office, or project office—each tailored to specific activities and subject to prescribed limitations:

Liaison Office (LO)

Permitted Activities: Market research, coordination, and promotional liaison on behalf of the parent company
Revenue: May not generate income in India

Project Office (PO)

Permitted Activities: Overseeing and monitoring specific projects awarded by an Indian entity or government

Branch Office (BO)

Permitted Activities: Trading and, in certain cases, limited manufacturing operations

Timeline for Establishment and Registration

RBI Approval

After receiving RBI clearance for an LO, BO, or PO, the foreign company must open the office within six months.
If circumstances beyond the company's control delay opening, an AD Category I bank may grant a one time, six month extension. Any further extension requires prior RBI approval.

MCA Registration

Within 30 days of opening, the entity must register with India's Ministry of Corporate Affairs (MCA).

Additional Compliance

A local resident with a PAN must be appointed to receive official notices on behalf of the foreign entity.
For detailed RBI guidelines, refer to the official notification: RBI Notification “Establishment of LOs/BOs/POs” (ID: 10398).

This structured approach ensures your foreign entity remains compliant while maximizing operational effectiveness in the Indian market.

Liaison Office

Eligibility

The foreign parent company must have a net worth of at least USD 50,000 (or equivalent) and a record of profitability for each of the three most recent financial years.
Standard approval is granted for three years (two years for non-banking financial companies and entities in the construction sector).
If the financial thresholds aren't met, the parent may issue a Letter of Comfort (LoC), provided it fulfills the net-worth and profitability requirements.

Permitted Activities

Acting as the representative of the foreign company in India
Gathering market intelligence and exploring business opportunities
Promoting imports into or exports from India
Facilitating technical or financial collaborations

Prohibited Activities

Engaging in any revenue generating or commercial operations
Earning income within India

Taxation

Exempt from Indian income tax (no taxable income permitted)

Closure Procedure

Requires prior approval from both the Authorised Dealer (AD) bank and the Registrar of Companies (ROC) before winding up the liaison office.

Branch Office

Eligibility

The foreign parent company must have a net worth of at least USD 100,000 (or equivalent) and a consistent profit record over the five most recent financial years.
If these criteria are not met, the parent may furnish a Letter of Comfort (LoC), provided it meets the required net-worth and profitability standards.
The branch office must operate under the exact name of the parent company.

Permitted Activities

Conducting commercial transactions in India
Representing the foreign parent company
Importing and exporting goods
Providing professional services
Undertaking research and development activities
Repatriating profits after settling all applicable Indian taxes

Restricted Activities

Manufacturing is allowed only within a Special Economic Zone (SEZ) and solely for the purpose of exporting goods outside India.

Taxation

Subject to a base corporate tax of 40%, plus applicable surcharges.

Closure Procedure

Requires prior approval from both the Authorised Dealer (AD) bank and the Registrar of Companies (ROC) before winding up.

Project Office

Description

Eligibility

Reserve Bank has granted general permission to foreign companies to establish Project Office in India, provided they have secured a contract from an Indian company to execute a project in India, and

the project is funded directly by inward remittance from abroad; or
the project is funded by a bilateral or multilateral International Financing Agency; or
the project has been cleared by an appropriate authority; or
a company or entity in India awarding the contract has been granted Term Loan by a Public Financial Institution or a bank in India for the project.

However, if the above criteria are not met, the foreign entity has to approach the Reserve Bank of India, Central Office, for approval.

Tax: 40% + tax

Exit : Prior approval of AD bank and ROC authorities is required.

Domestic Entity Structures

Wholly Owned Subsidiary / Joint Venture

Wholly Owned Subsidiary: A foreign company may incorporate a 100% foreign owned subsidiary in sectors open to full foreign direct investment (FDI) under the automatic route (no prior government or RBI approval required).
Joint Venture: In sectors where 100% FDI isn't permitted automatically, a foreign investor may partner with an Indian entity. Such investments require government approval if outside the automatic route.

Private Limited Company

Share Transfer: Shareholder transfers are restricted.
Shareholder Cap: Maximum of 200 shareholders.
Public Invitation: Cannot invite the public to subscribe to shares or debentures.
Taxation: Taxed as a standard Indian company.

Public Limited Company

Shareholders: Minimum of 7.
Commencement: Requires a trading certificate post incorporation before beginning operations.
Prospectus: Must publish or file a statement in lieu of a prospectus before fundraising.
Directors: Minimum of 3 directors.
Statutory Meetings: Must hold and file minutes of required meetings; senior management appointments need government approval.
Taxation: Taxed as a standard Indian company.

Limited Liability Partnership (LLP) with FDI

Sector Restrictions: Permitted only in sectors allowing 100% FDI via the automatic route, with no performance linked conditions (e.g., minimum capital).
Downstream Investment: An Indian company with FDI may invest in an LLP only if both operate in fully open sectors. LLPs with FDI may not further invest in other LLPs or companies.
Taxation: Taxed under normal LLP provisions.