From India entry to India operations

A foreign company can establish an India presence through one of five structures:

• Wholly-Owned Subsidiary (WoS) — A separate Indian company in which 100% of the shares are held by the foreign parent. It is the most common structure for long-term operations. Treated as an Indian company for regulatory and tax purposes, it can enter contracts, acquire assets, raise funds, and access local markets. The parent's liability is limited to its investment.
• Limited Liability Partnership (LLP) — A partnership-corporate hybrid in which partners' liability is limited to their contribution. Foreign investment is permitted under the automatic route in sectors where 100% FDI is allowed without performance-linked conditions. An LLP carries a lighter compliance burden than a private company.
• Liaison Office (LO) — A communication channel between the foreign parent and Indian stakeholders. It cannot undertake commercial, trading, or industrial activity, or earn income in India, and is funded entirely through inward remittances. Setting one up requires prior RBI approval. The parent must show a profit track record for the preceding 3 financial years and a net worth of at least USD 50,000.
• Branch Office (BO) — An extension of the foreign parent permitted limited commercial activities: export/import of goods, professional and consultancy services, research in the parent's area of business, technical support, and acting as a buying or selling agent. Profits can be repatriated net of Indian taxes. Setting one up requires prior RBI approval. The parent must show a profit track record for the preceding 5 financial years and a net worth of at least USD 100,000.
• Project Office (PO) — A temporary establishment set up to execute a specific contract awarded by an Indian entity, operating only for the project's duration. It must be funded by inward remittance, a bilateral or multilateral financing agency, or a term loan from an Indian public financial institution or bank to the Indian contracting party. There is no profit or net-worth eligibility criteria.

The right structure depends on the intended scope of operations, duration of presence, sectoral fit, and the nature of activities to be undertaken in India.

The FDI framework is governed by the Foreign Exchange Management Act, 1999 (FEMA), read with the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019. Sectors fall into three categories:

• Prohibited sectors — FDI is not permitted in areas of strategic or security concern: lottery business, gambling and betting, chit funds, Nidhi companies, trading in Transferable Development Rights, real estate business or farm house construction, tobacco manufacturing, and activities reserved for the public sector such as atomic energy and railway operations.
• Automatic route — No prior government approval is required. The Indian company receiving the investment reports it to the RBI through the FIRMS portal, using the Single Master Form, within the prescribed timeline.
• Approval route — Prior approval is required from the relevant ministry or department before the investment is made. Most sectors permit 100% FDI under the automatic route, but some carry specific caps or conditions — multi-brand retail trading permits 51% FDI under the approval route, for instance — and sectors including defence, telecom, civil aviation, satellites, mining, private security, and print media carry specific entry conditions.

Investments connected to a country sharing a land border with India carry additional scrutiny. Since Press Note 2 of 2026, a non-controlling beneficial ownership of up to 10% from such an investor can proceed under the automatic route, subject to a DPIIT reporting requirement. Above that threshold, or wherever the investment carries control, government approval is required regardless of sector. Where approval is required:

• The application is filed online through the National Single Window System (NSWS), integrated with the Foreign Investment Facilitation Portal (FIFP).
• The DPIIT coordinates the review across the relevant ministries, including the RBI, the Ministry of External Affairs, and the Ministry of Home Affairs where security clearance applies.
• As per the Standard Operating Procedure issued by DPIIT on May 4, 2026, the indicative timeline for processing an FDI approval application is approximately 12 weeks from the date of filing. An additional period of 2 weeks is given to DPIIT for consideration of proposals that are proposed for rejection, or where the Competent Authority proposes additional conditions.
• Once approved, the investment is made and FC-GPR is filed with the RBI within 30 days of share allotment, after which the entity moves into its annual FEMA reporting cycle, including the Foreign Liabilities and Assets (FLA) Return.
• Where the investee company is yet to be incorporated at the time of approval, the applicant must submit the Certificate of Incorporation, along with the Memorandum and Articles of Association of the newly incorporated investee, to the Competent Authority within 60 days of the date of the approval letter.

Incorporating a Wholly-Owned Subsidiary is governed by the Companies Act, 2013, read with the Companies (Incorporation) Rules, 2014, across four steps:

1. Step 1 — Name reservation. The proposed name is reserved through SPICe+ Part A on the MCA portal. It must comply with naming guidelines, and once approved is reserved for 20 days.
2. Step 2 — Preparation of documents. The next step is to prepare the documents required for incorporation. These include the Memorandum of Association (MoA), the Articles of Association (AoA), the declaration by directors and subscribers (Form INC-9), the consent of directors (Form DIR-2), the KYC documents of directors and subscribers, proof of the registered office address in India not older than 2 months along with the No Objection Certificate from the owner of the premises, and the board resolution of the foreign parent authorising the subscription and investment.
   • All documents to be signed by the foreign entity or foreign individuals, along with the respective Certificate of Incorporation and KYC documents, must be notarised and apostilled or legalised at the place outside India where the document is being executed.
3. Step 3 — Filing. The incorporation application is filed through SPICe+ Part B on the MCA portal. SPICe+ is an integrated form that allows for multiple registrations through a single application. Alongside SPICe+ Part B, Form INC-9 (the declaration by subscribers and first directors regarding their eligibility and compliance under the Companies Act, 2013) and the AGILE-PRO form are filed as part of the same process. AGILE-PRO facilitates integrated registrations for GST (optional), the Employees' Provident Fund Organisation (EPFO), the Employees' State Insurance Corporation (ESIC), and Professional Tax (in applicable states). The forms must be digitally signed by a proposed director and a practising professional through their Digital Signature Certificates before submission.
4. Step 4 — Issuance of the Certificate of Incorporation. The Registrar of Companies reviews the application and the supporting documents. Once approved, the Registrar issues the Certificate of Incorporation, which contains the company name and registered office address, the Corporate Identification Number (CIN), the date of incorporation, the Permanent Account Number (PAN), the Tax Deduction Account Number (TAN), and the Director Identification Number (DIN) allotment letters for any directors who did not hold a DIN prior to incorporation. With the Certificate of Incorporation issued, the company is legally registered and can commence its business operations.

The standard process takes approximately 15 to 25 days from filing, depending on document accuracy, Registrar workload, and any sectoral approvals required.

Key requirements during incorporation:

• At least one director of the company must be a resident of India, meaning a person who has stayed in India for a minimum of 182 days in the financial year.
• Under the Companies Act, a private company must have a minimum of 2 shareholders. Since a Wholly-Owned Subsidiary is 100% owned by the foreign parent, this requirement is met by appointing a nominee shareholder under Section 187 of the Companies Act, supported by declarations on Form MGT-4 (filed by the nominee shareholder), Form MGT-5 (filed by the foreign parent as beneficial owner), and Form MGT-6 (filed by the company with the Registrar of Companies).
• Where the foreign investment falls under the approval route, government approval must be in place before incorporation can be completed.

A Wholly-Owned Subsidiary is subject to the same regulatory, financial, and governance norms as any Indian company, regardless of foreign ownership. The compliances fall into two clusters:

• One-time, post-incorporation — due within set windows after incorporation:
  • Subscription money received and business commencement confirmed on Form INC-20A (both within 180 days)
  • Share certificates issued (within 2 months)
  • FC-GPR filed for the foreign investment (within 30 days of allotment)
  • The first statutory auditor appointed on Form ADT-1 (within 30 days)
  • Beneficial-ownership declarations — Forms MGT-4/5/6 for the nominee arrangement, and Forms BEN-1/BEN-2 if a significant beneficial owner is triggered — filed within 30 days of the relevant trigger
• Ongoing, annual — recurring on a yearly cycle:
  • Corporate governance — At least 4 board meetings a year, no more than 120 days apart, and an AGM within 9 months of the first financial year-end (6 months for subsequent years, never later than 15 months after the previous AGM); annual financial statements must be audited before the AGM.
  • RoC filings — The audited financials (Form AOC-4, within 30 days of the AGM), the annual return (Form MGT-7, within 60 days), auditor appointment confirmation (Form ADT-1), directors' KYC (Form DIR-3 KYC, once every three consecutive financial years, by 30 June of the year immediately following the third year), the return of deposits (Form DPT-3, by 30 June), and — where applicable — share capital reconciliation (Form PAS-6) and MSME payment disclosures (Form MSME-1).
  • Tax — The annual Income Tax Return, due by 31 October, or 30 November where transfer pricing applies, under Section 139 of the Income-tax Act, 1961 (Section 263 of the Income-tax Act, 2025); a tax audit above the prescribed turnover thresholds under Section 44AB of the 1961 Act (Section 63 of the 2025 Act, with the audit report consolidated into Form No. 26 from Tax Year 2026-27); a transfer pricing audit under Section 92E of the 1961 Act (Section 172 of the 2025 Act) where the company has international transactions with non-resident associated enterprises — currently Form 3CEB, becoming Form No. 48 under the Income-tax Rules, 2026 from Tax Year 2026-27; quarterly TDS returns (Forms 24Q, 26Q, and 27Q, becoming Forms 138, 140, and 144); monthly or quarterly GST returns (GSTR-1, GSTR-3B, plus the annual GSTR-9 and reconciliation GSTR-9C where applicable); and Forms 15CA/15CB for foreign remittances (becoming Forms 145/146).
  • FEMA — The annual Return on Foreign Liabilities and Assets (FLA Return), due with the RBI by 15 July.
  • Other recurring items — Professional Tax renewals, Shops and Establishment registration renewal, EPF/ESI filings where employees are hired, the annual POSH compliance filing, and the annual update of the Importer Exporter Code by 30 June.

Given the volume, most foreign-owned subsidiaries engage a compliance advisor to run this calendar proactively rather than react to it deadline by deadline. The India Entry Series covers the full form-by-form detail.