Incorporation of Foreign Companies in India allows overseas businesses to establish a legal presence and tap into one of the world’s fastest-growing markets. India permits foreign entities to operate through multiple structures such as subsidiary companies, branch offices, liaison offices, and project offices, subject to compliance with Indian laws.
In this Saving Mantra guide, we explain what incorporation of foreign companies in India means and provide a step-by-step process, along with entry routes, approvals, documents, and ongoing compliance.
What is Incorporation of a Foreign Company in India?
Incorporation of a foreign company in India refers to the process by which a company incorporated outside India establishes a business presence in India under applicable laws such as the Companies Act, 2013, Foreign Exchange Management Act (FEMA), and RBI regulations.
Entry Options for Foreign Companies in India
1. Wholly Owned Subsidiary (WOS)
- Incorporated as a Private Limited Company
- 100% foreign ownership allowed in many sectors
- Separate legal entity in India
2. Joint Venture (JV)
- Partnership with an Indian company
- Shared ownership and control
3. Branch Office
- Can conduct permitted commercial activities
- Requires RBI approval
4. Liaison Office
- Limited to liaison and representation activities
- No income-generating activities allowed
5. Project Office
- Set up for execution of a specific project in India
Benefits of Incorporating a Foreign Company in India
- Access to large consumer and industrial markets
- Cost-effective skilled workforce
- Favorable government policies
- Growing startup and manufacturing ecosystem
- Strategic gateway to South Asian markets
Step-by-Step Process for Incorporation of Foreign Companies in India
Step 1: Select the Appropriate Entry Route
Choose between Subsidiary, JV, Branch Office, Liaison Office, or Project Office based on business objectives.
Step 2: Check FDI Policy & Sectoral Caps
Verify whether the proposed business activity is allowed under FDI policy and whether prior government approval is required.
Step 3: Obtain Digital Signature Certificate (DSC)
Authorized representatives and proposed directors must obtain DSC for online filings.
Step 4: Name Reservation (For Subsidiary/JV)
Apply for company name approval with the Registrar of Companies (ROC).
Step 5: Draft Charter Documents
Prepare MOA and AOA (for subsidiary) or required constitutional documents for branch/liaison office.
Step 6: File Incorporation / Registration Application
Submit incorporation or registration forms with the Ministry of Corporate Affairs (MCA) and, where applicable, RBI.
Step 7: RBI Approval (If Applicable)
For Branch, Liaison, and Project Offices, obtain RBI approval through an Authorized Dealer bank.
Step 8: Certificate of Incorporation / Registration
Upon approval, the Certificate of Incorporation or Registration is issued.
Step 9: Post-Incorporation Registrations
Complete mandatory registrations such as:
- PAN & TAN
- GST (if applicable)
- Bank account opening
- Shops & Establishment registration
Documents Required for Incorporation of Foreign Company
- Certificate of Incorporation of foreign company
- MOA & AOA / Charter documents
- Board resolution approving India entry
- Identity & address proof of directors
- Authorized representative details
- Power of Attorney
- Financial statements of foreign company
(Documents must be notarized and apostilled/consularized)
Post-Incorporation Compliance
- Annual ROC filings
- FEMA and RBI compliance
- Income Tax return filing
- Transfer pricing compliance (if applicable)
- Audit and statutory reporting
Taxation of Foreign Companies in India
- Corporate tax applicable as per structure
- Withholding tax on remittances
- GST applicability based on services/goods
- Transfer pricing regulations for related-party transactions
Why Choose Saving Mantra for Foreign Company Incorporation?
- Expert advisory on entry strategy and FDI compliance
- End-to-end incorporation and RBI liaison
- Accurate documentation and filings
- Transparent and affordable pricing
- Ongoing compliance and tax support
Conclusion
Incorporation of Foreign Companies in India offers immense growth opportunities when done with the right structure and compliance strategy. By following the correct step-by-step process for foreign company incorporation in India, overseas businesses can establish a strong, compliant, and scalable presence. Saving Mantra ensures a smooth, professional, and hassle-free India entry for foreign companies.
Disclaimer
The information provided in this blog is for general informational purposes only and does not constitute legal, tax, or professional advice. Laws relating to FDI, FEMA, RBI approvals, and company incorporation may change from time to time. Readers are advised to consult qualified professionals before incorporating or operating a foreign company in India.