Challenges of Doing Business in India: A Guide for Foreign Companies
Table of Contents:-
India offers substantial opportunities for foreign companies because of its large domestic market, skilled workforce, expanding digital economy, manufacturing base and growing demand across consumer and industrial sectors.
At the same time, doing business in India can be complex, particularly for an overseas company entering the market for the first time.
The principal challenges are generally not about whether business can be done successfully in India. Instead, they arise from navigating India’s:
- Foreign investment regulations
- Central and State-level approvals
- Tax and GST framework
- Employment regulations
- Product-specific licences
- Import and customs procedures
- Contracting practices
- Transfer pricing requirements
- State-wise differences
- Cultural and commercial practices
Foreign companies that understand these issues before entering India can substantially reduce implementation delays and compliance risks.
Businesses planning their India expansion may begin with our India Market Entry Consulting Services or our detailed guide on Business Setup in India.
Is It Difficult for a Foreign Company to Do Business in India?
India has implemented significant reforms aimed at simplifying company incorporation, foreign investment, business approvals, insolvency and digital regulatory filings.
For example:
- Company incorporation is largely electronic.
- SPICe+ integrates several incorporation-related services.
- Foreign investment of up to 100% is permitted under the Automatic Route in many sectors.
- A National Single Window System has been created for identifying and applying for many Central and State approvals.
- GST has created a nationwide indirect-tax framework.
- Corporate, tax and FEMA reporting has increasingly moved online.
However, India remains a federal and highly regulated economy.
The regulatory requirements applicable to a business can depend upon:
- Industry
- Business activity
- State
- Location
- Foreign shareholding
- Products
- Number of employees
- Factory or office setup
- Imports
- Environmental impact
- Customer profile
- Transaction structure
The real challenge for a foreign investor is therefore not simply incorporating a company—it is identifying and coordinating all regulatory, tax and operational requirements relevant to the proposed Indian business.
Key Challenges of Doing Business in India at a Glance
| Challenge | Why It Matters to Foreign Companies |
|---|---|
| Choosing the correct entry structure | Subsidiary, JV, Branch Office, Liaison Office and distributor models have different legal and tax consequences |
| Understanding FDI regulations | Sectoral caps, entry routes and ownership conditions may apply |
| Central and State approvals | Requirements can vary according to industry and location |
| Taxation | Corporate tax, withholding, international tax and transfer pricing require planning |
| GST | Registration, invoicing, place-of-supply and return requirements depend on transactions |
| Labour compliance | Employment, wages, social security and workplace rules require ongoing compliance |
| Import and product regulation | Customs, BIS, FSSAI and other product approvals may apply |
| Land and premises | State and local regulations can affect property, factories and commercial premises |
| Contracts | Indian legal and commercial considerations should be built into agreements |
| State-wise differences | Regulations and incentives can vary significantly |
| Cultural differences | Negotiations and business relationships may work differently from other markets |
| Ongoing compliance | ROC, FEMA, tax, GST and payroll compliance continue after incorporation |
Choosing the Right India Entry Structure
One of the first challenges facing a foreign company is selecting the correct legal and commercial structure.
Foreign businesses can enter India through several routes, including:
- Wholly Owned Subsidiary
- Joint Venture
- Branch Office
- Liaison Office
- Project Office
- Distributor or importer arrangement
Each structure has different consequences relating to:
- Ownership
- Control
- Permitted activities
- Taxation
- Liability
- FEMA
- Repatriation
- Compliance
- Exit
A foreign company that simply wants to test demand may not immediately require an Indian company and may initially use a distributor.
On the other hand, a company planning employees, local contracts, revenue generation and long-term operations may prefer a Wholly Owned Subsidiary in India.
Foreign businesses should therefore compare the available structures before incorporation rather than selecting one solely because it appears easier to establish.
For a broader comparison, see our Business Setup in India guide.
Understanding India’s FDI Regulations
Foreign Direct Investment is permitted relatively freely in many Indian sectors.
The Department for Promotion of Industry and Internal Trade states that up to 100% FDI is permitted under the Automatic Route in most sectors, although strategically important and regulated sectors may have separate caps or conditions.
Foreign investors must nevertheless determine:
- Whether foreign investment is permitted in the proposed activity
- Maximum foreign ownership permitted
- Automatic Route or Government Route
- Applicable sectoral conditions
- Investor-country restrictions
- Beneficial ownership requirements
- Pricing requirements
- Reporting requirements
- Downstream investment implications
The applicable framework can be reviewed through the DPIIT Foreign Direct Investment Policy.
Foreign companies should undertake this analysis before incorporating and remitting capital into India.
Our detailed guide on Foreign Investment in a Wholly Owned Subsidiary in India explains several of these issues separately.
Identifying Central and State-Level Approvals
India operates through both Central and State Governments.
Accordingly, incorporation of a company does not necessarily mean that the business is ready to commence operations.
Depending upon the activity, additional approvals may be required from:
- Central Government departments
- State Governments
- Municipal authorities
- Labour departments
- Pollution Control Boards
- Fire authorities
- Industry-specific regulators
- Food regulators
- Standards authorities
- Local authorities
India has introduced the National Single Window System (NSWS) to help investors identify and apply for many required business approvals.
The official National Single Window System includes a Know Your Approvals facility and integrates approvals from multiple Central departments and State Governments.
However, the NSWS itself advises businesses to check relevant Government portals for other approvals that may be required.
Accordingly, regulatory mapping should be undertaken according to the actual business activity and location.
Selecting the Right State and City
India is a single country but commercially operates like a collection of large regional markets.
Different States can vary significantly in terms of:
- Industrial policy
- Incentives
- Land availability
- Labour availability
- Electricity costs
- Logistics
- Infrastructure
- State taxes and duties
- Local approvals
- Industrial clusters
- Customer proximity
- Ports
- Supplier ecosystem
- Real-estate cost
For example, the ideal location for:
- An IT services company
- An automobile manufacturer
- A pharmaceutical plant
- An electronics company
- A logistics centre
- A consumer-products company
may be completely different.
Foreign investors should therefore avoid selecting a location simply because a business contact or adviser is based in that city.
A structured location analysis should consider customers, suppliers, talent, infrastructure, incentives, logistics and regulatory requirements.
Company Incorporation Is Easier, But Planning Is Still Important
The company incorporation process has become increasingly digital.
The Ministry of Corporate Affairs uses the integrated SPICe+ incorporation process, which combines several registrations and services.
The official MCA SPICe+ guidance explains the incorporation framework.
However, practical issues can still arise for foreign promoters, including:
- Selecting the correct business objects
- Name approval
- Apostille or notarisation of overseas documents
- Digital signatures
- Foreign director documentation
- Registered office evidence
- Identifying the correct initial capital
- Opening the Indian bank account
- Receiving foreign investment
- FEMA reporting
Accordingly, incorporation should be planned together with the investment and operational structure rather than handled as an isolated legal filing.
Foreign investors can review our Foreign Company Registration in India services.
Opening and Operating an Indian Bank Account
Banking is another area where foreign-owned companies should allow adequate implementation time.
Indian banks undertake detailed Know Your Customer and beneficial ownership procedures.
A foreign-owned company may need to provide:
- Incorporation documents
- PAN
- Director identification
- Foreign parent documents
- Beneficial ownership details
- Group ownership structure
- Board resolutions
- Registered-office evidence
- Business information
- Source and purpose of funds
Once the bank account is operational, foreign-investment remittances must also be coordinated with the bank for FEMA documentation and regulatory reporting.
Foreign companies should therefore incorporate banking timelines into their market-entry schedule.
FEMA and RBI Compliance After Receiving Foreign Investment
Receiving capital from the foreign parent creates additional FEMA obligations.
Important matters can include:
- Permitted investment instrument
- Share valuation
- Remittance documentation
- Issue of shares
- FC-GPR reporting
- Annual Foreign Liabilities and Assets reporting
- Transfer of shares
- Downstream investment
- Repatriation
Accordingly, foreign investment should not be treated simply as an overseas bank transfer.
The applicable rules can be reviewed under the RBI Foreign Investment framework.
Our Wholly Owned Subsidiary in India page also explains the structure from a market-entry perspective.
Understanding India’s Tax System
India has a comprehensive tax system covering domestic as well as international transactions.
From 1 April 2026, the Income-tax Act, 2025 is in force.
Foreign-owned businesses may need to consider:
- Corporate income tax
- Withholding tax
- Advance tax
- Tax deduction at source
- International taxation
- Permanent Establishment
- Transfer pricing
- Tax treaties
- Capital gains
- Repatriation of profits
- Taxation of expatriates
The current legislation can be accessed from the Income Tax Department – Income-tax Act, 2025.
Foreign companies should therefore determine their tax and transaction model at the outset rather than only at the year-end tax-return stage.
Our Tax & Regulatory Advisory Services in India can assist with the applicable framework.
Transfer Pricing Between the Indian Company and Foreign Parent
Foreign-owned Indian companies frequently undertake transactions with their overseas group entities.
Common transactions include:
- Management services
- Software development
- IT-enabled services
- Technical services
- Royalty
- Licence fees
- Cost reimbursements
- Purchase and sale of products
- Import of machinery
- Loans
- Guarantees
- Shared-service arrangements
Such transactions may fall under India’s transfer pricing framework and should be conducted on an arm’s-length basis.
Foreign groups should establish:
- Appropriate intercompany agreements
- Clear functional responsibilities
- Pricing methodology
- Supporting documentation
- Transfer pricing policy
before significant intercompany transactions commence.
This becomes particularly important where the Indian entity operates as a captive service provider to its overseas parent.
GST Compliance
The Goods and Services Tax is India’s principal indirect-tax system.
However, businesses should not assume that GST compliance is identical for every company.
The requirements depend upon matters such as:
- Turnover
- Nature of supplies
- State of operation
- Interstate supplies
- Import/export transactions
- E-commerce activities
- Place of supply
- Reverse charge
- Input tax credit
- E-invoicing requirements
- Type and periodicity of returns
GST registration and returns are managed electronically through the Official GST Portal.
A foreign company should map its expected transaction flows before operations commence so that:
- Invoice format
- GST treatment
- Place of supply
- Input tax credit
- Vendor compliance
- Export documentation
are designed correctly from the outset.
The old assumption that every business must file a fixed number such as “33 GST returns annually” should not be used; filing requirements depend upon the taxpayer and applicable return framework.
Employment and Labour Compliance
India has undergone a significant restructuring of its labour-law framework through four major Labour Codes covering:
- Wages
- Industrial relations
- Social security
- Occupational safety, health and working conditions
Foreign employers need to examine both Central and applicable State requirements.
Depending upon the organisation, employee base and industry, matters can include:
- Employment contracts
- Wages
- Working hours
- Leave
- Social security
- Provident Fund
- ESI
- Gratuity
- Bonus
- Workplace safety
- Termination
- Industrial relations
- Registers and records
The current regulatory framework and rules can be reviewed on the Ministry of Labour & Employment – Labour Codes.
Foreign businesses should obtain local advice before adopting employment templates designed for another country.
Recruiting and Retaining the Right Employees
India has a large talent pool, but recruitment conditions vary significantly between industries and cities.
Some sectors face intense competition for employees with specialised expertise.
Foreign businesses should evaluate:
- Market salary levels
- Employee benefits
- Notice periods
- Variable compensation
- Retention strategy
- Local management requirements
- Recruitment channels
- Payroll compliance
- Employment documentation
The Indian employment market can vary significantly between cities such as Delhi NCR, Mumbai, Bengaluru, Hyderabad, Chennai, Pune and other industrial centres.
Businesses should therefore prepare a realistic hiring and payroll plan as part of their India-entry strategy.
Product-Specific Licences and Certifications
Another common challenge is assuming that company registration and GST registration are sufficient to sell products in India.
Depending upon the product, additional registrations may be required.
Examples include:
- BIS certification
- FSSAI registration
- Medical-device approvals
- Drug and cosmetic licences
- Legal Metrology compliance
- Telecom approvals
- Electronics approvals
- Environmental approvals
- Import licences
- Packaging and labelling requirements
The applicable approvals should be checked before importing or commercially launching products in India.
Our Business Registrations & Licences in India service helps foreign businesses identify applicable registrations.
The National Single Window System can also assist businesses in identifying several Central and State-level approvals.
Imports, Customs and Cross-Border Trade
Foreign companies importing products, components, machinery or raw materials into India need to understand India’s customs framework.
Important considerations may include:
- Importer Exporter Code
- Customs classification
- Customs valuation
- Basic Customs Duty
- Integrated GST on imports
- Free Trade Agreements
- Rules of origin
- Product restrictions
- BIS requirements
- Import licences
- Related-party valuation
- Warehousing
- Documentation
A mistake in product classification or valuation can affect both cost and customs compliance.
Import planning should therefore form part of the commercial pricing exercise rather than being addressed only after the goods reach an Indian port.
Protecting Intellectual Property
Foreign companies entering India should consider intellectual property protection at an early stage.
Relevant rights can include:
- Trademarks
- Patents
- Copyright
- Designs
- Software
- Domain names
- Trade secrets
- Proprietary technology
Brand owners should consider whether Indian trademark registrations should be obtained before:
- Appointing distributors
- Sharing product information
- Entering manufacturing arrangements
- Launching websites
- Marketing products
The Department for Promotion of Industry and Internal Trade administers several areas relating to intellectual property policy.
Commercial agreements should also contain appropriate confidentiality and intellectual property provisions.
Finding the Right Distributor or Business Partner
For companies that do not want to establish their own operation immediately, appointing a distributor can be an effective route.
However, identifying the right Indian partner can itself be challenging.
Foreign companies should evaluate:
- Financial strength
- Customer network
- Geographic reach
- Product experience
- Existing competing brands
- Warehousing
- Sales team
- Reputation
- Payment history
- Technical capability
- After-sales support
A distributor should not be appointed solely because it promises aggressive sales targets.
Appropriate due diligence and a carefully structured agreement are important.
Our Distributor Appointment Services in India guide explains this route in detail.
Understanding Indian Business Culture
India is geographically and culturally diverse.
Business practices can differ from one industry and region to another.
Foreign companies frequently find that successful business development requires:
- Building relationships
- Regular personal interaction
- Understanding local decision-making
- Allowing adequate negotiation time
- Following up consistently
- Understanding organisational hierarchy
- Adapting global strategies to Indian conditions
At the same time, multinational companies should maintain clear internal controls relating to:
- Procurement
- Discounts
- Commissions
- Agents
- Vendors
- Expense approvals
- Anti-bribery policies
A successful India strategy usually combines local commercial understanding with strong global governance.
Contract Negotiation and Enforcement
Contracts should be drafted specifically for Indian operations rather than simply copying a foreign-group agreement.
Important considerations can include:
- Governing law
- Jurisdiction
- Arbitration
- Payment terms
- Credit period
- Taxes
- GST
- Withholding tax
- Intellectual property
- Confidentiality
- Indemnity
- Limitation of liability
- Termination
- Dispute resolution
Dispute resolution in India has undergone several reforms, including the Commercial Courts framework, arbitration reforms and the Insolvency and Bankruptcy Code.
Nevertheless, businesses should continue to emphasise good contracting, counterparty due diligence and preventive controls, because resolving a dispute after it arises can consume significant management time and expense.
Credit and Payment Risk
India is a large market, but foreign companies should establish clear credit policies.
Before extending substantial credit to customers or distributors, businesses should consider:
- Financial statements
- Credit history
- Payment track record
- Market reputation
- Customer concentration
- Security or guarantees
- Credit limits
- Payment milestones
Foreign businesses should avoid assuming that a large sales pipeline automatically means strong cash flow.
Working-capital requirements should be incorporated into the India business plan from the beginning.
Compliance Continues After Incorporation
A common misconception is that the majority of regulatory work is completed once the company is incorporated.
In reality, an Indian company may have ongoing obligations under:
- Companies Act
- FEMA
- Income-tax law
- GST
- Transfer pricing
- Labour regulations
- Payroll
- Industry-specific laws
Typical recurring matters can include:
- Accounting
- Financial statements
- Statutory audit
- Board meetings
- Annual General Meeting
- ROC annual filings
- Income-tax return
- Transfer pricing reporting
- TDS
- GST returns
- Payroll
- FLA Return
- Other sector-specific filings
Foreign businesses without a large internal finance team may therefore prefer to outsource some of these functions.
Our Managed Business Services in India cover accounting, payroll and related ongoing business support.
Managing Multiple Advisers and Authorities
India market entry frequently involves interaction with:
- Chartered Accountants
- Company Secretaries
- Lawyers
- Banks
- Valuers
- Tax advisers
- Customs consultants
- State authorities
- Industry regulators
- Payroll providers
Without coordination, a foreign company can receive fragmented advice where one adviser considers company law while another examines FEMA and a third looks only at taxation.
An integrated market-entry plan should consider the regulatory and commercial consequences together.
This is particularly important for transactions such as:
- Initial foreign investment
- Intercompany agreements
- Employee secondments
- Royalty arrangements
- Share transfers
- Additional capital
- Loans
- Repatriation
- Restructuring
State-Level Differences Matter
Businesses entering India should not assume that all operating requirements are uniform nationally.
While laws such as the Companies Act and central income-tax legislation apply nationally, several practical matters can be State or local in nature.
Examples include:
- Shops and Establishments requirements
- Professional Tax
- Stamp duty
- Land-related approvals
- Factory approvals
- Electricity
- Local trade licences
- State incentives
- Labour administration
This is particularly important for manufacturing businesses and companies operating in multiple States.
The Government’s Business Reform Action Plan (BRAP) has been used to encourage States and Union Territories to simplify the regulatory environment and improve digital approvals.
Manufacturing Setup Can Be More Complex Than a Service Business
A foreign services company may be able to commence operations mainly through:
- Company incorporation
- Office lease
- Bank account
- GST
- Payroll
- Employee setup
A manufacturing business can require substantially more planning.
Additional issues can include:
- Land
- Factory building
- Electricity
- Pollution-control approvals
- Factory registration
- Environmental approvals
- Machinery imports
- Industrial licences
- Product certification
- Fire approval
- Labour compliance
- Local incentives
Foreign manufacturers should therefore prepare a detailed pre-establishment and pre-operation approval matrix before committing to a site.
Repatriating Profits and Funds From India
Foreign companies generally enter India with the expectation that profits can ultimately be repatriated to the parent company.
Depending upon the structure, funds may potentially be repatriated through legitimate mechanisms such as:
- Dividends
- Service fees
- Royalty
- Interest
- Sale proceeds
- Capital reduction
- Exit proceeds
However, such payments may involve:
- FEMA requirements
- Withholding tax
- Transfer pricing
- Income-tax provisions
- Tax treaty analysis
- Documentation
- Banking procedures
The repatriation model should therefore be considered before the Indian structure is established, not only after profits accumulate.
Exit Planning Is Often Ignored
Businesses normally focus on market entry rather than exit.
However, foreign companies should also consider:
- Sale of shares
- Buyback
- Capital reduction
- Merger
- Liquidation
- Strike-off
- Closure of Branch/Liaison Office
Each route can have different tax, FEMA and Companies Act consequences.
A well-designed India-entry structure should therefore remain workable if the foreign investor later restructures or exits.
Foreign companies operating through a subsidiary may review our guide on How to Close a Subsidiary Company in India.
For Branch Offices, see Closure of Branch Office in India.
Has Doing Business in India Become Easier?
Yes, there have been substantial reforms.
Examples include:
- Digital company incorporation
- Liberalisation of FDI in many sectors
- GST
- National Single Window System
- Online tax and corporate filings
- Digital banking and payments
- Insolvency reforms
- Increased electronic regulatory interaction
- State-level Business Reform Action Plans
DPIIT’s business-reform programme continues to focus on simplifying regulatory procedures and improving business approvals across States and Union Territories.
However, foreign companies should distinguish between digitisation and elimination of compliance.
Many procedures are now online, but the underlying legal requirements still need to be correctly understood and completed.
A Note on India’s Old Ease of Doing Business Ranking
Older articles frequently refer to India’s position in the World Bank’s Ease of Doing Business ranking.
Foreign investors should be aware that the World Bank discontinued the Doing Business report in September 2021.
Accordingly, old statements that India is currently ranked at a particular position in the Ease of Doing Business index should not be treated as a present-day ranking.
The World Bank’s official announcement can be reviewed here:
World Bank – Discontinuation of Doing Business Report
India now pursues several domestic business-reform initiatives, including the Business Reform Action Plan and National Single Window System.
How Foreign Companies Can Reduce India Market Entry Risk
The challenges of doing business in India can be managed through structured planning.
Before entering India, a foreign business should ideally undertake the following steps:
- Define the India business model.
- Analyse market potential.
- Determine the appropriate entry structure.
- Check FDI eligibility.
- Review beneficial ownership.
- Select the appropriate State and location.
- Identify Central and State approvals.
- Prepare a tax and transfer pricing model.
- Determine the funding structure.
- Plan banking and FEMA compliance.
- Review employment requirements.
- Identify product-specific licences.
- Understand GST and customs implications.
- Protect intellectual property.
- Prepare Indian contracts.
- Establish internal financial controls.
- Create an annual compliance calendar.
- Consider repatriation and exit strategy.
Addressing these issues before investment can substantially reduce delays after incorporation.
Distributor, Subsidiary, Joint Venture or Branch Office?
Different market-entry structures are suitable for different commercial objectives.
| Business Objective | Possible Entry Route |
| Test the Indian market with lower investment | Distributor |
| Long-term operation with control | Wholly Owned Subsidiary |
| Enter with an Indian strategic partner | Joint Venture |
| Undertake specified activities as foreign-company extension | Branch Office |
| Representative/non-commercial presence | Liaison Office |
| Execute an eligible specific project | Project Office |
Foreign investors should evaluate the alternatives according to:
- Control required
- Investment
- Taxation
- Revenue model
- Employees
- Regulatory requirements
- Long-term strategy
For more detail, review our India Market Entry Consulting Services.
Why India Still Offers Significant Opportunities
The existence of regulatory challenges does not reduce India’s importance as a major market.
Foreign businesses continue to evaluate India because of its:
- Large consumer market
- Expanding middle-income population
- Digital adoption
- Manufacturing ecosystem
- Skilled workforce
- Technology capabilities
- Startup ecosystem
- Infrastructure investment
- Industrial clusters
- Increasing integration into global supply chains
The key is therefore not to ask simply:
“Is India easy or difficult?”
A more useful question is:
“How should our company structure, plan and execute its India entry so that regulatory complexity does not delay commercial growth?”
That is where proper pre-entry planning creates the greatest value.
How EzyBiz India Can Assist Foreign Companies
EzyBiz India Consulting LLP assists overseas businesses throughout their India market-entry lifecycle.
Our assistance may include:
- India market-entry strategy
- Entity-structure selection
- FDI and FEMA advisory
- Wholly Owned Subsidiary registration
- Joint Venture structuring
- Branch Office registration
- Liaison Office registration
- Project Office registration
- Distributor appointment advisory
- Business licences and registrations
- Tax structuring
- International taxation
- Transfer pricing
- GST
- Accounting and bookkeeping
- Payroll
- ROC compliance
- RBI/FEMA reporting
- Corporate finance
- Restructuring and exit advisory
Our objective is to help foreign companies address regulatory, tax and operational issues in a coordinated manner rather than dealing with each requirement only after it becomes a problem.
Frequently Asked Questions
What are the main challenges of doing business in India?
The principal challenges can include selecting the correct entry structure, understanding FDI rules, obtaining Central and State approvals, taxation, GST, employment compliance, product licences, customs, contracts and ongoing regulatory compliance.
The importance of each challenge depends upon the business model and industry.
Is it difficult for a foreign company to start a business in India?
Company incorporation itself has become increasingly digital and streamlined.
However, foreign companies must also consider FDI, FEMA, banking, taxation, licences and operational approvals. Therefore, proper pre-entry planning remains important.
Can a foreign company own 100% of an Indian company?
Yes, 100% foreign ownership is permitted under the Automatic Route in many sectors.
However, the applicable sectoral cap, entry route and other FDI conditions should be checked before making the investment.
What is the best business structure for a foreign company in India?
There is no single structure suitable for every business.
A foreign company may consider:
- Wholly Owned Subsidiary
- Joint Venture
- Branch Office
- Liaison Office
- Project Office
- Distributor model
The correct structure depends upon the proposed activities, ownership requirements, tax considerations and long-term objectives.
Is India’s Ease of Doing Business ranking still published?
No.
The World Bank discontinued its Doing Business report in September 2021.
Accordingly, old articles citing India’s historical Ease of Doing Business ranking should not present that number as a current ranking.
Does India have a single window for business approvals?
India operates the National Single Window System, which helps businesses identify and apply for many Central and State approvals.
However, not every approval is necessarily available through the platform, so industry and location-specific review remains necessary.
Is GST compliance difficult in India?
GST is largely administered electronically, but the compliance requirements depend upon the taxpayer’s activities, turnover, locations and transaction structure.
Businesses should correctly design invoicing, place-of-supply, input-tax-credit and return processes from the beginning.
How many GST returns does a company need to file?
There is no universal number applicable to every business.
The filing frequency and forms depend upon the taxpayer category, turnover and applicable GST scheme.
Therefore, statements that every company must file a fixed number such as 33 GST returns annually are not accurate as a general rule.
Are India’s labour laws different from other countries?
Yes.
India has its own employment and labour regulatory framework, including the four major Labour Codes and applicable Central and State rules.
Foreign companies should use India-specific employment contracts and payroll/compliance processes.
Is transfer pricing applicable to a foreign-owned Indian subsidiary?
International transactions between an Indian entity and its foreign associated enterprises may fall within India’s transfer pricing framework.
Arm’s-length pricing and appropriate documentation may therefore be required.
Does a foreign company need local licences after incorporation?
Possibly.
Depending upon its business, additional registrations may include GST, Shops and Establishments, factory approvals, environmental permissions, BIS, FSSAI, Legal Metrology, import registrations and industry-specific licences.
Which Indian city is best for a foreign company?
The best location depends upon the business.
Technology companies, manufacturers, consumer businesses and logistics companies may have very different location requirements.
A proper comparison should consider customers, suppliers, employees, infrastructure, logistics, incentives and costs.
Should a foreign company appoint a distributor before establishing a subsidiary?
For some businesses, yes.
A distributor model can allow a foreign company to test Indian demand with comparatively lower investment before establishing a permanent operation.
For other businesses requiring employees, direct contracting and operational control, a subsidiary may be preferable from the outset.
Can profits be repatriated from India?
Yes, subject to applicable corporate, FEMA and tax requirements.
Depending upon the transaction, funds may potentially be repatriated through dividends, eligible service or royalty payments, interest or exit proceeds.
Can EzyBiz India manage ongoing compliance after company incorporation?
Yes.
In addition to India market-entry and incorporation assistance, EzyBiz India provides support relating to accounting, payroll, tax, GST, transfer pricing, FEMA and corporate compliance.
Related India Market Entry Services
Strategic, regulatory and implementation assistance for overseas businesses entering and expanding in India.
End-to-end assistance in evaluating and implementing the appropriate India business structure.
Wholly Owned Subsidiary in India
Company incorporation, FDI, FEMA and ongoing regulatory assistance for foreign-owned Indian subsidiaries.
Joint Venture Registration in India
Structuring and implementation assistance for overseas companies partnering with Indian businesses.
RBI/FEMA, ROC and tax assistance for foreign companies establishing a permitted Branch Office.
Registration and compliance support for foreign businesses requiring a representative presence in India.
Setup and compliance assistance for eligible project-specific operations in India.
Distributor Appointment Services in India
Advisory support for overseas businesses entering India through distributors and channel partners.
Business Registrations & Licences in India
Assistance in identifying and obtaining licences and registrations applicable to Indian operations.
Tax & Regulatory Advisory Services in India
Income tax, international tax, GST, FEMA and regulatory advisory for Indian and foreign businesses.
Official Regulatory & Business Resources
Department for Promotion of Industry and Internal Trade – FDI Policy
DPIIT Foreign Direct Investment Policy
Reserve Bank of India – Foreign Investment Framework
RBI Foreign Investment Master Direction
National Single Window System
NSWS – Business Approvals in India
Ministry of Corporate Affairs – SPICe+ Incorporation
MCA SPICe+ Guidance
Income Tax Department – Income-tax Act, 2025
Income-tax Act, 2025
Goods and Services Tax
GST Official Portal
Ministry of Labour & Employment – Labour Codes
Labour Codes
World Bank – Doing Business Report Discontinued
World Bank Statement
Get end-to-end assistance with India market entry strategy, entity setup, regulatory approvals and post-entry compliance.
Planning to Establish or Expand Your Business in India?
Related Services
- FDI & FEMA Advisory
- Distributor Appointment
- Business Licences & Registrations
- International Tax
- Transfer Pricing
- GST Advisory
- Accounting & Bookkeeping
- Payroll
- Corporate & ROC Compliance
Prepared by: EzyBiz India Consulting LLP – India Entry & Regulatory Team
Last Updated: August 2026
Disclaimer
This article is intended for general informational purposes only and does not constitute legal, tax, investment or regulatory advice. The requirements for doing business in India vary depending upon the investor, ownership structure, sector, business activity, location, products, workforce and transaction structure. Indian FDI, FEMA, tax, GST, labour and other regulatory requirements may change from time to time. Foreign businesses should obtain professional advice based on their specific circumstances before establishing or operating a business in India.
