Business Setup Services in India for Foreign Companies

Planning to set up a business in India? Foreign companies and overseas investors need more than a Certificate of Incorporation to establish a successful Indian operation. They must select the appropriate business structure, satisfy foreign investment regulations, complete incorporation, arrange banking, bring in capital and establish the registrations and systems necessary to begin business.

EzyBiz India Consulting LLP provides end-to-end Business Setup Services in India for foreign companies, multinational groups, overseas entrepreneurs and international investors. Our Chartered Accountant-led team assists with business structure selection, company registration, Foreign Direct Investment (FDI), FEMA and RBI compliance, GST, corporate taxation, banking assistance, accounting, payroll, transfer pricing and post-incorporation compliance.

With over 20 years of professional experience, we help overseas management teams establish commercially workable and regulatory-compliant Indian business operations.

Whether you are establishing a wholly owned subsidiary, joint venture, branch office, liaison office, project office or other permitted Indian business structure, we can assist with the applicable setup process.

Discuss your India business setup requirements: Call +91 98992 17778, email anil@ezybizindia.in or contact our team on WhatsApp.

1. What Do Business Setup Services in India Include?

1.1 Business Setup Versus Company Incorporation

Company incorporation establishes a legal entity, but it does not necessarily make the business operational. Depending on its activities, an Indian company may also require a bank account, foreign capital infusion, GST registration, employment arrangements, sector licences, accounting systems and applicable FEMA reporting.

Business setup services therefore address the entire process from selecting a legal structure to preparing the business to enter into contracts, issue invoices, employ personnel and undertake permitted operations.

1.2 End-to-End Business Establishment Assistance

Our assistance can include evaluating the proposed business structure, identifying applicable regulations, preparing foreign documentation, coordinating incorporation, supporting banking KYC, assisting with capital contribution and implementing relevant registrations.

We can also support ongoing accounting, tax, corporate secretarial and regulatory compliance through separately agreed professional engagements.

1.3 Who Can Use Our Business Setup Services?

Our services are relevant to:

• Foreign companies establishing their first Indian subsidiary.
• Multinational groups expanding operations into India.
• Overseas investors establishing manufacturing or trading businesses.
• Technology, SaaS and professional-services companies.
• Businesses establishing captive delivery centres or Global Capability Centres.
• Foreign companies considering branch, liaison or project offices.
• International entrepreneurs establishing Indian businesses.

For broader commercial expansion planning, visit our principal India Market Entry Consulting Services page.

2. Why Foreign Companies Establish Businesses in India

2.1 Access to Customers, Talent and Commercial Opportunities

India offers opportunities across technology, manufacturing, consumer products, industrial goods, engineering, healthcare, professional services, logistics and other sectors.

Foreign companies may establish a local entity to serve Indian customers, employ personnel, develop products, manufacture goods, purchase materials or provide services to overseas group entities.

The Invest India platform provides information about India’s investment ecosystem and sector opportunities.

2.2 Domestic Operations and Global Service Delivery

An Indian subsidiary can operate as a domestic sales business, manufacturing facility, technology centre, back-office operation or shared-services business, subject to applicable law.

Businesses considering outsourced technology, accounting, engineering and service functions may review our Global Capability Centre Setup in India services.

3. Business Structures Available to Foreign Companies

3.1 Wholly Owned Subsidiary in India

A foreign company seeking long-term business operations and ownership control may establish an Indian subsidiary, subject to the applicable FDI policy and sectoral conditions.

A wholly owned subsidiary is a separate Indian legal entity that can undertake permitted commercial activities, employ staff, enter into contracts and maintain corporate bank accounts.

Explore our Wholly Owned Subsidiary in India services.

3.2 Joint Venture with an Indian Partner

A joint venture may be appropriate where an overseas investor requires an Indian strategic partner for distribution, market access, industry experience, licences or manufacturing capabilities.

The parties should evaluate partner due diligence, ownership, management rights, financing commitments, intellectual property, transfer restrictions, deadlock provisions and exit arrangements.

See our Joint Venture Registration in India services.

3.3 Limited Liability Partnership

An LLP may be considered for certain eligible businesses where foreign investment is permitted under the applicable FDI framework.

Foreign investment into an LLP is subject to specific eligibility conditions, including the applicable sectoral and approval framework. Tax treatment, profit distribution, management rights and future investment requirements should also be considered.

3.4 Branch Office in India

A branch office is an extension of the foreign company rather than a separately incorporated Indian company.

The permitted activities, eligibility criteria, approval requirements, funding arrangements, taxation and continuing compliance must be examined under the applicable FEMA and RBI framework.

Read our Branch Office Registration in India guide.

3.5 Liaison Office and Project Office

A liaison office may be used for permitted communication, representation and market-development activities, but it cannot ordinarily undertake revenue-generating business in India.

A project office may be established by an eligible foreign enterprise for the execution of a specific Indian project, subject to the applicable conditions.

Learn more about Liaison Office Setup and Project Office Setup in India.

4. Can a Foreign Company Do Business in India Without Incorporating?

4.1 Distributor, Importer and Commercial Partner Arrangements

Not every foreign company needs an Indian subsidiary immediately. Depending on the products, services and applicable laws, it may initially sell through independent distributors, importers, resellers or other commercial arrangements.

Such models should be evaluated for customs, GST, withholding tax, contractual liabilities, sector regulations and permanent establishment exposure.

4.2 Employer of Record and Remote Hiring Models

Some overseas businesses consider an Employer of Record or another employment arrangement to engage personnel in India before establishing a subsidiary.

However, use of a third-party employer does not automatically eliminate the foreign company’s Indian tax, employment or permanent establishment exposure. Employee functions, contract authority and the actual operating arrangement must be reviewed.

5. How to Choose the Right Business Structure in India

5.1 Comparison of Major Business Setup Options

The correct structure depends on the investor’s commercial purpose, activities, ownership requirements, tax considerations and expected operating model.

Business Structure	Separate Indian Legal Entity?	Commercial Activities	Typical Purpose
Wholly Owned Subsidiary	Yes	Permitted activities subject to law	Long-term controlled operations
Joint Venture Company	Yes	Permitted activities subject to law	Operations with strategic partners
Limited Liability Partnership	Yes	Subject to applicable law and FDI eligibility	Eligible service and other businesses
Branch Office	No	Restricted to permitted activities	Specified operations of foreign parent
Liaison Office	No	No ordinary revenue-generating operations	Representation and communication
Project Office	No	Eligible project-related activities	Execution of Indian projects

5.2 Ownership, Liability, Tax and Future Expansion

A wholly owned subsidiary may provide suitable ownership and operational flexibility, whereas a joint venture may offer access to an established Indian partner.

Branch and liaison offices have different regulatory and tax characteristics because they remain extensions of the overseas enterprise.

The structure must also be assessed for capital funding, profit repatriation, future investment, regulatory burden and eventual closure.

6. FDI, FEMA and RBI Requirements for India Business Setup

6.1 Automatic Route and Government Approval Route

India permits foreign direct investment under the automatic route in many sectors, subject to applicable conditions. Other sectors, investors or transactions may require government approval or be subject to ownership restrictions.

It is incorrect to assume that 100% foreign ownership is automatically permitted in every sector.

Refer to the Department for Promotion of Industry and Internal Trade for FDI policy announcements and the applicable implementing regulations.

6.2 Investor Country and Beneficial Ownership Restrictions

FDI eligibility may depend not only on the jurisdiction of the immediate shareholder but also on beneficial ownership, control arrangements, sector classification and investor-country restrictions.

Investments involving countries sharing a land border with India require careful review of the applicable investment restrictions and approval framework.

These matters should be evaluated before incorporation documents are finalised or funds are transferred.

6.3 Funding, Share Pricing and Regulatory Reporting

Foreign investments may involve compliance with eligible instruments, pricing guidelines, remittance requirements, share allotment procedures and reporting under FEMA.

Form FC-GPR, FC-TRS, FLA and other reporting requirements may apply depending on the relevant transactions and circumstances.

EzyBiz provides FEMA and RBI Advisory Services. Official directions can be accessed through the Reserve Bank of India.

7. Step-by-Step Process for Setting Up Business in India

7.1 Step 1 – Define the Proposed Indian Business

The first step is identifying the proposed business activities, products, services, customer base, revenue model, ownership, investment amount, employees and future expansion objectives.

This assessment helps determine whether a subsidiary, joint venture, office or another permitted arrangement is appropriate.

7.2 Step 2 – Choose the Business Structure and Investment Route

The proposed structure is reviewed for FDI eligibility, FEMA regulations, tax implications, liability and operational suitability.

At this stage, management should also consider the intended Indian state and city because location affects commercial, staffing and regulatory requirements.

7.3 Step 3 – Prepare Foreign Documents and Incorporate

Where an Indian company is to be incorporated, the required shareholder, director, registered-office and incorporation documents are prepared and authenticated as applicable.

The incorporation application is then filed under the relevant procedure administered by the Ministry of Corporate Affairs.

For detailed incorporation assistance, see our Company Registration Services in India.

7.4 Step 4 – Open Bank Account and Receive Capital

After incorporation, the Indian entity generally needs a corporate bank account. The foreign investor’s capital contribution, share allotment, banking documentation and applicable FEMA reporting must be coordinated within the required framework.

Bank account opening is subject to the financial institution’s KYC and approval procedures.

7.5 Step 5 – Complete Registrations and Commence Operations

Depending on the business, additional work may include GST registration, import-export registration, employer registrations, accounting systems, payroll, customer contracts, internal financial controls and industry licences.

The objective is to establish a business that is legally and operationally prepared to conduct its permitted activities.

For a practical implementation checklist, see our Business Setup in India Checklist.

8. Documents Required for Foreign Company Business Setup

8.1 Documents from the Foreign Corporate Shareholder

Depending on the investor and proposed structure, required documents may include:

• Certificate of incorporation of the overseas company.
• Constitutional or charter documents.
• Registered-office address details.
• Board resolution approving the India investment.
• Share subscription and authorised representative documents.
• Group shareholding and beneficial ownership information.
• Identity and other documents required for incorporation or banking.

8.2 Foreign Director and Individual Shareholder Documents

Foreign directors and individual shareholders may need passports, address evidence, photographs, identification details, email addresses and other information required under the applicable MCA and KYC procedures.

Indian companies must also satisfy the resident-director requirement under company law. The nationality of a director and the applicable residence test are distinct matters.

8.3 Notarisation, Apostille and Registered Office

Documents signed outside India may require notarisation, apostille or consular authentication according to the place of execution and applicable MCA rules.

An incorporated Indian company must also satisfy registered-office requirements. Supporting documents may include premises consent, lease documentation, utility evidence and other relevant information.

Foreign documentation should be checked before authentication to avoid unnecessary rework and delays.

9. Foreign Shareholders, Directors and Dematerialisation

9.1 Shareholding Structure and Resident Director

Foreign investors should decide the proposed Indian company’s shareholders, directors, authorised signatories and ultimate beneficial ownership before preparing incorporation documents.

An ordinary Indian private limited company generally requires at least two members. A wholly owned subsidiary may be structured with the intended foreign parent retaining the beneficial ownership, subject to appropriate nominee and legal arrangements and other applicable requirements.

The Indian company must comply with the resident-director requirement prescribed under Section 149(3) of the Companies Act, 2013.

9.2 Demat and ISIN Requirements

Dematerialisation requirements may apply to private companies under the Companies (Prospectus and Allotment of Securities) Rules, 2014, including Rule 9B, subject to applicable exemptions and implementation requirements.

Foreign-owned subsidiaries should examine their classification and eligibility for exemptions before concluding whether an ISIN and dematerialisation arrangements are mandatory.

The distinction between an Indian subsidiary of a foreign company and a company with foreign individual shareholders may affect the applicable compliance analysis, but no blanket exemption should be assumed.

10. Corporate Bank Account and Capital Infusion

10.1 Banking KYC for Overseas Shareholders

Indian banks may examine the Indian entity, overseas shareholder, group ownership chart, ultimate beneficial owners, directors, authorised signatories, business activity, source of funds and anticipated transactions.

Inconsistent documents and unclear shareholding arrangements can result in additional bank queries. Banking should therefore be planned during the incorporation stage.

10.2 Foreign Remittance, Allotment and FC-GPR

Foreign capital contributions should be received through permitted channels with appropriate transaction documentation.

Share allotment, statutory records, applicable pricing requirements and FEMA reporting must be coordinated. Delayed allotment or excess share application money may create additional compliance issues requiring separate review.

11. Business Setup Timeline and Cost in India

11.1 Indicative Timeline

There is no guaranteed timeline that applies to every foreign company. A straightforward Indian company incorporation may often be completed within approximately one to three weeks after complete and correctly authenticated documents are ready, subject to government processing and queries.

Activity	Principal Timing Consideration
Structure and FDI assessment	Scope of proposed activities and investor profile
Foreign documentation	Home-country notarisation and authentication process
Company incorporation	Document completeness, MCA processing and queries
Bank account	Beneficial ownership checks and bank KYC
Capital contribution and reporting	Banking, company law and FEMA requirements
GST and operational licences	Nature of business and applicable approvals

11.2 Cost of Business Setup Services in India

The cost of setting up business in India depends on the selected structure, capital, location, number of shareholders and directors, document authentication, professional assistance and statutory registrations.

Additional expenditure may include office arrangements, legal documentation, accounting systems, banking support, staffing, industry permissions and recurring regulatory compliance.

For a subsidiary-specific discussion, see our Cost of Setting Up a Wholly Owned Subsidiary in India guide.

11.3 What Commonly Delays Business Setup?

Frequent issues include incomplete foreign documents, incorrect apostille, unclear ownership, unavailable company names, inaccurate activity classification, banking queries and starting the process before the FDI requirements have been assessed.

Coordinating legal, banking, tax and operational workstreams can help minimise unnecessary delays.

12. Selecting the Right Location and Sector Licences

12.1 Delhi NCR, Bengaluru, Mumbai, Pune and Other Locations

The appropriate Indian location depends on customers, talent, infrastructure, supplier networks, transport, industry requirements, state incentives and operating costs.

For example, a technology services company may prioritise access to qualified personnel, while a manufacturing business may prioritise industrial infrastructure, suppliers and logistics.

State-specific stamp duty, professional tax, labour welfare, establishment registrations and other obligations should be assessed. No single Indian state is necessarily the most suitable for every company.

12.2 Manufacturing and Other Sector Approvals

Company incorporation does not automatically authorise every commercial activity. Depending on the sector, further licences or registrations may be necessary.

These may involve factories, environmental permissions, food, pharmaceuticals, telecommunications, product standards, imports or other regulated activities.

Foreign manufacturers can explore our Manufacturing Setup in India services and China Plus One Strategy guide.

13. Taxation, GST and Transfer Pricing

13.1 Corporate Income Tax and Withholding Tax

An Indian incorporated subsidiary is ordinarily taxed as an Indian company under the applicable income-tax provisions.

The business may also need to deduct tax on salaries, professional fees, rent, interest, royalties and certain other payments, including qualifying cross-border transactions.

Foreign groups should evaluate tax treaties, permanent establishment exposure, financing arrangements and withholding requirements. See our International Tax Advisory Services and the Income Tax Department.

13.2 GST Registration, Imports and Exports

GST registration is not mandatory merely because an Indian company has been incorporated. Applicability depends on the nature of supplies, relevant thresholds, location, compulsory registration provisions and other legal conditions.

Importers and exporters may also require an Import Export Code and compliance with applicable customs and trade regulations.

See our GST Registration Services, the GST Portal and the Directorate General of Foreign Trade.

13.3 Transfer Pricing and Profit Repatriation

Foreign-owned Indian companies may undertake transactions with overseas associated enterprises relating to goods, services, software, technology, royalties, loans and cost allocations.

These arrangements may require arm’s-length pricing, appropriate documentation and reporting under Indian transfer-pricing regulations.

Dividends and other cross-border payments should also be reviewed for income tax, withholding, tax treaty, FEMA and commercial substance requirements.

Learn more about our Transfer Pricing Advisory Services.

14. Employees, Payroll and Global Capability Centres

14.1 Employee Hiring and Payroll Compliance

Foreign-owned businesses should establish appropriate payroll, employment documentation, income-tax withholding and applicable employment compliance processes before regular hiring begins.

Requirements relating to provident fund, employee state insurance, professional tax, labour welfare and other laws depend on the nature of the establishment, employee circumstances and applicable central and state regulations.

14.2 Expatriates, Secondments and Captive Operations

Foreign employees and seconded personnel may require additional consideration of visa requirements, tax residency, social security, employment relationships and permanent establishment exposure.

Multinational groups establishing Indian captive or shared-services centres should also review intercompany service agreements, transfer pricing, workforce planning and financial controls.

See our GCC Setup in India services.

15. First 90 Days and Continuing Business Compliance

15.1 Initial Corporate and Operational Requirements

After incorporation, management should address applicable board approvals, auditor appointment, statutory registers, share records, accounting systems, bank authorisations, tax registrations and internal financial controls.

Companies should establish clear responsibilities for approvals, recordkeeping, invoicing, reporting and employee onboarding.

For finance implementation, review our Accounting and Bookkeeping Services.

15.2 Annual Tax, ROC and FEMA Compliance

Depending on the business, recurring compliance may involve annual ROC filings, financial statements, statutory audit, income-tax returns, GST returns, TDS, transfer pricing, FEMA reporting, FLA returns, payroll and sector-specific obligations.

Maintaining a central compliance calendar from the first year helps management avoid missed filings and regulatory difficulties.

See our Statutory Audit Services and FEMA Compliance Services.

16. Why Choose EzyBiz India for Business Setup Services?

16.1 Experienced Chartered Accountant-Led Advisory Team

EzyBiz India Consulting LLP is a Chartered Accountant-led advisory firm with over 20 years of professional experience. Our team includes Chartered Accountants, Company Secretaries and other regulatory professionals, including professionals with Big Four experience.

We provide practical assistance with Indian business establishment and related tax, corporate and foreign exchange requirements.

16.2 One Coordinated Setup and Compliance Framework

Rather than treating incorporation as an isolated assignment, we help foreign management teams address the interconnected steps of structure selection, documentation, incorporation, banking, capital infusion, regulatory filings and operational readiness.

Services can be customised according to the proposed investment and agreed engagement scope.

16.3 Ongoing Support After Business Incorporation

We can provide continuing assistance with accounting, GST, corporate tax, transfer pricing, payroll, FEMA, ROC compliance, audit and management reporting, subject to applicable professional independence requirements.

This allows overseas businesses to coordinate regulatory and financial matters with a professional Indian advisory team.

Start planning your Indian business setup. Share your home country, proposed activity, expected shareholders and intended operating location so that we can discuss the suitable implementation approach.

Mobile: +91 98992 17778
Email: anil@ezybizindia.in
WhatsApp: Speak with our India business setup team

17. Frequently Asked Questions About Business Setup in India

17.1 Can a Foreign Company Set Up a Business in India?

Yes. Depending on the activity and applicable law, a foreign company may establish an Indian subsidiary, joint venture, eligible LLP, branch office, liaison office, project office or another permitted commercial arrangement.

17.2 Can Foreign Investors Own 100% of an Indian Company?

Yes, 100% foreign ownership is permitted in many sectors, subject to applicable investment restrictions, sectoral conditions and approval requirements. The investor’s identity and beneficial ownership must also be considered.

17.3 Is an Indian Shareholder Mandatory?

Not merely because the investor is foreign. The proposed company must satisfy the applicable minimum member requirements, and foreign-owned structures may use legally appropriate shareholder arrangements while observing beneficial ownership and FDI rules.

17.4 Does an Indian Company Need a Resident Director?

Yes. The board must satisfy the resident-director requirement under the Companies Act, 2013 and applicable rules. Foreign nationals may also serve as directors subject to legal requirements.

17.5 Is RBI Approval Required for Every Foreign Investment?

No. Many investments are permitted under the automatic route. Government approval or other regulatory conditions may apply depending on the sector, investor identity, beneficial ownership and transaction.

17.6 How Long Does Business Setup in India Take?

Timelines depend on the structure, foreign documents, incorporation processing, banking and necessary registrations. A straightforward company incorporation may take around one to three weeks after complete documentation is available, with operational readiness potentially taking longer.

17.7 Is There a Minimum Capital Requirement?

An ordinary private limited company does not have a general statutory minimum paid-up capital requirement. Sector-specific rules, business commitments and practical working-capital needs may nevertheless affect the funding required.

17.8 Is GST Registration Mandatory Immediately?

No. GST registration depends on statutory applicability, including the nature of supplies, turnover, location and compulsory registration provisions.

17.9 Can Profits Be Repatriated Outside India?

Permissible dividends and other payments may be repatriated subject to applicable company law, taxation, withholding, FEMA and documentary requirements. The mechanism depends on the payment’s nature.

17.10 Can EzyBiz Provide Support After Incorporation?

Yes. Our services may include ongoing accounting, GST, income tax, transfer pricing, payroll, FEMA/RBI compliance, corporate secretarial support, audit and financial reporting, as agreed.

18. Related Services, Reviewed By and Disclaimer

18.1 Related India Business Setup and Market Entry Services

• India Market Entry Consulting – Main Pillar
• India Market Entry Strategy
• Foreign Company Registration in India
• Wholly Owned Subsidiary Setup
• Joint Venture Registration
• Branch Office Registration
• Liaison Office Setup
• Project Office Setup
• FEMA and RBI Advisory
• Company Registration Services
• GST Registration
• International Tax Advisory
• Transfer Pricing Advisory
• Accounting and Bookkeeping
• Business Setup in India Checklist
• India Market Entry by Country

18.2 Country-Specific Business Setup Guidance

Foreign investors can also explore our country-specific India entry resources:

• US Companies Entering India
• UK Companies Entering India
• Japanese Companies Entering India
• German Companies Entering India
• Singapore Companies Entering India
• Australian Companies Entering India
• UAE Companies Entering India

Reviewed By: CA Anil Agrawal, Founder, EzyBiz India Consulting LLP.

Last Updated: October 2026.

Disclaimer: This article is for general informational purposes and does not constitute legal, tax, corporate, financial or foreign investment advice for a particular transaction. Business setup requirements vary according to the investor’s jurisdiction and beneficial ownership, proposed sector, activities, company structure, applicable FDI policy, FEMA and RBI regulations, Indian company law, taxation, labour law, state requirements and sector-specific approvals. Government procedures and legal requirements may change. Investors should obtain transaction-specific professional advice before incorporation, transferring capital, hiring employees or beginning operations. EzyBiz does not guarantee government approvals, banking outcomes, processing times or search engine rankings.