--- title: "Business Setup In India" date: 2023-09-11 author: "Pawan Khatri" url: https://ksandk.com/services/business-setup-in-india-for-foreign-companies/ --- [Skip to main content](#brx-content)[Skip to footer](#brx-footer) Free interactive tools ## Decide before you spend a rupee. Four decision tools built by our corporate & FEMA lawyers, no sign-up. No other Indian firm offers a single one. Free ### FDI Route & Sector-Cap Checker Your sector + investor country → automatic vs government approval, the cap %, and a Press Note 3 land-border flag. [Try it below ↓](#checker) Free ### Entry-Structure Selector Answer a few questions → WOS, LLP, Branch, Liaison, Project Office, JV or GIFT City, with tax & repatriation. [Try it below ↓](#selector) Free ### Setup Timeline Estimator Structure + where your documents come from → an honest, week-by-week timeline from name reservation to a live bank account. [Try it below ↓](#timeline) Free ### Compliance-Calendar Generator Incorporation date + structure → a personalised ROC / RBI / tax / GST calendar you can export. [Try it below ↓](#calendar) Tool 01 ## Is your investment allowed, and do you need government approval? Pick your sector and where the investment ultimately comes from. Everything below reflects the FDI policy as amended by **Press Note 1 & 2 of 2026**, where most competitor pages are years out of date. ### FDI Route & Sector-Cap Checker For direct equity investment into an Indian company. Instant, indicative, confirm with counsel before you file. Sector / activity Investor's ultimate beneficial-owner country where the money really comes from Foreign ownership you want 100% Indicative guidance based on the Consolidated FDI Policy 2020 as amended (Press Notes to 2026) and FEM (Non-Debt Instrument) Rules. Not legal advice; sector conditions and beneficial-ownership/control tests are fact-specific. **Verify with KSK before investing or filing.** Tool 02 ## Which India entry structure fits you? Answer a few questions, we'll recommend the right vehicle, its tax and repatriation, and what to rule out and why. It's the structure matrix our lawyers use, made interactive. ### Entry-Structure Selector Across WOS, LLP, Branch, Liaison, Project Office, Joint Venture and GIFT City. Answer the questions to see your recommended structure → Indicative only, the right structure also depends on your sector's FDI cap/route and tax position. **Confirm with KSK before you commit.** Tool 03 ## How long does setup really take? An honest, week-by-week timeline for a foreign-owned setup, apostille, resident director and FEMA filings and all. In ranges, because the truth is a range. ### Setup Timeline Estimator A realistic, week-by-week timeline for a foreign-owned setup. Structure Where your documents come from Indicative timing based on typical MCA / RBI processing and document turnaround; actual dates depend on approvals and how quickly your documents are ready. **KSK manages the critical path for you.** Tool 04 ## Your first-year compliance calendar. Enter your incorporation date and structure, we'll generate the ROC, RBI, tax and GST deadlines a foreign-owned entity must hit, with real dates you can export to your calendar. ### Compliance-Calendar Generator Companies Act, FEMA, Income-tax & GST obligations for year one. Structure Incorporation date Has foreign shareholding (FEMA filings) GST-registered International related-party transactions Download .ics calendar Indicative statutory due dates (Companies Act 2013, FEMA, Income-tax Act, GST). Dates can shift by government circular, **KSK keeps you ahead of each one.** Why India, why now ## Why set up a business in India now? India is the world's fastest-growing major economy and, since 2026, one of its most open to foreign investors, with 100% foreign ownership in most sectors and a wave of reforms aimed squarely at inbound investment. 100% ### Foreign ownership in most sectors Most sectors take 100% FDI on the automatic route, with no local partner and no prior approval. Insurance joined the 100% list in 2026. #1 ### Fastest-growing major economy A 1.4-billion-person market, deep English-speaking talent, and the world's largest hub for Global Capability Centres and IT services. 2026 ### Reforms in your favour Press Note 2 eased the China / land-border rule, the tax on foreign companies fell to 35%, and a new Income-tax Act simplifies the regime. Entry structures ## Eight ways in, and how they really compare. Your first decision when you set up a business in India. Here is the same matrix our lawyers use: ownership, whether it can earn income, the effective tax rate, and how you get money out. | Structure | 100% foreign? | Earns income? | Effective tax | Repatriation | Best for | | --- | --- | --- | --- | --- | --- | | WOS (Pvt Ltd) | Yes* | Yes | ≈25.17% | Dividends (WHT/DTAA) | Default operating company | | Joint Venture | No, local partner | Yes | ≈25.17% | Dividends | Capped / regulated sectors | | LLP | Yes* | Yes | ≈34.94% | Profit share tax-free | Services in fully-open sectors | | Liaison Office | Parent | No | Nil | N/A | Market exploration | | Branch Office | Parent | Yes (limited) | ≈38.22% | Post-tax, free | Revenue without a subsidiary | | Project Office | Parent | Project only | ≈38.22% | On completion | One-off EPC / turnkey | | GIFT City IFSC | Yes | Yes | 0% holiday / 9% MAT | FX, incentivised | Financial-services hub | | SEZ Unit | Yes | Yes (exports) | Holiday (legacy) / 25.17% | Export earnings | Export manufacturing / IT | *Subject to the sector's FDI cap and route. Use the Entry-Structure Selector above for a recommendation tailored to your plan. FDI routes & sector caps ## Automatic, approval, or off-limits. Most sectors take 100% foreign investment with no prior approval, you invest and report. Others are capped, need government approval, or are closed. The Checker above is live; here's the map. ### ✓ Automatic route No prior approval. Invest, allot shares, and file **Form FC-GPR within 30 days** on RBI's FIRMS portal. The default for most manufacturing, IT, services, single-brand retail, marketplaces, telecom and (from 2026) insurance. ### ! Government route Prior approval via the Foreign Investment Facilitation Portal (fifp.gov.in) → the concerned ministry, typically ~8–12 weeks. Applies to capped/sensitive sectors (multi-brand retail, print & digital news media, defence >74%, banking >49%). | Sector | Cap | Route | | --- | --- | --- | | Manufacturing · IT / software · services | 100% | Automatic | | Single-brand retail | 100% | Automatic | | E-commerce, marketplace | 100% | Automatic | | Insurance (cos & intermediaries) *(new 2026)* | 100% | Automatic | | Telecom · greenfield pharma · construction-dev | 100% | Automatic | | Defence | 100% | ≤74% Auto >74% Govt | | Private-sector banking | 74% | ≤49% Auto Govt | | Multi-brand retail | 51% | Government | | Print & digital media (news) | 26% | Government | | E-commerce, inventory-based | 0% | Prohibited | | Lottery · gambling · chit funds · tobacco · atomic energy · railway ops | 0% | Prohibited | #### Investing from a land-border country? (Press Note 3, eased in 2026) Investment from a land-bordering country (China, Pakistan, Bangladesh, Nepal, Bhutan, Myanmar or Afghanistan), or from Hong Kong or Macau (treated as part of China), needed prior government approval under Press Note 3 (2020). **Press Note 2 of 2026** eased this: a non-controlling stake of **≤10% beneficial ownership** can now use the automatic route (with reporting), while controlling investments still need approval. Pakistan remains the strictest. The FDI Checker flags this automatically. How it works ## From documents to “live” in about 4–8 weeks. Incorporation is fully online through the MCA V3 portal. You never need to visit India. Here's the critical path for a foreign-owned subsidiary. #### 1 · Digital Signatures (DSC) For each director/subscriber, foreign nationals via apostilled passport + video verification. #### 2 · Name reservation (SPICe+ Part A) Reserve the company name (valid 20 days). #### 3 · Incorporation (SPICe+ Part B) Directors, capital, registered office & objects, DIN is allotted here for up to 3 directors. #### 4 · Charter documents (e-MOA / e-AOA) A foreign corporate subscriber attaches physically-signed, apostilled/consularised copies. #### 5 · AGILE-PRO-S Bundled EPFO, ESIC, bank account, professional tax (and optional GST). #### 6 · PAN, TAN & Certificate of Incorporation Auto-issued with the CoI, you're now a company. #### 7 · Bank account + FEMA filing Remit the subscription capital, then file **FC-GPR within 30 days** of allotment. #### 8 · Commencement of business (INC-20A) File within 180 days, you can't start trading or borrow until it's in. Minimum requirements **2 directors**, at least one **resident in India** (present ≥182 days in the financial year). **2 shareholders**, a nominal second share is common for a 100%-owned subsidiary. **No minimum capital**, fund the company with whatever your business actually needs. **A registered office** in India, plus apostilled/consularised parent documents. Use the [Setup Timeline Estimator](#timeline) above to map your critical path and the [Compliance-Calendar Generator](#calendar) for your post-incorporation deadlines. Tax & repatriation ## What you'll pay, and how you get profit home. Structure drives your tax bill by ~13 points, and repatriation is where a good structure pays for itself. 25.17% ### Subsidiary (WOS) Domestic company under s.115BAA, no MAT. The lowest effective rate and the reason most investors pick a subsidiary. 38.22% ### Branch / PE Foreign-company rate (base cut from 40% to 35% in 2024). No dividend layer, but ~13 points higher than a subsidiary. 34.94% ### LLP Flat rate, but the profit share is **tax-free** in partners' hands, so there's no second dividend tax on the way out. #### Getting money out Dividend Distribution Tax was abolished in 2020, dividends are taxed in the shareholder's hands, with withholding reduced by treaty (US ~15%, UK ~10–15%, Singapore ~10%, Netherlands ~10% after the Nestlé ruling). Every remittance needs **Form 15CA/15CB** (renamed Form 145/146 under the Income-tax Act 2025). A branch remits post-tax profit freely; the equalisation levy has been fully abolished. Treaty relief needs a TRC + Form 10F and real substance (watch GAAR). By where you're coming from ## Guidance for your corridor. The route into India looks different depending on your home jurisdiction, documents, treaty rates and approvals all vary. SG ### From Singapore India's #1 FDI source. A ~10% dividend treaty rate and a popular holding jurisdiction, but expect substance/GAAR scrutiny. Documents are apostilled. AE ### From the UAE A fast-growing corridor, strong for trading and holding structures. Non-Hague for India, documents need **consular legalisation**, not apostille. US ### From the USA 100% ownership in most sectors; ~15% dividend treaty rate. Watch Permanent-Establishment risk if US staff operate in India (the 2025 Hyatt Supreme Court ruling on fixed-place PE). UK ### From the UK 100% ownership; ~10–15% dividend treaty rate. Documents are apostilled under the Hague Convention, usually the fastest authentication route. CN ### From China Press Note 3 land-border rule: controlling stakes need government approval; ≤10% eased under Press Note 2 of 2026. Documents need consular legalisation (apostille not accepted). ### Somewhere else? We advise investors from 97 countries. Tell us your corridor and we'll map the route, treaty position and document path. Avoid the costly traps ## Common mistakes foreign investors make. Most DIY and template setups repeat the same errors, on the details that matter most. Here is what to get right when you set up a business in India as a foreigner. ### Getting the resident-director test wrong The rule is 182 days in the **financial year**, not the calendar year (changed in 2018). Many filing agents still quote the old test and appoint a director who does not actually qualify. ### Deciding on a stale tax rate Old guides still quote a 43.68% branch rate. The real effective rate for a foreign company is ~36–38% after the 2024 cut, and a subsidiary pays ~25%. Choosing a structure on the wrong number is expensive. ### Ignoring Permanent-Establishment risk A home-working employee or a dependent agent in India can create a taxable presence for the foreign parent. The 2025 Hyatt Supreme Court ruling widened fixed-place PE exposure, so plan the structure before you hire. ### Missing the land-border (Press Note 3) rule Investment linked to China and other land-border countries needs government approval above a 10% controlling stake, even through a Singapore or Hong Kong vehicle. Our FDI Checker flags it for you. ### Skipping the INC-20A commencement filing A new company cannot start trading or borrow until it files INC-20A within 180 days of incorporation. Miss it and penalties accrue and the company can be struck off, an easy deadline to overlook once setup is done. ### Forgetting position-based filings The RBI FLA return is due every 15 July while foreign shares sit on the books, even with zero activity. Miss it and penalties accrue quietly. Why King Stubb & Kasiva ## India-entry specialists, not a filing portal. A full-service Indian law firm that has set up 2,000+ companies, with the judgment a registration website can't offer. #### Pan-India & cross-border 9 offices and a 97-country network, one team from market entry through to exit. #### The full lifecycle Structure, FDI/FEMA, incorporation, tax, employment, IP, compliance and disputes under one roof. #### Current on every 2026 reform Press Note 2 of 2026, 100% insurance FDI, the new Income-tax Act, the Labour Codes, built into our advice, not years out of date. ![Jidesh Kumar](https://ksandk.com/wp-content/uploads/jidesh-Ksandk.webp) Jidesh Kumar Managing Partner, Corporate, IP & Litigation ![Rajesh Sivaswamy](https://ksandk.com/wp-content/uploads/Rajesh-Ksandk.webp) Rajesh Sivaswamy Senior Partner, M&A, PE/VC & FDI ![Aurelia Menezes](https://ksandk.com/wp-content/uploads/94efa763-4a04-4d32-98cb-dda909d77eb3.webp) Aurelia Menezes Partner, Corporate & Commercial 2,000+ Companies set up in India 9 Offices across India 97 Country network 20+ Years advising foreign investors Your questions, answered ## India-entry FAQs. The 25 questions foreign investors actually ask, answered accurately and current to 2026. Guides & insights ## Everything we've written on setting up in India. Deep-dive guides from our corporate, FDI, tax and employment teams. Free to read, and kept current as the law changes. ### Getting started [IncorporationCompany registration & incorporation in India](https://ksandk.com/startups/company-registration-and-incorporation-india/)[IncorporationBusiness registration in India: a legal overview](https://ksandk.com/corporate/business-registration-in-india/)[StructureSetting up a private limited company in India](https://ksandk.com/startups/guide-setting-private-limited-company-in-india/)[StructureLLP vs private limited vs OPC](https://ksandk.com/startups/legal-startups-india-llp-private-limited-opc/)[For foreignersA guide for foreign nationals starting a business in India](https://ksandk.com/startups/foreigner-guide-start-a-business-in-india/) ### Foreign companies & FDI [FDIForeign-owned & controlled companies (FOCCs)](https://ksandk.com/company-incorporation/foreign-owned-controlled-foccs/)[FDIFDI non-debt instrument rules, explained](https://ksandk.com/fdi/ministry-of-finance-amends-fdi-non-debt-instruments/)[DirectorsGetting a DIN for foreign directors](https://ksandk.com/company-incorporation/din-foreign-directors-india/)[SetupDigital Signature Certificate (DSC) in India](https://ksandk.com/company-incorporation/digital-signature-certificate/)[StructureJoint ventures in India: types, pros & cons](https://ksandk.com/corporate/joint-ventures-in-india-legal-pros-and-cons/)[SEZBusiness setup in a Special Economic Zone (SEZ)](https://ksandk.com/startups/business-setup-in-special-economic-zones-in-india/) ### Tax & Permanent Establishment [PE riskCan employment or consulting create a PE in India?](https://ksandk.com/labour-employment/can-employment-or-consulting-create-a-permanent-establishment-in-india-legal-framework-and-key-considerations/)[TaxPlace of Effective Management (POEM) in India](https://ksandk.com/tax/place-of-effective-management-in-india-a-detailed-legal-analysis/) ### Sector & operating guides [GCCSetting up a Global Capability Centre (GCC)](https://ksandk.com/company-incorporation/global-capability-centers-india/)[FintechSetting up a fintech company in India](https://ksandk.com/startups/fintech-company-india/)[EmploymentLabour-law compliance for new companies](https://ksandk.com/labour-employment/labour-law-compliances-startups-india/)[ComplianceMCA21 V3: the 38 updated filing forms](https://ksandk.com/corporate/38-forms-companies-act-2013-mca21-v3-portal/) Get in touch ## Book your free India-entry consultation. Tell us your plan and where you are based. We will map the right structure, the FDI route and the timeline, and handle it end-to-end, with 2,000+ setups behind us. - A reply within one business day - Specialist corporate & FEMA lawyers, not a filing portal - Advisers for foreign investors from 97 countries [WhatsApp us](https://wa.me/917428567444?text=Hi%20King%20Stubb%20%26%20Kasiva%2C%20I%20would%20like%20help%20setting%20up%20a%20business%20in%20India%20as%20a%20foreign%20company.) [Or use our contact page →](https://ksandk.com/contact-us/) `).join(''); $('result').innerHTML = ` ${cls==='r-auto'?'✓':cls==='r-stop'?'✕':'!'} ${route} FDI cap ${s.prohibited?'0%':s.cap+'%'} Your ask ${pct}% ${noteHtml} **What you'd file:** ${filing} [Talk to KSK about your route →](#contact)`; } [selS,selC,rng].forEach(el=>el.addEventListener('input',assess)); selS.value='0'; assess(); --- ## Office Locations - [New Delhi](https://ksandk.com/locations/top-corporate-law-firm-in-delhi/) (HQ): +91-11-41318190 | info@ksandk.com - [Mumbai](https://ksandk.com/locations/top-corporate-law-firm-in-mumbai/): 3 offices (Nariman Point, Lower Parel, Andheri) | mumbai@ksandk.com - [Bangalore](https://ksandk.com/locations/top-corporate-law-firm-in-bangalore/): bangalore@ksandk.com - [Chennai](https://ksandk.com/locations/chennai/): chennai@ksandk.com - [Hyderabad](https://ksandk.com/locations/hyderabad/): hyderabad@ksandk.com - [Pune](https://ksandk.com/locations/pune/): pune@ksandk.com - [Kochi](https://ksandk.com/locations/kochi/): kochi@ksandk.com ## Contact - [Contact Page](https://ksandk.com/contact-us/) - General: info@ksandk.com | +91-11-41318190 - WhatsApp: +91-7428567444 - [Privacy Statement](https://ksandk.com/privacy-statement/) - [Terms of Use](https://ksandk.com/terms-of-use/)