--- title: "Company Incorporation" date: 2023-09-11 author: "Pawan Khatri" url: https://ksandk.com/services/company-incorporation/ --- Infographic: A Guide to Company Incorporation in India for Foreign Investors Foundation Registration Compliance Contact ## Phase 1: The Foundation Begin with the essential digital identity and director credentials ### Business Structure Selection Choose the most suitable business structure based on your investment goals, liability concerns, and operational requirements. #### Private Limited Company ℹ️ Most popular among foreign investors due to limited liability protection and ease of raising capital. Minimum 2 directors and 2 shareholders required. At least one director must be resident in India. #### Limited Liability Partnership (LLP) ℹ️ Combines the flexibility of a partnership with the limited liability protection of a company. Minimum 2 partners required. At least one designated partner must be resident in India. #### Wholly Owned Subsidiary ℹ️ 100% foreign ownership allowed in most sectors under the automatic route. Registered as a private limited company with 100% foreign shareholding. ### Pre-Incorporation Checklist The first step involves securing a Digital Signature Certificate (DSC) for all proposed directors and applying for a Director Identification Number (DIN). These are mandatory for all electronic filings with the Ministry of Corporate Affairs (MCA). - #### Digital Signature Certificate (DSC) Obtained from a Certifying Authority in India. Requires notarized and apostilled copies of passport and address proof for foreign nationals. - #### Director Identification Number (DIN) For foreign directors, the DIN application shall be made as part of the incorporation process through SPICe+ Part B. Estimated Timeline: 3–4 working days, subject to successful video verification by the proposed director. ### Foreign Investment Regulations #### Automatic Route No prior government approval required for investment in most sectors. Simply notify the Reserve Bank of India (RBI) within 30 days of receiving foreign investment. #### Government Route Prior approval from the Government of India is required for foreign investment in sectors such as defence (beyond prescribed limits), telecom (beyond prescribed limits), broadcasting, and banking. Additionally, if the shareholders, ultimate beneficial owners, or proposed directors are from countries that share a land border with India, government approval will be mandatory ## Phase 2: Registration Process Navigate the formal incorporation procedures with the Ministry of Corporate Affairs #### Name Reservation Apply for name approval using RUN (Reserve Unique Name) service #### File SPICe+ Form Submit incorporation documents and pay fees #### Certificate of Incorporation Receive digital certificate with CIN, PAN, and TAN #### Bank Account Open corporate bank account for business operations ### Name Reservation & Documentation **What:** Choose a unique company name (e.g., ABC Pvt. Ltd.). **How:** File SPICe+ Part A on MCA portal; suggest 5 names in the order of choice. **Guidelines:** Name should not resemble existing companies or trademarks. **Timeline:** 2-3 days for approval and valid for 20 days post approval. ### Draft MoA & AoA **What:** MoA defines objectives; AoA outlines internal rules. **Requirements:** Align with Companies Act, 2013. **Timeline:** 2-3 days. ### Required Documents #### For Foreign Directors/Shareholders - ✓ Notarized and apostilled copy of passport - ✓ Notarised and apostilled Proof of address (utility bill, bank statement) - should not be older than 2 months old from the date of filing of incorporation application. - ✓ Digital photograph - ✓ KYC documents as per RBI guidelines #### For Company Registration - ✓ Memorandum of Association (MOA) - ✓ Articles of Association (AOA) - ✓ Proof of registered office address - ✓ Declaration of compliance with Companies Act Estimated Timeline: 7-10 days #### Minimum Capital ₹1,00,000 ~$1,200 USD ~€1,100 EUR Recommended minimum capital for foreign investors, though no statutory minimum exists #### Processing Time 15-30 Days Total time from DSC application to bank account opening ## Phase 3: Post-Registration Compliance Essential steps after incorporation to ensure regulatory compliance ### Immediate Compliance Requirements - #### First Board Meeting The first Board Meeting must be held within 30 days of incorporation to appoint auditors, adopt the charter documents, take note of the registered office, and address any other initial compliance requirements. - #### Returns and filings - Form ADT-1: Appointment of the statutory auditor - Form INC-20A: Declaration of commencement of business - Form FC-GPR: Reporting of foreign direct investment (FDI) to the RBI - #### GST Registration Mandatory for businesses with turnover exceeding ₹20 lakhs (₹10 lakhs for special category states). - #### Professional Tax Registration Required in states where Professional Tax is applicable. - #### ESIC & PF Registration Mandatory if employing 10 or more employees (for ESIC) and 20 or more employees (for PF). ### Ongoing Compliance Calendar #### Monthly - GST Returns (GSTR-3B and GSTR-1) - TDS/TCS Deposit - PF/ESI Contributions #### Quarterly - TDS Returns #### Annual - Annual Financial Statements - Income Tax Return - Annual Return (Form MGT-7) - Board Meeting (minimum 4 per year) - Annual General Meeting - FLA Return is to be filed annually with the Reserve Bank of India. ### Foreign Exchange Regulations #### Repatriation of Profits Foreign investors can freely repatriate profits, dividends, and royalties after payment of applicable taxes in India. Proper documentation and filing of Annual Performance Reports with the RBI is required. #### Foreign Exchange Management Act (FEMA) All cross-border transactions must comply with FEMA regulations. Regular reporting of foreign investments and transactions to the RBI is mandatory. Compliance Completion: 90-100% ## Contact Us Get in touch with our experts for personalized assistance ### Reach Out to Our Incorporation Specialists Our team of experienced professionals is ready to guide you through every step of the incorporation process in India. Contact us for a free initial consultation. #### Email incorporate@ksandk.com We typically respond within 24 hours #### Phone +91 11 - 41032969, 41318190, 41318191 Available Monday-Friday, 9:30 AM - 6:30 PM IST #### Office Locations New Delhi Mumbai Chennai Bangalore Hyderabad Pune Kochi Mangalore #### Schedule a Consultation Send us your details and preferred time for a call, and our experts will get back to you to schedule a free consultation session. 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