Infographic: A Guide to Company Incorporation in India for Foreign Investors

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A Visual Guide to Company Incorporation for Foreign Investors

Foundation
Registration
Compliance
Contact

Phase 1: The Foundation

Begin with the essential digital identity and director credentials

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)

    Applied through Form DIR-3 on the MCA portal. Foreign nationals need to provide passport, address proof (should not be more than 2 months old), and a digital photograph.

Estimated Timeline: 7-14 days

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.

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 is required for sectors like defense, telecom, broadcasting, and banking. In addition, if the shareholders are from any country which share a land border with India, specific approval will be needed.

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
  • Proof of address (utility bill, bank statement) - should not be more than 2 months old
  • 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

    Must be held within 30 days of incorporation to appoint officers, adopt common seal, etc.

  • 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
  • Foreign Liabilities and Assets (FLA) Return

Annual

  • Annual Financial Statements
  • Income Tax Return
  • Annual Return (Form MGT-7)
  • Board Meeting (minimum 4 per year)
  • Annual General Meeting

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.

This infographic is for informational purposes only and should not be considered as legal or financial advice.

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