Business Registration by Foreign Company in India


India is among the fastest-growing economies in the world with immense human potential. The huge market base has always been an attraction for the lots of foreign investors who wish to invest their money. Opportunities in India has attracted a large amount of Foreign Direct Investment into the country and each year the amount of FDI inflow keeps increasing due to a number of foreign businesses starting their operations in India. Legal forms in which a foreign company can set up its establishment in India are as follow :

INDIAN SUBSIDIARY COMPANY REGISTRATION

Permanent Establishment
Wholly (100%) or Partial Ownership
Treatment as a Domestic Company
Lowest Tax Rates Benefits
Obtain Property In India
Benefits of Limited Liability Right to Sue
Separate Legal Status
Can Avail Loan Facility

INDIAN ASSOCIATE LLP REGISTRATION

Permanent Establishment
Wholly (100%) or Partial Ownership
Flexibility in Ownership & Management Stature
Less government intervention
Benefits of Limited Liability
Quicker Decision making process




JOINT VENTURE WITH INDIAN PARTNERS

Special Purpose Vehicle can be formed
100% FDI allowed
Flexible business Diversification Opportunities
Less government intervention
Quicker Decision making process
Can Avail Loan Facility
Help in sharing the liabilities



BRANCH OFFICE OF FOREIGN COMPANY

Help in diversification of Business
Profit of the branch can be freely remittable form India
Promote export from or import to India
Representing the Company in India and acting as an agent for trading

PROJECT OFFICE BY FOREIGN COMPANY

Formal Contact of the Project
Clearance of Project
Foreign Funding
Indian Funding


LIAISON OFFICE FOR FOREIGN COMPANY

Formal Contact of the Project
Clearance of Project
Foreign Funding
Indian Funding



Sectorial Limits of Foreign Direct Investments ( FDI) in India 2020

India, today is a part of top 100 club on Ease of Doing Business (EoDB). FDI inflows is increasing in India YoY . During FY 2020-21, total FDI inflow of $58.37 bn, 22% higher as compared to the first 8 months of 2019-20. FDI equity inflows received during April - November 2020 is $43.85 bn which is 37% more compared to April - November 2020 ($32.11 bn).

The Indian Government through Reserve Bank India every year publishes FDI Policy. From past few years there are so many changes FDI limits. FDI is allowed through following routes :

Automatic Route

In Automatic Route, the non-resident investor or the Indian company does not require any approval from Government of India for the investment.

Government Route

In Government or Approval Route, the non-resident investor or the Indian company have to take prior approval from the Government of India is required before Investment. Proposals for foreign direct investment under Government route are considered by respective Administrative Ministry/ Department.

Following are tabular presentation on FDI Limits in different sectors or you can use search tab directly to know FDI Limits.

Name of Sector/ Activity Limits Entry Route & Remarks
Agriculture & Animal Husbandry

Floriculture, Horticulture, Apiculture and Cultivation of Vegetables & Mushrooms under controlled conditions

Development and Production of seeds and planting material

Animal Husbandry(including breeding of dogs), Pisciculture, Aquaculture

Services related to agro and allied sectors 		100% Automatic
Tea Plantation Sector

1. Tea sector including tea plantations
2. Coffee plantations
3. Rubber plantations
4. Cardamom plantations
5. Palm oil tree plantations
6. Olive oil tree plantations		 100% Automatic
Broadcasting

Teleports(setting up of up-linking HUBs/Teleports)

Direct to Home (DTH)

Cable Networks (Multi System operators (MSOs) operating at National or State or District level and undertaking upgradation of networks towards digitalization and addressability

Mobile TV

Head end-in-the Sky Broadcasting Service(HITS)		 100% Automatic
Broadcasting

Cable Networks (Other MSOs not undertaking up gradation of networks towards digitalization and addressability and Local Cable Operators (LCOs))		 100% Automatic
Broadcasting Content Services

Terrestrial Broadcasting FM(FM Radio)

Up-linking of ‘News & Current Affairs’ TV Channels		 49% Automatic
Up-linking of Non-‘News & Current Affairs’ TV Channels/ Down-linking of TV Channels 100% Automatic
Print Media

Publishing of newspaper and periodicals dealing with news and current affairs

Publication of Indian editions of foreign magazines dealing with news and current affairs		 26% Government
Publishing/printing of scientific and technical magazines/specialty journals/ periodicals, subject to compliance with the legal framework as applicable and guidelines issued in this regard from time to time by Ministry of Information and Broadcasting. 100% Automatic
Mining

Mining and Exploration of metal and non-metal ores including diamond, gold, silver and precious ores but excluding titanium bearing minerals and its ores		 100% Automatic
Mining (Coal & Lignite) 100% Automatic
Mining 100% Automatic
Civil Aviation – Airports Green Field Projects & Existing Projects 100% Automatic
Civil Aviation – Air Transport Services

Scheduled Air Transport Service/ Domestic Scheduled Passenger Airline

Regional Air Transport Service(Foreign Airlines are barred from Investing in Air India)		 Automatic up to 49% Above 49% under Government route 100% Automatic for NRIs
Civil Aviation

Non-Scheduled Air Transport Service

Helicopter services/seaplane services requiring DGCA approval

Ground Handling Services subject to sectoral regulations and security clearance

Maintenance and Repair organizations; flying training institutes; and technical training institutions		 100% Automatic
Construction Development: Townships, Housing, Built-up Infrastructure 100% Automatic
Industrial Parks (new & existing) 100% Automatic
Satellites- establishment and operation, subject to the sectoral guidelines of Department of Space/ISRO 100% Government
Private Security Agencies 74% Automatic up to 49% Above 49% & up to 74% under Government route
Petroleum & Natural Gas

Exploration activities of oil and natural gas fields, infrastructure related to marketing of petroleum products and natural gas, marketing of natural gas and petroleum products etc.		 100% Automatic
Petroleum & Natural Gas

Petroleum refining by the Public Sector Undertakings (PSU), without any disinvestment or dilution of domestic equity in the existing PSUs		 49% Automatic
Defense Manufacturing

Defense Industry subject to Industrial license under the Industries (Development & Regulation) Act, 1951		 100% Automatic up to 49%

Above 49% under Government route in cases resulting in access to modern technology in the country
Telecom Services 100% Automatic up to 49% Above 49% under Government route
Cash & Carry Wholesale Trading 100% Automatic 100% Automatic
E-commerce activities (e-commerce entities would engage only in Business to Business (B2B) e-commerce and not in Business to Consumer (B2C) e-commerce.) 100% Automatic
Single Brand retail trading

Local sourcing norms will be relaxed up to three years and a relaxed sourcing regime for another five years for entities undertaking Single Brand Retail Trading of products having ‘state-of-art’ and ‘cutting edge’ technology.		 100 Automatic up to 49% Above 49% under Government route
Multi Brand Retail Trading 51 Government
Duty Free Shops 100% Automatic
Railway Infrastructure Construction, operation and maintenance of the following :

Suburban corridor projects through PPP

High speed train projects

Dedicated freight lines

Rolling stock including train sets, and locomotives/coaches manufacturing and maintenance facilities

Railway Electrification
Signaling systems

Freight terminals

Passenger terminals

Infrastructure in industrial park pertaining to railway line/sidings including electrified railway lines and connectivities to main railway line

Mass Rapid Transport Systems		 100% Automatic
Asset Reconstruction Companies 100% Automatic
Banking- Private Sector 74 Automatic up to 49% Above 49% & up to 74% under Government route
Banking- Public Sector 20 Government
Credit Information Companies (CIC) 100 Automatic
Infrastructure Company in the Securities Market 49% Automatic
Insurance

Insurance Company

Insurance Brokers

Third Party Administrators

Surveyors and Loss Assessors

Other Insurance Intermediaries		 49% Automatic
Pension Sector 49% Automatic
Power Exchanges 49% Automatic
White Label ATM Operations 100 Automatic
Financial services activities regulated by RBI, SEBI, IRDA or any other regulator 100 Automatic
Pharmaceuticals(Green Field) 100 Automatic
Pharmaceuticals(Brown Field) 100 Automatic up to 74% Above 74% under Government route
Food products manufactured or produced in India Trading, including through e-commerce, in respect of food products manufactured or produced in India. 100 Government

Prohibited Sectors / Activity



Lottery Business including Government/private lottery, online lotteries, etc.*


Sectors not open to private sector investment- atomic energy, railway operations (other than permitted activities


Manufacturing of cigars, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes


Gambling and Betting including casinos*


Trading in Transferable Development Rights (TDR)


Real Estate Business or Construction of farm houses**


Nidhi Company


Chit Funds

*Foreign technology collaboration in any form including licensing for franchise, trademark, brand name, management contract is also prohibited for Lottery Business and Gambling and Betting activities.

**Real estate business shall not include development of town shops, construction of residential/ commercial premises, roads or bridges and Real Estate Investment Trusts (REITs) registered and regulated under the SEBI (REITs) Regulations, 2014

Frequently Asked Question

Ask us anything, we would definitely answer!

  • Yes, Foreign company can incorporate with 100% ownership & it called as Indian Subsidiary company of Foreign Parent Company. Indian company Law allows you to retain 100% ownership by subscribing shares of Indian company subject to FDI guidelines.

  • Yes, as per the provisions of the Indian Companies Act, 2013, every company to be incorporated in India must have at least one Indian resident individual as a director.

  • It is not necessary that a Indian Resident director should also be a shareholder in an Indian Company. =

  • An Apostille is a specialized certificate, issued by the Secretary of State. The Apostille is affixed with your original document to verify it is legitimacy and authenticity so that is accepted in one of the other countries who are members of the Hague Apostille Convention.

    Since 2005, India is a member of the Hague Convention of October 5, 1961 that abolished the requirement of legalization of foreign public documents. Moreover, an apostille certificate can be used to authenticate public documents like passport copy, driver’s license copy, business documents, judgments, extract of a register or a notarial attestation.

  • Following are the documents required from a foreigner to start a company in India:

    a) In case of Proof of identity:

    In case of foreign nationals, passport is a mandatory requirement for proof of identity.

    b) In case of Proof of residence:

    Address proofs like bank statement, mobile bill, electricity bill, telephone bill and should be in the name of applicant only.

    In case of foreign applicant, address proof should not be older than 2 months from the date of filing of the e-Form

    The attached supporting documents should be attested/ apostille by the Consulate of the Indian Embassy, Foreign public notary.

  • Yes, a non-resident can become a director in Indian Company if he possess the required documents and one resident director is already on the board.

  • Yes, Foreigner can start the company. This is what is referred to as Foreign Direct Investment and India has several policies in place to encourage this kind of investments