Starting a Company in India as a Foreigner

Why Foreigners Should Consider Starting a Business in India

India’s liberalized foreign direct investment (FDI) policies, large domestic market, and cost-effective business environment make it a strategic choice for global investors. The Indian government actively promotes foreign investment through initiatives like Make in India, Startup India, and single-window clearances for foreign businesses.

Key advantages include:

• Access to a consumer base of over 1.4 billion people

   

• Competitive labor costs

   

• Rising internet and digital penetration

   

• Growing startup and innovation ecosystem

   

• Tax incentives in special economic zones (SEZs)

   

Legal Framework for Foreigners Starting a Company in India

1. Types of Business Entities Allowed

Foreign nationals can Open a company in India in any of the following forms:

• Private Limited Company (Most Preferred)

   

• Liaison Office

   

• Branch Office

   

• Project Office

   

• Limited Liability Partnership (LLP)

   

• Wholly Owned Subsidiary (WOS)

   

Among these, a Private Limited Company is the most favored due to its flexible structure and 100% FDI allowance in many sectors under the automatic route.

Step-by-Step Procedure for Starting a Company in India

At ADY & Co., we ensure our clients understand every step of the starting a company in India procedure, tailored specifically for foreign nationals. Here’s the detailed guide:

Step 1: Select a Business Structure

Foreigners usually go with:

• Wholly Owned Subsidiary of a foreign company

   

• Joint Venture with Indian partners

   

• Private Limited Company

   

The decision depends on the business goals, tax implications, and FDI sector caps.

Step 2: Get Digital Signature Certificate (DSC)

All directors must have a DSC issued by authorized certifying agencies in India to sign electronic forms.

Step 3: Apply for Director Identification Number (DIN)

Each proposed director requires a DIN from the Ministry of Corporate Affairs (MCA).

Step 4: Name Approval (SPICe+ Part A)

Choose a unique name and get it approved by the Registrar of Companies (ROC) via the SPICe+ portal.

Step 5: Incorporation of the Company (SPICe+ Part B)

File incorporation documents including:

• Memorandum of Association (MOA)

   

• Articles of Association (AOA)

   

• Proof of registered office

   

• ID and address proof of directors

   

Step 6: PAN, TAN, and Bank Account

Obtain the company’s PAN and TAN, and open a current bank account in an Indian bank.

Step 7: RBI Compliance (For FDI)

Report the inward remittance to the Reserve Bank of India (RBI) within 30 days. File FC-GPR form for shares issued to foreign investors.

Can a British Citizen Start a Business in India?

Yes, British citizens can start a business in India. The process remains largely the same. With no visa restriction on business ownership, UK entrepreneurs can register an Indian subsidiary or start a joint venture in sectors allowing 100% FDI.

At ADY & Co. Chartered Accountants, we’ve successfully assisted UK nationals in opening a company in India by foreigners, ensuring full legal and tax compliance under Indian and international law.

Minimum Requirements to Register a Company in India as a Foreigner

• At least one Director must be an Indian resident

   

• Minimum two Directors and two Shareholders (can be the same individuals)

   

• Registered office address in India

   

• Proof of foreigner’s identity, address, and passport (notarized & apostilled)

   

Bank Account and Capital Remittance

Once the company is incorporated:

1. A bank account must be opened in India

    

2. Foreign Direct Investment (FDI) funds are remitted through banking channels

    

3. Share capital must be allotted within 60 days and RBI compliance completed

    

Taxation and Regulatory Requirements

Foreign-owned companies in India must:

• Obtain GST Registration (if applicable)

   

• Deduct and deposit TDS

   

• File Income Tax Returns (ITR) annually

   

• Conduct statutory Audit if turnover exceeds limits

   

• File Annual Returns with MCA

   

With a dedicated team, ADY & Co. offers comprehensive Income Tax Filing Services and ITR Filing Help 2025 for foreign-owned Indian companies.

Compliance and Ongoing Obligations

• Maintain Books of Accounts as per Indian Accounting Standards

   

• File Annual Returns (AOC-4 & MGT-7) with MCA

   

• Conduct Annual Board Meetings

   

• Appoint a Statutory Auditor

   

• Report Foreign Liabilities and Assets (FLA) annually to RBI

   

Starting a Business in Singapore as a Foreigner vs. India

While starting a business in Singapore as a foreigner is a popular choice due to its ease of doing business, India provides:

• Larger consumer base

   

• Lower operational costs

   

• Better opportunities in sectors like manufacturing and fintech

   

• Emerging Tier-2 and Tier-3 city markets

   

ADY & Co. offers comparative insights and support to entrepreneurs deciding between India and other jurisdictions.

Industries with 100% FDI Approval

Foreigners can start companies in India with 100% ownership in sectors like:

• E-commerce (B2B model)

   

• Manufacturing

   

• Software and IT Services

   

• Renewable Energy

   

• Hospitality and Tourism

   

• Education and Training

   

Some sectors like defense, print media, and telecom may require government approval.

How ADY & Co. Chartered Accountants Can Help

Since 2012, ADY & Co., led by CA Yogesh Kumar, has built a strong reputation among international clients. We provide:

• Complete Company Registration Services

   

• Business Structuring Advice

   

• Tax Planning and Compliance

   

• RBI and FEMA Advisory

   

• Virtual CFO and Accounting Services

   

• Legal drafting of MOA, AOA, Shareholders Agreements

   

Our firm is your one-stop solution for starting a company in India, ensuring a smooth entry, regulatory compliance, and scalable operations.

Documents Required for Foreigners to Start a Company in India

Establishing a company in India as a foreign national involves preparing and submitting a specific set of documents. At ADY & Co. Chartered Accountants, we guide you through every documentation requirement, ensuring nothing delays your registration process.

For Foreign Directors and Shareholders:

• Passport (Notarized and Apostilled)

   

• Address Proof (Utility bill, driving license, etc.)

   

• Recent Photograph

   

• Digital Signature Certificate (DSC)

   

• Director Identification Number (DIN)

   

For the Indian Company:

• Proposed Company Name (with 2–3 backup options)

   

• Memorandum of Association (MOA)

   

• Articles of Association (AOA)

   

• Proof of Registered Office Address (Rent agreement or ownership document with utility bill)

   

• Board Resolution (if the shareholder is a corporate entity)

   

Visa Considerations for Foreign Entrepreneurs

Foreigners can travel to India on a Business Visa or Employment Visa if they intend to manage company operations personally. However, a visa is not required to merely register a company remotely — incorporation can be handled online with local representatives.

At ADY & Co., we can incorporate your company in India even if you are overseas, and help with visa support once your operations require physical presence.

FEMA and RBI Compliance – A Critical Step for Foreigners

The Foreign Exchange Management Act (FEMA) governs all foreign investments in India. All foreign investment must be:

• Reported to RBI via Advance Reporting Form (ARF) within 30 days of receiving funds

   

• Followed by Filing Form FC-GPR within 60 days of share allotment

   

• Adhering to sectoral caps and approval routes (automatic or government)

   

Failure to comply with FEMA and RBI norms can lead to hefty penalties. ADY & Co. Chartered Accountants provides FEMA advisory services to ensure every transaction is legally compliant and risk-free.

Costs Involved in Setting Up a Company in India as a Foreigner

Here is an approximate breakdown of costs involved in starting a company in India:

Total Initial Investment: Approx ₹25,000 – ₹1,00,000 depending on complexity.

Note: These are indicative rates. ADY & Co. offers tailored packages depending on your business needs.

Bank Account Opening for Foreign-Owned Companies

Foreigners often face challenges when opening an Indian bank account due to strict KYC norms. However, we ensure a smooth account opening process by:

• Liaising with top Indian banks (ICICI, HDFC, SBI, Axis)

   

• Preparing a complete KYC set

   

• Ensuring initial capital remittance guidelines are met

   

• Assisting with authorized signatory procedures

   

Post-Incorporation Compliance Checklist

After the company is incorporated, you must ensure:

 ✅ Appointment of Auditor within 30 days
✅ Issuance of Share Certificates
✅ Filing of INC-20A (Declaration of Commencement of Business)
✅ Maintenance of Statutory Registers and Minutes Book
✅ Timely TDS, GST, PF/ESIC (if applicable)
✅ Annual Filing with MCA and Income Tax Department

Why Choose ADY & Co. Chartered Accountants?

With over a decade of experience, we have become a trusted name among NRIs, foreign investors, startups, and MNCs entering the Indian market. CA Yogesh Kumar, our founder, is widely recognized for his strategic and compliant approach to international business advisory.

Our Services Include:

• Company Formation

   

• RBI/FEMA Compliance

   

• Foreign Taxation & DTAA Guidance

   

• Import-Export Code (IEC) Application

   

• Virtual CFO & Bookkeeping

   

• GST & TDS Compliance

   

• Intellectual Property Registration

   

• Legal Drafting & Licensing

   

We go beyond registration — we help your business grow in India.

Common Mistakes Foreigners Must Avoid While Starting a Company in India

1. Choosing the wrong business structure

    

2. Ignoring RBI/FEMA guidelines

    

3. Not appointing a local resident director

    

4. Delayed share allotment and compliance

    

5. Poor understanding of tax and regulatory regimes

    

Avoiding these pitfalls is critical — which is why aligning with experienced advisors like ADY & Co. is essential for success.

Industries Where Foreigners are Investing in India (2025 Trends)

1. IT and Software Development

    

2. Green Energy and Solar Projects

    

3. Real Estate and Infrastructure

    

4. E-commerce and Logistics

    

5. Education and EdTech

    

6. Food & Beverage Franchise Chains

    

7. Tourism and Travel Startups

    

We help foreign investors identify high-potential sectors with minimal regulatory bottlenecks.

Starting a Company in India from the UK, USA, or EU: Jurisdictional Notes

British citizens, Americans, and Europeans face no major restrictions in registering companies in India. However, citizens from certain restricted countries like Pakistan, Bangladesh, and China must undergo prior approval from Indian authorities.

We have helped UK entrepreneurs asking “Can a British citizen start a business in India?” establish successful subsidiaries and joint ventures — ensuring seamless cross-border compliance.

Virtual Business Setup – No Need to Be Physically Present in India

Thanks to India’s digital infrastructure, you can:

• Register a company online

   

• Sign documents digitally

   

• Appoint Indian representatives

   

• Manage operations remotely

   

ADY & Co. offers Virtual CFO Services, remote compliance management, and accounting support, making it easier than ever for global entrepreneurs to enter India.

Our Process – ADY & Co. Company Setup Flow

1. Business Consultation

    

2. Structure Finalization

    

3. Documentation and DSC/DIN Process

    

4. Name Approval and Filing SPICe+

    

5. PAN/TAN, GST, Bank Account

    

6. RBI/FEMA Filings (if FDI involved)

    

7. Ongoing Compliance, Tax & Audit Services

    

We offer a complete one-window solution — saving you time, money, and legal risk.

Ready to Start Your Indian Business Journey?

Starting a company in India as a foreigner is a gateway to one of the most dynamic markets in the world. But success hinges on legal accuracy, compliance, and financial foresight.

Let ADY & Co. Chartered Accountants, under the seasoned leadership of CA Yogesh Kumar, be your trusted partner in your India entry strategy.

We’ve guided hundreds of foreign companies since 2012 — and yours could be next.

Case Study: A UK-Based Fintech Startup Enters India with ADY & Co.

In 2023, a leading UK-based fintech startup aimed at expanding into the Indian market with a digital lending platform targeting SMEs. The founders faced challenges such as understanding the Indian regulatory framework, navigating the FDI norms, and setting up a legal structure that allowed full ownership while being tax-efficient.

Challenges:

• Understanding how a British citizen can start a business in India

   

• Complying with RBI’s FDI inflow and FEMA regulations

   

• Registering a 100% foreign-owned private limited company

   

• Opening an Indian bank account and setting up GST and TDS compliance

   

Our Solution:

ADY & Co. handled the entire incorporation process, end-to-end:

• Incorporated a Wholly Owned Subsidiary (WOS) within 15 days

   

• Facilitated DIN, DSC, and SPICe+ e-filing

   

• Helped open a current account with HDFC Bank

   

• Filed FC-GPR with RBI post capital investment

   

• Registered for GST, TDS, and Professional Tax

   

• Provided Virtual CFO support and monthly accounting

   

• Helped establish Data Security and GDPR compliance framework

   

Result:

The startup went live within 60 days and currently serves over 4,000 Indian SMEs, backed by fully compliant operations and a lean financial structure, thanks to ADY & Co.’s advisory.

Checklist for Foreigners Opening a Company in India

Avoid These Common Pitfalls When Starting a Business in India

1. Choosing wrong structure: Many foreigners opt for LLPs, which do not allow FDI under the automatic route. A Private Limited Company is preferred.

    

2. Ignoring FEMA rules: Non-compliance can lead to penalties of 300% of the investment amount.

    

3. Poor banking preparation: Indian banks follow strict KYC norms. Not having required documentation can delay account opening.

    

4. No resident director: This is non-negotiable for company registration.

    

5. Improper tax structuring: Failure to plan for withholding tax (TDS), GST, and transfer pricing can result in double taxation and scrutiny.

    

ADY & Co. prevents these pitfalls with pre-incorporation strategy sessions.

Why India is the Next Global Startup Destination

India’s market is growing rapidly in sectors like:

• Artificial Intelligence & SaaS

   

• EV & Renewable Energy

   

• Fintech and Digital Lending

   

• HealthTech and MedTech

   

• Manufacturing and Contract Exporting

   

• E-Commerce (especially Tier-2/3 regions)

   

With low setup costs, robust IP laws, and a digitally-savvy workforce, India is where the world is building the future.

Our Foreign Clientele at a Glance

Over the years, ADY & Co. Chartered Accountants has worked with:

• USA-Based Software Firms establishing R&D centers

   

• European Fashion Labels launching Indian ecommerce subsidiaries

   

• Middle East Industrial Suppliers setting up Indian warehousing units

   

• British Education Startups opening EdTech platforms

   

• Australian Fintech Ventures targeting India’s MSME segment

   

Each engagement has followed full compliance with Indian regulatory requirements, and strategic tax planning under the India-UK, India-USA, and other DTAA treaties.

Transfer Pricing and International Transactions

Foreign companies engaged in inter-company transactions, like IP licensing or shared services, must comply with Transfer Pricing Regulations. We ensure:

• Arms-length documentation

   

• Form 3CEB filings

   

• CBCR and Master File (if applicable)

   

• Avoidance of double taxation with proper DTAA advice

   

Our international tax team handles your global structure with a local lens.

Setting Up a Subsidiary vs. Branch Office vs. Liaison Office

For full control and tax efficiency, Private Limited Subsidiaries are the ideal choice for foreign nationals.

Conclusion: Enter India with Confidence

Whether you’re a British citizen exploring new markets, a US-based entrepreneur seeking high-growth opportunities, or an Asian investor looking to diversify — India offers the perfect blend of scale, talent, and transformation.

But entering this market requires clarity, precision, and a local expert. ADY & Co. Chartered Accountants, under the expertise of CA Yogesh Kumar, offers the most reliable and professional support for starting a company in India as a foreigner — from planning to profit.

Get started today, and let us be your strategic partner in India’s growth story.