Foreign Company Formation in India

Why Foreign Companies Are Investing in India

India offers a unique mix of low operational costs, highly skilled labor, and pro-business government policies. With a population of over 1.4 billion and rapidly growing middle-class consumers, it’s no surprise that foreign company formation in India is witnessing exponential growth.

Types of Foreign Entities in India

When setting up a foreign company in India, the following structures are commonly used:

1. Wholly Owned Subsidiary (WOS)

A WOS is a private company where 100% of the shareholding is held by the foreign parent company. It’s the most preferred structure due to complete operational control and limited liability.

2. Joint Venture (JV)

A JV is a partnership between a foreign company and an Indian entity. It offers local expertise and resource sharing.

3. Liaison Office

A liaison office is set up for non-commercial activities such as market research and brand promotion. It cannot earn income in India.

4. Branch Office

A branch office can engage in commercial activities like consultancy, export/import, and software development. It is regulated under RBI norms.

5. Project Office

Ideal for executing time-bound projects, especially in the infrastructure sector.

Step-by-Step Process for Foreign Company Formation in India

Step 1: Choose the Business Structure

Select from WOS, JV, Branch, Liaison, or Project Office based on your operational goals and industry.

Step 2: Obtain Digital Signature Certificate (DSC) and Director Identification Number (DIN)

DSC and DIN are mandatory for directors of the Indian company.

Step 3: Name Approval

Apply for name approval with the Ministry of Corporate Affairs (MCA) via the RUN (Reserve Unique Name) service.

Step 4: Drafting and Filing Incorporation Documents

Prepare the Memorandum of Association (MoA) and Articles of Association (AoA) along with SPICe+ forms.

Step 5: PAN, TAN, and Bank Account

Apply for Permanent Account Number (PAN), Tax Deduction and Collection Account Number (TAN), and open a corporate bank account.

Step 6: Foreign Investment Reporting

Report inward remittances to RBI through the Single Master Form (SMF) on the FIRMS Portal.

Step 7: GST Registration and Other Licenses

Apply for GST, Import Export Code (IEC), and sector-specific licenses if applicable.

Key Legal and Regulatory Bodies

• Ministry of Corporate Affairs (MCA)
  
  
• Reserve Bank of India (RBI)
  
  
• Securities and Exchange Board of India (SEBI)
  
  
• Department for Promotion of Industry and Internal Trade (DPIIT)
  
  

Documents Required for Foreign Company Registration

• Identity proof and address proof of directors
  
  
• Passport of foreign directors (notarized/apostilled)
  
  
• Board resolution for investment
  
  
• Proof of registered office in India
  
  
• MoA and AoA
  
  
• Form FC-1, FC-2, or FC-3 for foreign office setups
  
  

Taxation and Compliance for Foreign Companies in India

Foreign entities must comply with the Income Tax Act, GST Act, FEMA regulations, and annual compliance as per the Companies Act, 2013.

Key Compliance Requirements:

• Annual financial statements filing (Form AOC-4 and MGT-7)
  
  
• Statutory audit under Companies Act
  
  
• Filing of Form FC-GPR for foreign remittances
  
  
• Transfer pricing regulations for inter-company transactions
  
  

Industries Attracting Foreign Companies in India

• Information Technology
  
  
• E-commerce
  
  
• Renewable Energy
  
  
• Pharmaceuticals
  
  
• Infrastructure & Construction
  
  
• Fintech and Financial Services
  
  

Top Foreign Companies in India List (Illustrative)

• Google India
  
  
• Microsoft India
  
  
• Amazon India
  
  
• Unilever
  
  
• Apple
  
  
• Samsung
  
  
• PepsiCo
  
  
• Siemens
  
  
• Nestlé
  
  
• Sony
  
  

These companies represent successful foreign company set up in India, leveraging both urban and rural markets effectively.

Why Choose ADY & Co. Chartered Accountants?

At ADY & Co., we are committed to making your Foreign company registration seamless and legally compliant. Led by CA Yogesh Kumar, our firm has helped 1000+ businesses establish a foreign company in India since 2012.

Our Services Include:

• End-to-end company formation assistance
  
  
• RBI and FEMA compliance
  
  
• Tax structuring and GST advisory
  
  
• Intellectual Property Rights (IPR) registrations
  
  
• Transfer Pricing audits and compliance
  
  
• Regulatory licensing (FSSAI, MSME, IEC, etc.)
  
  
• Payroll and HR advisory for foreign employees
  
  

Challenges Faced by Foreign Companies in India & How We Help

Regulatory Complexity

India’s legal system can be complex. We simplify it for you with expert navigation of MCA, RBI, and Income Tax protocols.

Banking and Foreign Exchange

We help set up authorized dealer (AD) bank accounts and ensure smooth currency repatriation in line with RBI norms.

Cultural & Legal Differences

Our team bridges the cross-cultural legal gaps, enabling smooth onboarding and team alignment in India.

Conclusion: Establish Your Foreign Company in India with Confidence

India’s strategic location, digital economy, and government support make it a goldmine for foreign investments. However, a successful foreign company set up in India requires expert guidance, precise documentation, and ongoing compliance.

ADY & Co. Chartered Accountants, led by CA Yogesh Kumar, ensures your entry into the Indian market is smooth, lawful, and growth-oriented. We bring over a decade of proven experience to your business journey.