Foreign company registration options in India.

Written by Acclime India,

updated 28 April 2026.

Foreign company registration options in India

Contents

Entry options
Registration requirements
Wholly owned subsidiary company
Joint venture
Liaison/representative office
Branch office
Project office

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Contents

Entry options
Registration requirements
Wholly owned subsidiary company
Joint venture
Liaison/representative office
Branch office
Project office

India permits foreign companies to establish a business presence through several registration options, each with different ownership structures, regulatory requirements and operational frameworks. Foreign Direct Investment (FDI) policy reforms have expanded the sectors open to foreign participation and simplified approval processes in many industries.

This article covers the registration options available to foreign companies in India, including subsidiary companies, branch offices, liaison offices and limited liability partnerships.

Key takeaways

Foreign businesses can enter India through wholly owned subsidiaries, joint ventures, liaison, project or branch offices.
Key requirements include ROC registration, PAN/TAN, GST registration and RBI approvals under FEMA.
A wholly owned subsidiary offers full control but requires compliance with FDI policies and corporate regulations.
Joint ventures are ideal for restricted sectors, allowing foreign companies to partner with Indian entities and share risks.
Liaison and branch offices are suitable for non-commercial activities like market research and business representation.

Entry options for foreign businesses and investors

India offers a variety of entry options for foreign businesses and investors, each tailored to specific business needs and strategies. Depending on the level of control, investment and operational presence required, foreign companies can choose from the following options:

Wholly owned subsidiary (100% Indian subsidiary)
Joint venture (JV)
Liaison office/Representative office
Project office
Branch office

Each of these entry options has its own requirements and benefits, and choosing the right one depends on the foreign company’s objectives, the industry sector and regulatory considerations.

Basic registration requirements

To successfully establish any of the above-mentioned business structures in India, foreign companies must complete several essential registrations and obtain approvals. These requirements ensure compliance with Indian laws and enable smooth operations.

The key registrations include:

Registration with the Registrar of Companies (ROC) under the Ministry of Corporate Affairs (MCA) is mandatory for all companies. The ROC is the nodal authority responsible for issuing the Certificate of Incorporation (COI) or the Certificate of Establishment of Place of Business in India, thereby providing legal recognition to the business entity in India.
The Permanent Account Number (PAN) is a tax number required for income tax filing purposes, while the Tax Deduction and Collection Account Number (TAN) is related to withholding tax and is necessary for businesses to deduct/collect taxes at source.
Registration under the Shops and Establishment Act is needed to regulate working hours, conditions and employee welfare within the business. It is a requirement for businesses operating physical premises in India.
If the business intends to import or export goods or services, it must obtain an Import Export Code (IEC) issued by the Directorate General of Foreign Trade (DGFT).
Goods and Services Tax (GST) registration is mandatory for businesses with a turnover above a specified threshold. This registration allows businesses to charge GST on goods and services and claim input tax credits.
Businesses must obtain approval and comply with the Reserve Bank of India (RBI) regulations under the Foreign Exchange Management Act (FEMA) and the FDI policy for foreign investments and transactions, ensuring adherence to India’s foreign exchange laws.

These are the core registration requirements, but additional approvals or licences may be needed depending on the type of business and industry.

Wholly owned subsidiary company

This option allows foreign companies to establish a fully owned entity in India, offering complete control over operations and decision-making. A wholly owned subsidiary is ideal for businesses that want full ownership and autonomy without needing a local partner. It is subject to the regulations outlined in the Companies Act of 2013.

Criteria for a set-up	No minimum authorised and paid-up capital requirements Minimum of two shareholders Foreign direct investment is subject to FDI Policy and compliances under FEMA, 1999
Permitted activities	All business activities, including those in the manufacturing, marketing, and service sectors, are permitted. Where 100% foreign direct investment is allowed, no prior RBI approval is required.
Registration process	The appropriate company structure for incorporating a foreign subsidiary in India must be selected. A Director Identification Number (DIN) must be obtained from the MCA for each director through an online application. Since the registration process is conducted online, a digital signature certificate (DSC) is required for the proposed directors. This certificate is used to electronically sign the required documents. A unique name for the subsidiary must be chosen and approved via the MCA’s online portal, ensuring compliance with the prescribed naming guidelines. The Memorandum of Association (MoA) and Articles of Association (AoA) must be prepared in accordance with the Companies Act 2013, outlining the company’s objectives, rules, and regulations. After name approval, the incorporation documents, including the MoA, AoA, and other required forms, must be filed with the ROC via the MCA’s online portal. This process is typically completed using the SPICe+ form. The necessary registration fees must be paid to the ROC based on the subsidiary’s authorised capital. Once the submitted documents are verified, the ROC will issue a COI, officially confirming the subsidiary’s registration in India. For tax compliance, PAN and TAN will be automatically generated within a week of company incorporation and will be sent by the authorities to the registered email address. A corporate bank account must be opened in the name of a foreign subsidiary in India. Additional legal and regulatory requirements must be followed beyond the company registration process. If the subsidiary engages in taxable business activities, GST registration is required to ensure compliance with taxation laws in India.
Set up time	Four to eight weeks

Advantages of a wholly owned subsidiary

Simpler reporting mechanisms allowing the parent firm to consolidate financial statements into a single report
Increased financial resources as the subsidiary’s earnings contribute to the parent company’s funds
Overall cost reduction through the integration of financial systems and IT
Greater control, as the parent company retains full authority over strategic and operational decisions

Disadvantages of a wholly owned subsidiary

Additional tax burden on the parent company due to taxation on subsidiary earnings
Complex paperwork and legal procedures
Direct impact on the parent company in case of subsidiary losses

Joint venture

In cases where 100% FDI is not permitted, a JV with an Indian company can be an effective way to enter the market. This allows foreign investors to partner with local businesses, sharing resources, risks and expertise. JVs are common in sectors like retail, telecommunications and defence, where local knowledge and government restrictions may require a domestic partner.

Criteria for a set-up	No minimum authorised and paid-up capital requirements JV agreement/Memorandum of Understanding to be executed Two or more persons/entity FDI is subject to FDI Policy and compliances under FEMA, 1999.
Permitted activities	All activities permitted under FEMA either in automatic route or approval route and as agreed in the Agreement.
Registration process	The foreign entity must collaborate with a suitable Indian partner who aligns with the joint venture’s objectives and brings relevant local expertise. A detailed joint venture agreement must be prepared to outline the JV’s purpose, structure, capital contributions, profit-sharing arrangements, management responsibilities and dispute-resolution mechanisms. The appropriate legal structure for the JV must be determined. This could include options such as a Private Limited Company, Limited Liability Partnership (LLP) or a Partnership Firm. The chosen legal structure will influence the registration process, regulatory obligations and liability aspects. Approvals from relevant authorities, such as the MCA, RBI and sector-specific regulators, must be obtained. For foreign investments, compliance with the FEMA and obtaining Foreign Investment Promotion Board (FIPB) clearance may also be required. The JV must be registered under the chosen legal structure with the ROC or the Registrar of Firms, as applicable. This process includes obtaining a DSC and DIN and filing the necessary incorporation documents. After incorporation, applications must be submitted to the Income Tax Department for obtaining a PAN and a TAN. If the joint venture engages in taxable activities, GST registration is also required. Following the receipt of the approval letter, a corporate bank account must be opened in the name of the joint venture to facilitate financial transactions and capital contributions. The foreign entity should ensure compliance with industry-specific regulations, labour laws, environmental standards and other statutory requirements relevant to the joint venture’s operations. The foreign entity should consider registering any intellectual property (IP) associated with the joint venture, such as trademarks, patents or copyrights, to safeguard proprietary assets.
Set up time	Four to eight weeks

Advantages of a joint venture

Access to the marketing and distribution channels of an Indian partner
Availability of financial resources from the local partner
Established contacts of the Indian partner simplify business setup
Risk-sharing mechanism reduces individual exposure to liabilities

Disadvantages of a joint venture

Potential disputes due to differing partner expectations
Imbalance in investment and expertise between partners
Unequal resource distribution affecting operations
Diverging management styles and cultural differences may create barriers

Liaison office/representative office

Setting up a liaison or representative office is a feasible option for businesses that do not need to engage in direct commercial activity in India. These offices act as communication channels between the foreign company and its clients or customers in India but cannot generate revenue directly. Their role is limited to promoting the company’s products, conducting market research and coordinating with local stakeholders.

Criteria for a set-up	The applicant’s parent company must have been profitable in its home country in the past three financial years and have a net worth of at least USD 50,000 or its equivalent.
Permitted activities	Representing group companies Promoting export and import from/to India Promoting technical financial collaborations between parent/group companies and companies in India Acting as a communication channel between the parent company and Indian entity
Registration process	A company seeking to establish a liaison office in India must decide between the RBI or the Government approval route. Prior approval from the RBI is required, typically takes three to four weeks. This can be renewed for an additional three years upon expiration. The company must submit the prescribed application form along with all necessary documentation to an Authorised Dealer (AD) bank in India. Under FEMA, 1999, two approval routes are available: Automatic route: Applicable if the foreign entity’s business qualifies for 100% FDI. Approval route: Required if the business falls outside the scope of automatic approval. Based on the chosen route and sector, the RBI, in consultation with the Ministry of Finance, reviews the application and grants approval. A Unique Identification Number (UIN) is assigned to the Liaison Office upon approval. The company must register the Liaison Office with the MCA and the ROC. Once registered, it must obtain a Certificate of Establishment of Place of Business from the ROC. The Liaison Office must submit annual reports and maintain accurate financial records to maintain compliance. It must also obtain a TAN and a PAN for tax compliance.
Set up time	Six to eight weeks

Advantages of a liaison office

Simple set-up process
Not subject to taxation in India
Indian transfer pricing regulations do not apply to transactions conducted between liaison offices and the overseas parent company
Able to coordinate quality control of buying and sourcing activities in India
Less ongoing formalities when compared to other business entities

Disadvantages of a liaison office

Not permitted to conduct any commercial or industrial activities in India
Unable to engage in import and export activities directly
Not permitted to generate any income in India

Branch office

A branch office is an extension of the parent company, providing a flexible structure for foreign companies to conduct business in India. Branch offices can engage in activities such as marketing, wholesale trading, research and providing services but cannot undertake manufacturing. This option is ideal for businesses looking to test the market or expand their presence without forming a fully independent subsidiary.

Criteria for a set-up	The non-resident entity applying should have a minimum net worth of USD 100,000 or its equivalent. The applicant’s parent company must demonstrate a profit track record in the home country during the preceding five fiscal years.
Permitted activities	Branches open in India by a foreign company must conduct similar activity as in the home country. Branches are allowed to do the following activities: Representing parent company in India and acting as buying/selling agent in India Export/import of goods (only on wholesale basis) Rendering professional and consultancy services. Rendering IT services, software services Services not permitted in branch office: Construction and development activities Manufacturing and processing Retail trading
Registration process	To establish a branch office in India, a company must apply to the RBI through an AD bank, which acts as an intermediary. The application must include key documents such as the parent company’s board resolution, certificate of incorporation, and details of the branch’s activities. The parent company must provide Know Your Customer (KYC) details from its bank, including a recommendation letter and financial records. The AD Bank verifies these to assess the company’s financial stability. If the branch’s activities do not qualify for automatic approval, prior RBI permission is required, with a detailed justification submitted for review. Once RBI approval is granted, the company must register the branch office with the ROC in the relevant state and submit the necessary documents and fees. Following registration, the branch office must obtain a PAN for tax compliance and a TAN for withholding tax, and it must open a bank account in India. If engaged in commercial activities, the branch office must register for the GST. If involved in importing or exporting, it must obtain an IE code from the DGFT.
Set up time	Six to eight weeks

Advantages of a branch office

Greater control for the parent company, as decision-making remains centralised
Maintains the parent company’s brand value by operating under the same name

Disadvantages of a branch office

Higher tax rate compared to an Indian subsidiary
Restricted to activities specified in its constitution
Financial dependency on the foreign head office if expenses exceed revenue
Lengthy and costly approval process, requiring RBI clearance, which takes 45 to 60 days

Project office

This structure is suitable for foreign companies undertaking specific projects in India, such as construction or infrastructure development. A project office is set up for the duration of the project and is required to comply with the regulations under FEMA. It allows businesses to operate temporarily without establishing a permanent presence in the country.

Criteria for a set-up	Obtain a contract from an Indian business to conduct a project in India. The project must secure the required regulatory approvals, and is directly funded by remittances received from overseas. Alternatively, the project is sponsored by a firm, a bilateral or multilateral international financing agency or a bank of India
Permitted activities	Execution of a project in India and activities relating to execution of a project The project office cannot lend money to any person in India or undertake any activity other than project execution. Transfer of funds inter-se projects not allowed, except with RBI permission
Registration process	To establish a project office in India, a company must prepare key documents, including the Memorandum and Articles of Association, a board resolution or Power of Attorney authorising the office, a letter of intent, a copy of the project award document, financial statements for the past three years, and a reference letter from its banker. The company must submit the prescribed application form along with the required documents to an AD Category-I bank, which acts as an intermediary with the RBI. The AD Category-I bank forwards the application to the RBI’s General Manager to obtain a UIN for the project office. Upon reviewing the application and verifying compliance, the AD Category-I bank grants approval in the form of an official letter, allowing the company to establish the project office. Within 30 days of establishment, the company must electronically file a form with the RBI detailing the project office’s operations. After receiving approval, the project office must open a bank account with an AD Category-I bank for financial transactions. The project office must comply with Indian regulations, including professional tax registration, GST registration, compliance with the Employees’ State Insurance Corporation (ESIC) and provident fund obligations.
Set up time	Four weeks

Advantages of a project office

Maintains the parent company’s brand value by operating under the same name
Facilitates project completion

Disadvantages of a project office

Prohibited from lending money or engaging in activities beyond project execution
Fund transfers between projects require RBI approval
Operations must cease upon project completion

Conclusion

Setting up a business in India offers multiple entry options, each catering to different operational needs and regulatory requirements. While wholly owned subsidiaries and JVs provide a more permanent and flexible presence, liaison offices, branch offices and project offices serve specific, limited functions. Choosing the right structure depends on business goals, industry regulations and investment preferences. With India’s dynamic economy and evolving policies, foreign businesses can find significant opportunities, provided they manage the legal and compliance framework effectively. Proper planning and expert guidance can make the setup process smoother and more efficient.

How Acclime can help with setting up a company in India

Acclime India offers complete support related to company incorporation and compliance management. From understanding entry options for foreign businesses to assisting with the necessary registrations, our team of experts can assist with everything from setting up a wholly owned subsidiary to navigating joint ventures. By partnering with us, foreign businesses can confidently establish their presence in India while ensuring full compliance with local regulations. Contact us to learn more about how we can support your needs in company registration, tax compliance and ongoing regulatory adherence.

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