FAQs on Foreign Company Registration in India: 25 Crucial Questions Answered

Typically, if all documents are perfectly in order and notarized/apostilled correctly from the home country, the incorporation process (obtaining the Certificate of Incorporation, PAN, and TAN) takes about 3 to 4 weeks. Opening a bank account and bringing in FDI may take an additional 2 to 4 weeks.

When dealing with FAQs on foreign company registration in India, documentation is a major hurdle. Standard requirements include:

• Certificate of Incorporation/Registration of the parent company.
• Board Resolution authorizing the investment in India and appointing an authorized representative.
• Address proof of the parent company.

Note: All documents originating outside India must be notarized and apostilled (or consularized) in the home country.

No, physical presence is not mandatory for the initial incorporation process. The process is entirely online via the MCA portal. Documents can be signed, notarized/apostilled in the foreign country, and couriered to India. However, the resident director must be present in India to fulfill the residency requirement.

DIN (Director Identification Number): A unique, lifetime identification number allotted to an individual appointed as a director.

DSC (Digital Signature Certificate): A secure digital key issued by certifying authorities to validate the identity of the person signing MCA forms online. Both are mandatory for all proposed directors, including foreign nationals.

Yes, subject to availability. If a foreign company is setting up a subsidiary, it can use its original name by adding "India Private Limited" or a similar suffix. To reserve the identical name, a No Objection Certificate (NOC) in the form of a Board Resolution from the foreign parent company is required. This is a very common topic among FAQs on foreign company registration in India.

If operating as a Branch Office/Project Office (a foreign entity), the corporate tax rate is generally 40% (plus applicable surcharge and cess). However, if a foreign company registers an Indian subsidiary (a domestic company), the base corporate tax rate is 25% (or 22% / 15% under specific concessional tax regimes like Section 115BAA/115BAB, subject to conditions). This significant tax difference is why WOS is often favored.

GST registration is mandatory if your annual turnover exceeds Rs. 20 Lakhs (for services) or Rs. 40 Lakhs (for goods) in most states. It is also mandatory irrespective of turnover if you are involved in inter-state supply, e-commerce, or are a casual taxable person. Addressing tax compliance is vital when exploring FAQs on foreign company registration in India.

Yes. India has a liberalized remittance scheme. A WOS can freely repatriate dividends to its foreign parent after payment of applicable Dividend Distribution Tax (if any, as per current laws which tax dividends in the hands of shareholders) and ensuring compliance with the Foreign Exchange Management Act (FEMA). Branch Offices can remit profits net of applicable Indian taxes.

An Indian subsidiary must comply with various regulations annually, including:

• Holding Annual General Meetings (AGM) and Board Meetings.
• Filing Annual Returns (AOC-4 and MGT-7) with the MCA.
• Statutory Audit of financial statements.
• Filing Income Tax Returns.
• FEMA compliances (like FLA return) regarding foreign investment.

Transfer Pricing regulations are critical. Any transaction (sale/purchase of goods, services, loans) between the Indian subsidiary and the foreign parent (or associated enterprises) must be conducted at an 'Arm’s Length Price'. You must maintain proper documentation and file an Accountant’s Report (Form 3CEB) annually. This is a complex area we frequently address in our FAQs on foreign company registration in India.

An LO is a representative office that acts as a communication channel between the principal place of business abroad and entities in India. Crucially, it cannot undertake any commercial, trading, or industrial activity directly or indirectly. Its expenses must be entirely met through inward remittances from the foreign parent.

Unlike an LO, a Branch Office can undertake specified commercial activities, such as export/import of goods, rendering professional or technical services, carrying out research, and acting as a buying/selling agent for the parent company. However, it cannot engage in manufacturing directly (though it can sub-contract). Understanding this distinction is key to answering FAQs on foreign company registration in India.

Yes, RBI sets track record criteria. For an LO, the foreign entity must have a profitable track record during the immediately preceding 3 years and a net worth of at least USD 50,000. For a BO, the track record must be 5 years with a net worth of at least USD 100,000.

A PO is set up strictly to execute a specific project contract secured by a foreign company from an Indian entity. It cannot undertake any activities outside the scope of that specific project. The funding must come from inward remittance or a bilateral/multilateral international financing agency.

Applications (Form FNC) are processed by an Authorized Dealer (AD) Category-I bank in India. Depending on the sector and country of origin, the AD bank may process it under the automatic route or forward it to the RBI for prior approval.

A foreign company that has established a Branch Office or other place of business in India (excluding a Liaison Office) can acquire immovable property necessary for carrying on its business. However, entities from certain neighboring countries require prior RBI approval. An Indian Subsidiary (WOS), being an Indian entity, can buy property subject to sector-specific FDI rules.

Once the entity is registered and PAN is issued, you can open a bank account with any authorized AD bank in India. KYC for foreign directors can be strict, often requiring apostilled identity and address proofs, and sometimes video KYC or physical presence by the resident director. This operational step is a crucial part of our FAQs on foreign company registration in India.

Foreign nationals must obtain an Employment Visa (E-Visa) to work in India, which requires a minimum salary threshold (currently USD 25,000 per annum, with some exemptions for ethnic cooks, language teachers, etc.). They must register with the Foreigners Regional Registration Office (FRRO) if their stay exceeds 180 days. They are also subject to Indian Income Tax on salary earned for services rendered in India.

Yes, significantly. As per Press Note 3 (2020), an entity of a country that shares a land border with India (or where the beneficial owner is situated in or is a citizen of such a country) can invest only under the Government Route. This means prior government approval is mandatory before investing, regardless of the sector. This has become one of the most critical FAQs on foreign company registration in India recently.