Setting up in India: the overall path for foreign companies

How an India entry is usually sequenced

Most entries go wrong in sequence rather than in substance. Groups open a bank conversation before the company exists, hire before payroll registrations are in place, or start charging the Indian company for services before an intercompany agreement is signed. Working in the right order avoids almost all of these problems.

The first decision is the vehicle. For any business that will employ people, sign contracts or invoice customers in India, an Indian private limited company is the normal answer. The second is governance: who sits on the Indian board, who signs, and what the Indian managers may decide without the parent.

After incorporation the work becomes recurring: monthly withholding tax, GST and payroll filings, a statutory audit, annual company-law returns and the RBI's foreign liabilities return. Building that calendar on day one, alongside the parent's own reporting calendar, is what keeps an Indian subsidiary out of late fees and compounding.

The usual path into India

1. 1

   Decide the structure

   Most foreign groups choose a subsidiary; branch, liaison and project offices suit narrower roles.

2. 2

   Prepare home-country documents

   Registry extract or certificate of incorporation, constitution and a board resolution, legalised for India.

3. 3

   Incorporate and fund

   SPICe+ incorporation, bank account, capital remittance, share allotment and the FC-GPR report.

4. 4

   Run the company

   Monthly tax and payroll filings, audit, annual company and RBI returns, and transfer pricing on group charges.

Checklist

• Agree the entity type and the FDI route
• Name the Indian directors, including one resident in India
• Start home-country documents and their legalisation
• Line up the Indian bank in parallel with incorporation
• Draft intercompany agreements before the first charge
• Set up payroll registrations before the first hire

Common mistakes

• Treating incorporation as the finish line rather than the start of the compliance cycle
• Leaving the resident-director question until the filing stage
• Funding the company through informal parent loans
• Running Indian staff through the parent's payroll

How this applies to your country

• USA to India en-US
• UK to India en-GB
• Japan to India en-JP
• Germany to India en-DE
• Singapore to India en-SG
• Australia to India en-AU
• China to India en-CN
• Hong Kong to India en-HK
• Russia to India en-RU
• Spain to India en-ES
• France to India en-FR
• UAE to India en-AE

Our service: Indian subsidiary incorporation