India Entry Services (FDI) for Foreign Investors

They are advisory and filing work that lawfully establishes a foreign business in India. The first and largest part is the structure decision: whether to incorporate an Indian entity or to register the foreign company’s own place of business, which brings the parent within the definition of a foreign company in Section 2(42) of the Companies Act, 2013. Everything else follows that choice.

Three entity routes and three office routes. The entity routes are a wholly owned subsidiary, a joint venture company and an LLP with foreign investment, all under the FDI policy and the NDI Rules, 2019. The office routes are a branch office, a liaison office and a project office, all three governed by FEMA 22(R)/2016-RB.

An Indian entity is a separate legal person that owns its assets and carries its own liabilities. A branch, liaison or project office is the foreign company itself, so its contracts, employees and liabilities are the parent’s. Section 2(42) of the Companies Act, 2013 draws the line by the place of incorporation.

No. It is an Indian company, regardless of who holds its shares, because Section 2(42) of the Companies Act, 2013 defines a foreign company as one incorporated outside India. A company incorporated in India with a foreign parent is outside the foreign-company registration regime of Sections 379 to 393, and an Indian company bought outright by a foreign company does not become a foreign company either.

Yes, both. A private company needs at least two shareholders (Section 3(1)(b), Companies Act, 2013), so the foreign parent usually holds all but one share and a nominee holds the last one for it. The board needs at least two directors, and at least one must have stayed in India for 182 days or more in the financial year (Section 149(1) and (3)). Foreign nationals can hold the other board seats. A foreign individual with no parent company can set up an Indian private company on the same terms.

India received USD 94,836 million in total FDI inflow (equity, re-invested earnings, and other capital) in FY 2025-26, 18% more than the year before, with FDI equity inflow of USD 58,846 million, per the DPIIT fact sheet updated to June 2026 (provisional). The largest equity sources were Singapore, the United States, Mauritius, Japan, the Netherlands, and the UAE.

That depends on which routes are open to you. An entity in an automatic-route sector needs no Reserve Bank or Government approval to form; in Setindiabiz’s filings for foreign promoters, SPICe+ incorporation has usually taken 10 to 15 working days once the DSCs and legalised documents are ready; this is our experience, not an MCA timeline. A government-route proposal goes through the Foreign Investment Facilitation Portal under the DPIIT procedure of 4 May 2026, with time limits totalling 12 weeks. Office routes run through an AD bank, and the bank’s own processing time, plus any Regulation 5 reference to the RBI, sets the pace.

A liaison office, if you qualify. Regulation 2 of FEMA 22(R)/2016-RB confines it to acting as a channel of communication, with no commercial, trading or industrial activity, which is exactly a market-study posture. You will need a profit-making track record in the three preceding financial years and a net worth of at least USD 50,000.

Not necessarily. FEMA 22(R)/2016-RB gives general permission for a project office when you have secured a contract from an Indian company to execute a project in India and meet one of the prescribed funding conditions. It is the only office route with no net-worth or profit-record threshold, and it lasts for the duration of the project.

The sector usually decides it. Schedule VI of the NDI Rules, 2019 permits foreign investment in an LLP only where 100% foreign investment is allowed on the automatic route with no FDI-linked performance conditions. A company faces no such gate; it only faces its own sector cap and entry route under Schedule I.

When a sector has a cap below 100% in Schedule I of the NDI Rules, 2019, Indian shareholding must complete the balance, so a partner is legally required. Where the sector is 100% automatic, a joint venture is a commercial choice for market access, distribution, or local knowledge, not a legal requirement.

Yes. The Reserve Bank’s Master Direction allows a liaison office to be upgraded to a branch office where the foreign company qualifies for a branch, on application through the Authorised Dealer bank, and confirms that the existing PAN and bank accounts can continue once the upgrade is permitted. The branch then files its own annual activity certificate.

An Authorised Dealer Category-I bank, under Regulation 4(c) of FEMA 22(R)/2016-RB, applying the Reserve Bank’s directions. The Reserve Bank decides only the cases listed in Regulation 5: certain applicant countries and locations; the defence, telecom, private security, and information and broadcasting sectors; and foreign government or non-profit applicants.

No. Regulation 5 of FEMA 22(R)/2016-RB requires the Reserve Bank’s prior approval for applicants from China, Hong Kong, Macau, Bangladesh, Sri Lanka, Afghanistan, or Iran only if the office is in Jammu and Kashmir, the North East region, or the Andaman and Nicobar Islands. Elsewhere, the Authorised Dealer bank decides. An applicant from Pakistan needs prior approval in every case.

Yes. Under FEMA 22(R)/2016-RB, the approval lapses if the office is not opened within six months of the approval letter. If the delay is due to reasons beyond your control, the Authorised Dealer bank may allow a further six months; any longer extension requires the Reserve Bank’s prior approval.

Only the eight activities in Schedule I to FEMA 22(R)/2016-RB: export and import of goods; professional or consultancy services (not law); research in the parent’s field; promoting technical or financial collaborations; acting as the parent’s buying or selling agent; IT and software development; technical support for the parent’s products; representing a foreign airline or shipping line.

No. After the Supreme Court’s orders in Bar Council of India v. A.K. Balaji, the Reserve Bank directed Authorised Dealer Category-I banks (A.P. (DIR Series) Circular No. 07 of 23 November 2020) not to approve any branch, project or liaison office or other place of business in India to a foreign law firm for the practice of the legal profession.

Three years, and the Authorised Dealer bank may extend it for a further three years from the date of expiry. A non-banking finance company or an entity in the construction and development sector is granted only two years, with no extension; it must then close or convert into a joint venture or a wholly owned subsidiary.

They are separate tests. Rule 6(a) of the NDI Rules, 2019, substituted with effect from 2 May 2026, sends an investment by an entity or citizen of a country sharing a land border with India, or whose beneficial owner (tested under the Prevention of Money-laundering Act, 2002) is one, to the Government route. Non-controlling beneficial ownership of up to 10% from such a country stays on the automatic route (Press Note 2 of 2026). Regulation 5 of FEMA 22(R)/2016-RB decides whether an office needs RBI prior approval.

A change is proposed but not in force. On 3 October 2025, the Reserve Bank published draft Foreign Exchange Management (Establishment in India of a branch or office) Regulations, 2025, with relaxed eligibility criteria and a principle-based framework. As of 26 October 2026, no final regulations have been notified, so FEMA 22(R)/2016-RB, as amended in 2018 and 2019, still applies.

A branch is taxed as a non-domestic company at 35% on income not taxed at a special rate, plus surcharge and the 4% health and education cess. A subsidiary is resident in India by incorporation and taxed as a domestic company, with the option to elect the 22% rate under Section 200 of the Income-tax Act, 2025.

2% of the income tax where total income exceeds ₹1 crore but not ₹10 crore, and 5% where it exceeds ₹10 crore, with marginal relief so that the surcharge never exceeds the income that crossed the threshold. The 4% health and education cess then applies to the income tax and surcharge together.

No. Neither the Companies Act, 2013 nor the NDI Rules, 2019 prescribes a floor for a subsidiary, a joint venture or an LLP. This contrasts sharply with the office routes, where Regulation 4 of FEMA 22(R)/2016-RB sets the net worth at USD 100,000 for a branch and USD 50,000 for a liaison office.

For an entity route, the equity or capital received from the foreign investor is reported to the Reserve Bank within 30 days of allotment through the Authorised Dealer bank, and an annual return on foreign liabilities and assets follows every year by 15 July. For an office route, the annual activity certificate is filed by 30 September. The allotment is reported in Form FC-GPR (Form LLP(I) for an LLP) on the RBI’s FIRMS portal, and the annual return is the FLA return.