India Entry Services for Foreign Investors Choose the Right Structure For Your Business

They are the advisory and filing work that gets a foreign business lawfully established 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 under 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. 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.

No. It is an Indian company, whoever holds its shares, because Section 2(42) turns on the place of incorporation. The Ministry of Corporate Affairs confirms that such a subsidiary needs no registration under Sections 379 to 393, and that an Indian company acquired outright by a foreign company does not become a foreign company either.

Section 2(87) of the Companies Act, 2013 sets out two tests: control of the composition of the Board or control of more than one-half of the total voting power. Explanation (c) confirms that the holding body corporate may be one incorporated outside India. Neither test looks at the amount invested.

That depends on which are open to you rather than on a general ranking, and this page deliberately carries no timelines. An entity route in an automatic-route sector does not require Reserve Bank approval, whereas every office route runs through an Authorized Dealer Category-I bank under Regulation 4(c). Each structure’s page carries its own timeline.

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 three-year profit record and a net worth of at least USD 50,000.

Not necessarily. Regulation 4(f) allows a project office under a general permission where you have secured a contract from an Indian company to execute a project in India, and one of the four funding conditions is met. It is the only office route with no net worth or profit-record threshold.

The sector usually decides it. Paragraph 3.2.4 of the Consolidated FDI Policy Circular of 2020 permits foreign investment in an LLP only where 100% foreign direct investment is allowed on the automatic route with no FDI-linked performance conditions. A company faces no such gate, only its own sectoral cap and entry route.

When the sector carries a cap below 100% in the Schedule I Table of the NDI Rules, 2019. Below that ceiling,g you need Indian shareholding to complete the cap. Where the sector is 100% automatic, a partner is a commercial choice about market access, not a legal requirement.

Yes. The Reserve Bank permits an upgrade where the overseas entity is eligible to open a branch under the general permission upon advice to its Central Office Cell. The existing Permanent Account Number and bank account can remain in effect when the account is re-designated as a branch account.

No, not under the automatic route. The Reserve Bank has answered that question directly. It has also confirmed that a Letter of Comfort from an Indian parent company is not acceptable to cure a shortfall in the applicant’s own net worth or profit record.

An Authorized Dealer Category-I bank, under Regulation 4(c) of FEMA 22(R)/2016-RB, applying the Reserve Bank’s directions. The Reserve Bank itself decides only the cases listed in Regulation 5, and those are considered in consultation with the Government of India.

No. Regulation 5(b) requires the Reserve Bank’s prior approval only where the application is for an office in Jammu and Kashmir, the North East region, or the Andaman and Nicobar Islands. The Reserve Bank has confirmed that elsewhere, the Authorized Dealer Category-I bank may permit the application without a reference to it.

Yes. Regulation 4(c) cancels the approval if no office is opened within six months of the approval letter. Where the delay is due to reasons beyond your control, the Authorized Dealer Category-I bank may grant a further six months, and 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, research in the parent’s field, promoting collaborations, acting as a buying or selling agent, software development, technical support for the parent’s products, and representing a foreign airline or shipping company. Regulation 4(b) bars anything else.

No. Following the Supreme Court’s decision in Bar Council of India v. A.K. Balaji, the Reserve Bank has directed Authorized Dealer Category-I banks not to approve any branch, project, liaison office, or any other place of business for practicing the legal profession in India.

Three years under Regulation 4(d), and the Authorized Dealer Category-I bank may extend it for three years from expiry. A non-banking finance company or an entity in the construction and development sector is granted only two years, with no further extension, and must then close or convert into a joint venture or a wholly owned subsidiary.

They are separate tests with separate authorities. Rule 6(a) of the NDI Rules, 2019, as substituted with effect from 2 May 2026, sends the investment to the government route based on beneficial ownership. Regulation 5 of FEMA 22(R)/2016-RB decides whether a place of business needs the Reserve Bank’s prior approval. A structure can trigger one, both, or neither.

A branch is taxed as a company other than a domestic company at 35% on income not taxed at special rates, plus a surcharge and a 4% health and education cess. A subsidiary is resident by incorporation under Section 6(10) of the Income-tax Act, 2025 and taxed as a domestic company, with an option to elect the 22% rate in Section 200.

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

No. Neither the Companies Act, 2013, nor the FEM (Non-Debt Instruments) Rules, 201,9 prescribes a floor. This is one of the clearest contrasts with the office routes, where Regulation 4(a) sets hard net worth figures of USD 100,000 for a branch and USD 50,000 for a liaison office.

No. Regulation 2 of FEMA 22(R)/2016-RB requires a liaison office to maintain itself out of inward remittances received from abroad through normal banking channels. Earning income in India would put it outside the definition of a liaison office altogether.