Your options for entering India
| Structure | Best for | Key points |
|---|---|---|
| Private limited subsidiary | Most foreign companies: sales, engineering, GCCs | Foreign investment under the automatic route in most sectors; limited liability; can raise equity and issue ESOPs |
| LLP | Service businesses that want simpler governance | Foreign investment allowed only in sectors open to 100% FDI under the automatic route without performance conditions |
| Branch office | Foreign companies that need to operate as the same legal entity | Set up through an authorised dealer bank under RBI rules; taxed as a foreign company |
| Liaison office | Market research and representation only | No commercial activity or income in India |
| Project office | A specific contract in India | Limited to executing that project |
RBI issued draft regulations in October 2025 to simplify how foreign companies open branch and liaison offices; until they are finalised, the existing regulations apply.
Tax at a glance
- India’s Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026.
- An Indian subsidiary can opt for a 22% base rate (about 25.17% with surcharge and cess) in exchange for giving up most deductions.
- A branch of a foreign company is taxed at 35% plus surcharge and cess.
- Payments between the Indian entity and the parent — services, royalties, interest, dividends — follow India’s treaty with the parent’s country and transfer-pricing rules.
Compliance from day one
- Resident director: every Indian company needs at least one director who stays in India for at least 182 days in the financial year.
- FC-GPR: report shares issued to the foreign parent on RBI’s FIRMS portal within 30 days of allotment. See the FC-GPR guide.
- FLA return: the annual foreign liabilities and assets return, due by 15 July.
- Transfer pricing: intercompany charges at arm’s length, an intercompany agreement and an annual accountant’s report — see transfer pricing.
- GST, TDS, payroll and ROC filings on a monthly and annual calendar.
How we set you up
01
Structure
Entity choice, sector check under the FDI policy, tax model and a resident-director plan.
02
Incorporate
Name approval, incorporation, PAN/TAN, bank account, capital inflow and FC-GPR.
03
Run
Books, payroll, GST, TDS, transfer pricing and monthly reporting to the parent — as your Virtual CFO.
Setting up a GCC or offshore team
Many foreign companies set up an Indian subsidiary as a captive engineering, operations or finance centre, billing the parent on a cost-plus basis. That brings specific questions — the transfer-pricing markup, safe harbour, GST on exported services and hiring. Read setting up a GCC in India.
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Frequently asked questions
How can a foreign company set up in India?
Most use a private limited subsidiary under the automatic FDI route. Alternatives are an LLP (only in sectors open to 100% automatic-route FDI without performance conditions), or a branch, liaison or project office set up through an authorised dealer bank under RBI rules.
Does an Indian subsidiary need an Indian director?
Yes. Every Indian company must have at least one director who stays in India for at least 182 days during the financial year.
What is the corporate tax rate for a foreign company's Indian subsidiary?
An Indian subsidiary is a domestic company. It can opt for a 22% base rate, about 25.17% including surcharge and cess, by giving up most deductions. A branch of a foreign company is taxed at 35% plus surcharge and cess.
What must be reported after the foreign parent invests?
Share allotments to the foreign parent must be reported in Form FC-GPR on RBI's FIRMS portal within 30 days, and the company must file the annual FLA return by 15 July.
Can you act as the finance team for our Indian entity?
Yes. After setup, Durgesh's team can run books, payroll, GST, TDS, transfer pricing and monthly reporting to the parent as a Virtual CFO engagement.