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Have you asked your friends or searched on Google, and still feel confused about what you need to set up a foreign company in India? The structure is not complex, but it is designed to deliver the best results for you. That’s why it is important to clearly understand why you want to set up your company in India and which structure suits your objective.
It is also important to understand that starting a company in India requires compliance with the Companies Act, 2013, which governs company incorporation, management, and various legal obligations.
In this article, we will cover all the essential and important aspects you need to know and prepare for when setting up your company in India through checklists you need for company incorporation in India.
Table of Contents
Overview of Company Incorporation in India
Foreign nationals can set up a company in India through a largely online incorporation process. However, one of the most common questions raised by foreign entrepreneurs relates to the regulatory requirements and key checklists that must be fulfilled before entering India and initiating business operations.
Let’s understand these requirements in detail:
what are foreign companies in India?
A foreign company is a company that is registered outside India but has a business presence in India. So, even if the company is incorporated abroad, once it operates or does business in India, it is treated as a foreign company under Indian law.
In simple terms, when a company incorporated outside India establishes a place of business in India, the structure or presence so created is treated as a foreign company under Indian law.
Features of Foreign Companies in India:
- It has a place of business in India, whether by itself or through an agent, physically or through electronic mode; and
- It conducts any business activity in India in any manner.
u/s 2(42)/ of the Companies Act 2013
Types of Foreign Companies in India:
Here are the following types of companies under the Companies Act by which foreigners can set up:
| Type | Meaning |
| 1. Liaison Office | A representative office set up by a foreign company to act as a communication channel between its head office abroad and parties in India. It cannot undertake any commercial or income-generating activities and must meet expenses through inward remittances. |
| 2. Branch Office | An office established by a foreign company in India to undertake permitted commercial or business activities, while remaining legally an extension of the foreign parent company. |
| 3. Project Office | A temporary office is established in India to execute a specific project or contract, typically in sectors such as construction, infrastructure, or turnkey projects. It is closed upon completion of the project. |
| 2. Wholly Owned Subsidiary | An Indian company incorporated under the Companies Act, 2013, in which 100% of the shareholding is held by a foreign parent, subject to the FDI policy. It is a separate legal entity and not a foreign company. A Private Limited Company or Public Limited Company incorporated in India, subject to the FDI policy. |
| 3. Joint Venture | An Indian company incorporated jointly by a foreign entity and an Indian partner is used particularly where sectoral FDI caps or conditions apply. It is governed as an Indian company |
Key Checklist for Setting up a Foreign Company in India
Here is the detailed checklist for foreign company registration in India of each type:
1. Liaison Office/ Branch Office/ Project Office
- RBI Approval
- Prior approval from the RBI under FEMA is mandatory before registration in India.
- ROC Registration
- File Form FC-1 with the Registrar of Companies within 30 days of establishing the Liaison Office
- Registration under Section 380 of the Companies Act, 2013
- Mandatory Documents
- Certificate of Incorporation of a foreign company
- MOA/AOA or charter documents
- RBI approval letter
- Details of directors and the Indian office address
- Authorized Representative
- Appointment of an authorized person in India
- Power of Attorney in favor of the Indian representative
- Annual Compliance
- File Form FC-3 (financial statements) and Form FC-4 (annual return)
- Accounts to be audited by an Indian CA
- Maintain separate books of accounts for the project in case of the Project Office
- Project Office to be closed after completion of the project
2. Wholly Owned Subsidiary
- Incorporation under the Companies Act, 2013
- Incorporate a Private Limited Company or Public Limited Company in India
- 100% shareholding held by the foreign parent (subject to FDI policy).
- Director & Shareholder Requirements
- Minimum 2 directors (at least one resident in India)
- Minimum 1 shareholder (foreign company allowed)
- Statutory Registrations
- PAN, TAN
- MOA and AOA
- DSC, DIN
- Name approval through SPICE + Form
- Registered office address in India
- Company bank account
- FDI & FEMA Compliance
- Compliance with sectoral FDI limits
- FDI entry route (automatic / approval)
- Annual FLA Return (mandatory FEMA compliance)
- Filing of FC-GPR for share allotment, if applicable
- Ongoing Compliances
- Annual ROC filings (AOC-4, MGT-7 / MGT-7A)
- Statutory audit
- Income Tax Return and other applicable registrations (GST, PF, ESIC, etc.)
3. Joint Venture
- JV Structure & Agreement
- Incorporation of an Indian company jointly with an Indian partner
- Shareholding, control, and management are defined through the JV / Shareholders’ Agreement
- FDI Policy Compliance
- Used where 100% FDI is not permitted
- Compliance with sector-specific caps and conditions
- Incorporation & ROC Filings
- Incorporation under the Companies Act, 2013
- Filing of incorporation documents and statutory registers
- Management & Governance
- Board composition as per the agreement
- Reserved matters and voting rights are clearly defined
- Ongoing Compliance
- Annual ROC filings and statutory audit
- FEMA reporting for foreign investment
- Tax and regulatory compliance as an Indian company
Key Checklist for Overall Documents Required by a Foreign National/ Foreign Company:
Here is the list of major documents generally required for foreign nationals or foreign companies entering India to set up the above-mentioned types of business structures:
| Checklist | Details |
| 1. Mandatory Entry Documents | (As per Indian Immigration & Visa Regulations)
|
| 2. Business Specific Documentation | (Required for visa, RBI, ROC, and bank-related processes)
Foreign company documents must be notarized and apostilled/consularized as per Indian requirements. |
| 3. Financial and Personal Documents | (Often required for visa approval, bank account opening, and RBI filings)
|
| 4. Documents for Directors | For Indian Director:
(As per Companies Act, 2013)
For Foreign Director: (As per Companies Act, FEMA & MCA rules)
|
The exact set of documents may vary depending on the chosen business structure, the sector in which the business operates, and whether the proposed activity falls under the Automatic Route or the Government Approval Route under the FDI policy.
However, keeping the above documents prepared in advance helps ensure a smooth visa process, quicker incorporation, and timely regulatory approvals in India.
Conclusion
Entering the Indian market can open massive growth opportunities—but only if it’s done the right way. Missing approvals, choosing the wrong structure, or ignoring compliance can lead to delays, penalties, and costly setbacks. With the right checklist, proper documentation, and timely compliance under the Companies Act, FEMA, and FDI rules, setting up a foreign company in India becomes smooth, safe, and future-ready. Plan it well, and India can truly work in your favor.
How can Mercurius help?
At Mercurius, we assist foreign nationals and foreign businesses in successfully setting up their company in India.
Our team of professionals supports you with Indian director requirements, company registration, and end-to-end incorporation assistance. From preparing and filing applications to completing the setup of your foreign company in India, we manage the entire process smoothly.
Beyond incorporation, our support continues with post-setup compliances, including accounting, auditing, taxation, employee hiring, payroll, and ongoing statutory filings in India.
We take care of the compliance requirements so that you can focus on growing your business.
For more information, contact our professionals or book a free consultation with us.
