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Setting up Business in India


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Starting Business in India

“India as a Prime Destination for Foreign Business Expansion”

India is one of the most favorable countries for foreign entrepreneurs wanting to expand their businesses or setup a new business in India by formation of a company. In 2022, India got the third-highest Foreign Direct Investment (FDI) for new projects (greenfield projects), showcasing its strong market. The growing trend of foreign investors opting for company registration in India is fueling a significant increase in FDI in the country, leading to a massive influx of capital.

Foreign investors looking to start a business in India must strategically select the entity structure. They should pick the company structure that suits best according to their business requirements. Choosing the right entry structure business setup consultants in India enables companies to establish a strong foothold, thrive, and capitalize on India’s dynamic market landscape.

How can Foreign investors establish a business in India?

Unlock the business opportunities and establish your presence in India. There are several pathways to consider when setting up a business in India.

Indian Company

Entrepreneurs can set up either a Private Limited Company or Public Limited Company, allowing variations like:

  • Wholly owned Subsidiary
  • Joint Venture
  • Ownership by Foreign Resident

Limited Liability Partnership

Combining features of a Partnership Firm and a Company, LLP permits 100% FDI investment through the Automatic Route

Foreign Company

It is the set-up for carrying out Import, Export, Research, and execution of projects. It can be registered as:

  • Branch Office: Engages in Import, Export, Research, and Consultancy activities.
  • Liaison Office/ Representative Office: Represents the foreign parent company in India.
  • Project Office: Operates as per contract of a specific project.


Structure of Business Establishment

Setting up a business in India involves adherence to specific rules and regulations. Refer to the following chart for comprehensive details on how to establish your own company in India.

ParticularsWholly Owned SubsidiaryJoint VentureOwnership by Foreign Individual
AboutA company wholly owned, managed, and controlled by the parent companyAn arrangement between multiple parties forming a separate legal entity, e.g., a Company, LLP,
or partnership
A company wholly owned, managed, and controlled by the foreign individual/s
OwnershipSolely owned by the parent companyShared ownership among entities forming the Joint VentureSolely owned by the foreign individual
Control & ManagementBy Parent companyGoverned collectively by all involved entities through a Joint Venture AgreementBy foreign individual
LiabilityParent company not personally liable for subsidiary’s debts and obligationsEntities share responsibilities jointly or severally based on the agreement for the obligations of
the Joint Venture
Foreign individual not personally liable for Indian company’s debts and obligations

Types of Business Establishment in India

Explore Diverse Business Structures in India: A comprehensive overview of establishment types, compliance essentials, and key criteria for various business entities under Indian law.

ParticularsOne Person Company (OPC)Private LimitedPublic LimitedLLP
Governing Act/ LawCompanies Act, 2013Companies Act, 2013Companies Act, 2013LLP Act, 2008
Separate legal IdentityYesYesYesYes
Defaults LiabilityDirectorsDirectorsDirectorsDesignated Partners
Members Min/Max1/12/2007/No Limit2 Designated Partners/No Limit
Directors Min/Max1/152/15*3/15*2 Designated Partners/No Limit
Resident Director#1 Mandatory (NRI permitted)1 Mandatory1 Mandatory1 Designated Partner
Public Subscription of sharesNot allowedNot allowedAllowedNot allowed
Income Tax Rate**Ranging from 17.16% to 34.94%Ranging from 17.16% to 34.94%Ranging from 17.16% to 34.94%Ranging from 31.20% to 34.94%
(limit based)
The Registration ProcessClickClickClickClick

* After passing a special resolution in a general meeting, a Company may appoint more than 15 directors.
** (including surcharge and education cess)

# Resident Director: Every company should have at least one director who has stayed in India for at least 182 days in the financial year (120 days in the case of LLP and OPC) and in each subsequent year.

Establishment in India: Offices for Foreign Companies – Liaison Office/Branch Office/Project Office

Foreign companies establishing offices in India must adhere to specific rules and guidelines. Here’s an informative guide outlining the key aspects:

Liaison Office (LO) Branch Office (BO) Project Office (PO)
Serves as a communication link between the foreign company’s head office and Indian entities -Not allowed to engage in commercial activities Engages in import/export, professional services, research, technical collaborations, etc. Established for project execution, undertaking related activities
Liaison Office (LO) Branch Office (BO) Project Office (PO)
Foreign entities with a profitable track record for the preceding three financial years and – a net worth of USD 50,000 or more Foreign entities with a profitable track record for the preceding five financial years and – a net worth of USD 100,000 or more Foreign entities securing contracts for project execution
Liaison Office (LO) Branch Office (BO) Project Office (PO)
Typically, 3 years (2 years for NBFCs, construction, and development sectors) Continues until the office closure Duration based on the project
Liaison Office (LO)Branch Office (BO)Project Office (PO)
Not applicableRanging from 41.60% to 43.88 #*Ranging from 41.60% to 43.88 #*

* Depending on the income slab.
# (including surcharge and education cess)

Liaison Office (LO) Branch Office (BO) Project Office (PO)
Not applicable Allowed to remit net of taxes Allowed to remit net of taxes

Initiating a Business: The Registration Journey (Process) Simplified

From obtaining digital signatures to securing critical documentation, here’s an accessible breakdown of the step-by-step registration process for both Companies and Limited Liability Partnerships (LLPs) or you can opt for the business setup consultancy services in India.

Get Digital Signature Certificates for Directors and Shareholders
Check the proposed name with the relevant authority
Check for registered trademark and proposed name conflict
Submit forms for Name Approval
Prepare charter documents
File incorporation forms
Obtain a Certificate of Incorporation
Obtain Tax Registration :
a) Permanent Account Number (PAN)
b) Tax deduction / collection Account Number (TAN)
Open a Bank Account, Deposit initial capital
File relevant form for initiating the business operations
Get Digital Signature Certificates for Designated Partners
Check the proposed name with the relevant authority
File relevant form for Name Approval
Submit forms for incorporation
Obtain a Certificate of Incorporation
Obtain Tax Registration :
a) Permanent Account Number (PAN)
b) Tax deduction / collection Account Number (TAN)
Prepare LLP Agreement
File relevant form for registering the LLP agreement
Open Bank Account, Deposit the initial capital
File relevant form for initiating the business operations

Understanding Business Closure Procedures in India

Here’s a concise breakdown of the closure process in compliance with Indian regulations:

The scenarios for business closure include:


Note: It’s always prudent to double-check the latest regulations and guidelines and reach out to the business setup consultants in India before making decisions regarding business setups or closures. For further assistance or further queries, please get in touch with us anytime. We’re here to help!



Entrepreneurial aspirations among youngsters are rising along with the growing middle class in India. Moreover, technology has opened up many business opportunities and made starting and managing a business easier. Therefore, it is more rewarding than any other time to start a business in India. Following are the points we need to keep in mind for starting a business in India:

  • Choosing a business
  • Business entity registration
  • Bank account opening
  • Tax registration

The factors which are to be considered while choosing a business entity are as follows:

  • Tax Treatment
  • Ability to raise capital
  • Separation of ownership and management
  • Limited liability protection
  • Transferral of ownership
  • Ease of formation

Prior consent from RBI and/or government is required for setting a business venture in India by a Liaison Office/ Project Office/ Branch office. Also, the set-up to open a Branch Office / Project Office/ Branch Office/ Liaison Office is that only a body corporate consolidated outside India can include any of these offices.

The legal necessities for starting a business in India are:

  • Formalizing a business structure and founders agreement.
  • Applying for business licenses.
  • Understanding taxation and accounting laws.
  • Adhering to labor laws.
  • Ensuring protection of intellectual property.
  • Providing effective contract management.
  • Details about winding down the business.

The steps which needs to be followed for registering a business in India are:

  • Checking the company name availability.
  • Acquiring a direct identification number (DIN).
  • Receiving a digital signature certificate.
  • Obtaining an incorporation certificate.
  • Creating a company seal for official documentation.
  • Stamping of all company documents.
  • Acquiring a permanent account number (PAN).
  • Receiving a tax account number (TAN).
  • Acquiring a certificate from the State/Municipal inspector under the Shops and establishing act.
  • Applying for GST registration.
  • Obtaining a professional tax certificate from the state professional tax office
  • Completing a national employees’ provident fund registration.

At MAS, the following services are offered for starting a business in India:

  • Business entry advisory services
  • Recognizing the suitable form of business
  • Acquisition of licenses and registration under various acts
  • Addition of permanent account number (PAN)/ tax deduction or collection account number (TAN)
  • Preparation and filing of incorporation documents
  • Attestation and legalization of documents
  • A fling of application with RBI through Authorized Dealer Bank
  • Verification of knowing your client (KYC) from the banker of the parent company
  • Registration of project office of a foreign company with the ROC
  • Preparing charter documents (Memorandum of Association/ Articles of Association)
  • Assistance in trademark & other intellectual property registration.
  • Secretarial and administrative support.
  • Post incorporation services (accounting, bookkeeping, payroll, auditing, taxation etc.)
  • Assistance in RBI compliances.


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