Foreign Company

Foreign Company

India is among the fastest growing economies in the world with immense human potential and a large market comprising of over 1.2 billion people. Opportunities in India has attracted a large amount of Foreign Direct Investment into the country and each year the amount of FDI inflow keeps increasing due to more number of foreign businesses starting their operations in India. In this post, the way to setup a business is in India is detailed for foreign companies.

A foreign company planning to set up business operations in India has the following TWO options:-




A foreign company planning to set up business operations in India has the following TWO options:



A foreign company can commence operations in India by incorporating a company under the Companies Act, 2013 through:

a. Joint Ventures; or

b. Wholly Owned Subsidiaries

Foreign equity in such Indian companies can be up to 100% depending on the requirements of the investor, subject to equity caps in respect of the area of activities under the Foreign Direct Investment (FDI) policy. Details of the FDI policy, sectoral equity caps & procedures can be obtained on a specific request


1.a)Joint Venture With An Indian Partner

    Foreign Companies can set up their operations in India by forging strategic alliances with Indian partners.


Joint Venture may entail the following advantages for a foreign investor:


Established distribution/ marketing set up of the Indian partner


Available financial resource of the Indian partners


Established contacts of the Indian partners which help smoothen the process of setting up of operations

1.b) Wholly Owned Subsidiary Company

Foreign companies can also set up wholly owned subsidiary in sectors where 100% foreign direct investment is permitted under the FDI policy.

Incorporation of Company

For registration and incorporation, set of applications have to be filed with Registrar of Companies (ROC). Once a company has been duly registered and incorporated as an Indian company, it is subject to Indian laws and regulations as applicable to other domestic Indian companies.




Foreign Companies can set up their operations in India through:

Liaison Office/Representative Office

Project Office

Branch Office

Such offices can undertake any permitted activities. Companies have to register themselves with Registrar of Companies (ROC) within 30 days of setting up a place of business in India.

2.a) Liaison Office/ Representative Office

Liaison office acts as a channel of communication between the principal place of business or head office and entities in India. Liaison office cannot undertake any commercial activity directly or indirectly and cannot, therefore, earn any income in India. Its role is limited to collecting information about possible market opportunities and providing information about the company and its products to prospective Indian customers. It can promote export/import from/to India and also facilitate technical/financial collaboration between parent company and companies in India.

Approval for establishing a liaison office in India is granted by Reserve Bank of India (RBI).

2. b)  Project Office

Foreign Companies planning to execute specific projects in India can set up temporary project/site offices in India. RBI has now granted general permission to foreign entities to establish Project Offices subject to specified conditions. Such offices cannot undertake or carry on any activity other than the activity relating and incidental to execution of the project. Project Offices may remit outside India the surplus of the project on its completion, general permission for which has been granted by the RBI.

2. c) Branch Office

Foreign companies engaged in manufacturing and trading activities abroad are allowed to set up Branch Offices in India for the following purposes:

i. Export/Import of goods

ii. Rendering professional or consultancy services

iii. Carrying out research work, in which the parent company is engaged.

iv. Promoting technical or financial collaborations between Indian companies and parent or overseas group company.

v. Representing the parent company in India and acting as buying/selling agents in India.

vi. Rendering services in Information Technology and development of software in India.

vii. Rendering technical support to the products supplied by the parent/ group companies.

viii. Foreign airline/shipping company.

A branch office is not allowed to carry out manufacturing activities on its own but is permitted to subcontract these to an Indian manufacturer. Branch Offices established with the approval of RBI, may remit outside India profit of the branch, net of applicable Indian taxes and subject to RBI guidelines Permission for setting up branch offices is granted by the Reserve Bank of India (RBI).



 Registration of foreign company:-

A foreign company planning to set up business operations in India has the two options.

  • Whether as an Indian company or

  • A foreign company.

If the foreign company establishes its business by establishing the company under Indian companies act, 2013, all the provisions related to the Indian companies will apply on that company.

But if foreign company starts its business as a foreign company through branch, liaison office or project office it has to comply with some other provisions also.

A foreign company shall within 30 days of establishing a place of business in India deliver to the ROC the following documents:-

  • A certified copy of the charter, statutes, or memorandum and articles, of the company or other instrument constituting or defining the constitution of the company and, if the instrument is not in the English language, a certified translation thereof.

  • The full address of the registered or principal office of the company.
  • A list of the directors and secretary of the company.
  • The name and address or the names and addresses of one or more persons resident in India, authorized to accept on behalf of the company service of process and any notices or other documents required to be served on the company.
  • The full address of the office of the company in India which is to be deemed its principal place of business in India.

The filing shall be done at two places with the principal Registrar of companies at New Delhi, and with the ROC of the state having jurisdiction where the principal place of the business of the company is situated. Certification of documents shall be in accordance with Rule 16 of the Companies (Central Government) Rules and Forms, 1956.