We advise foreign companies and investors on how to enter India and how to invest in Indian businesses. That covers the choice of entry vehicle, the foreign investment route and sectoral conditions, approvals, incorporation, and the reporting that follows every inflow of capital.
What we advise on
- Choice of vehicle. Wholly owned subsidiary, joint venture company, LLP, branch office, liaison office or project office
- Automatic route and government route investments, sectoral caps and conditions
- Investments from countries sharing a land border with India and beneficial-ownership screening under Press Note 3 (2020)
- Pricing, valuation and the issue or transfer of shares to non-residents
- Reporting to the Reserve Bank of India through authorised dealer banks and the FIRMS portal
- Incorporation, registrations and the first-year compliance calendar
- Downstream investment and restructuring of existing Indian holdings
Key law and regulation
Foreign Exchange Management Act, 1999. Foreign Exchange Management (Non-Debt Instruments) Rules, 2019. The Consolidated FDI Policy issued by DPIIT. Companies Act, 2013. Regulations of the Reserve Bank of India on branch, liaison and project offices.
Frequently asked questions
Does a foreign company need government approval to invest in India?
In most sectors, no. Investment is permitted under the automatic route, subject to sectoral caps and conditions. Certain sectors, and any investment where the investor or its beneficial owner is from a country sharing a land border with India, need prior government approval.
Should we set up a subsidiary or a branch office?
A subsidiary is a separate Indian company and can carry on most business activities. A branch or liaison office is an extension of the foreign company, is limited to permitted activities and needs approval through an authorised dealer bank. Most operating businesses choose a subsidiary. The right answer depends on the activity, tax position and how long you intend to stay.
How long does it take to set up an Indian subsidiary?
Incorporation itself is usually a matter of weeks once documents from the parent are notarised and apostilled. Bank accounts, tax registrations and sector licences add further time. [Firm to insert its typical timeline.]
What reporting is required after foreign investment is received?
The Indian company must report the receipt of funds and the issue of shares to the Reserve Bank of India within prescribed timelines, and file annual returns on foreign liabilities and assets. Late or missed filings attract compounding or penalties.