How Can a Foreign Company Start a Business In India?

India has earned the reputation of being one of the fastest-growing economies in the world, with a population of around 1.4 billion. This makes India an extremely lucrative destination for foreigners to start their businesses. With its business-friendly policies and wide acceptance, it is really easy for foreign investors to start their business in India. As per the World's Bank 2022 Report on ease of doing business, India has acquired a rank of 63 among 190 companies. The Indian government has also started to offer multiple schemes to foreigners so that they can start their businesses in the country and cause the Indian economy to grow further. These schemes have already attracted a lot of foreigners to the Indian territories. Foreign companies can also hire payroll companies in Bangalore to manage their payroll.

So, here, we are going to talk to you about some of the best ways in which foreigners can start a business in India.

Different ways in which foreigners can start a business in India:

Different ways in which foreigners can start a business in India

Liaison office: A foreign company can set up a liaison office for carrying out various liaison activities in India. The foreign company will have to bear the expenses of the liaison office. The office can only take up liaison activities in India. It cannot undertake any other business activities or earn profits in India.

Branch office: Branch offices can be set up in India after receiving the required approvals from the Reserve Bank of India. These branch offices can be opened by companies that are incorporated in India or are engaged in trading or manufacturing activities in India.

Joint venture: A foreign company can also form a joint venture in India. For that, it needs to connect with a local partner in the respective location where the business will be established. The foreign company also needs to sign a Memorandum of Understanding (MoU) with the foreign company.

Project office: A foreign company also has the choice of opening a project office in India to execute the projects that are given to them by Indian companies. However, to set up such an office, authorisation will be required from the RBI.

Wholly-owned subsidiary: An Indian company can easily become a wholly-owned subsidiary of a foreign business if it makes a 100% FDI investment in it. The foreign subsidiary of Indian company can also make a 100% FDI in order to register a business in India.

Wholly-owned subsidiary Company registered under the Companies Act 2013:

Registering a company under the Companies Act 2013 is the best way of doing business in India.

Private limited company: The fastest way to set up a startup business in India would be to register as a private limited company. The private limited company must have at least two shareholders. It can have a maximum of fifty shareholders. The company should also have a minimum paid-up capital of 1 lakh.

Public limited company: Nowadays, the concept of public limited company has also become widely popular. A public limited company should have at least seven shareholders. There are no upper limits on the number of shareholders it can have. The company needs to have a minimum paid-up capital of 5 lakh.

Limited Liability Partnership (LLP) Firm: The other option available is the Limited Liability Partnership (LLP) Firm. Depending on the amount of capital that the foreigner is willing to invest, the nature of the business and the resources available to manage the operations of the business, the foreigner will be eligible either for incorporating a company or forming an LLP. Although the LLP structure is easier to form and maintain, when it comes to acquiring funds and allocating the shares, incorporated companies are always more beneficial.

What are the documents required by foreign companies to start a business in India?

The type of documents required for company registration would depend on the kind of company that is about to be formed. Some of the generalized documents that are often required include:

  • Proof of registered office address in India.
  • Proof of Identity PAN is compulsory
  • Proof of Residence (Bank , electricity, telephone, mobile not more than two month old if above )
  • Photograph (2 each)
  • Signed Digital Signature form
  • Proof of Identity (any one of Passport, Driving License, Voter Card)
  • Aadhar Card copy


For foreign company registration or GST registration in Bangalore, you may reach out to the specialists at BC Shetty & Co. and they will help you start your business in India. The experts at BC Shetty can also help you with post-incorporation compliance services like FEMA FCGPR filing, GST registration, PF, PT, Shops and Establishment. They also offer regular compliance services like GST, TDS, Income tax, Statutory Audit, Accounting, Payroll, FLA Filing, STPI filing, etc. Contact the experts at BC Shetty for more details.


1. Can a foreign company do business in India without registration?

No, it would not be possible for a foreign company to do business in India without registration.

2. Can a US company own an Indian company?

Yes, US companies can own Indian companies either through direct investments or through joint ventures.

3. Can foreign companies open bank accounts in India?

Yes, foreign companies can open a bank account in India subject to specific rules and regulations.

4. Can a foreign corporation register for GST?

Yes, a foreign corporation can register for GST in India. They are categorised as non-resident taxable persons (NRTPs) and have specific registration and compliance requirements.


“The information contained herein is only for informational purpose and should not be considered for any particular instance or individual or entity. We have obtained information from publicly available sources, there can be no guarantee that such information is accurate as of the date it is received, or it will continue to be accurate in future. No one should act on such information without obtaining professional advice after thorough examination of particular situation.”

Prepared On:

Recent Posts

17 October 2023

IT audit

18 July 2023

GST E-Invoicing

05 January 2023

What is ODI

Popular Search

Related Newsletters

Please Share: