Best Way to Start a Business in India as a Foreigner (2025)

Table of Contents

Start a Company in India


India continues to be a magnet for global entrepreneurs thanks to its booming economy, diverse markets, and supportive government policies. Whether you’re an NRI, OCI holder, or a foreign national from the USA, UK, South Korea, Germany, UAE, or anywhere else, establishing a business in India is not only legal—it’s encouraged.

Here’s a comprehensive roadmap to help you navigate the process.

1. Select the Right Business Structure

Foreign investors typically choose from:

• Private Limited Company (most flexible and widely recommended)

• Wholly Owned Subsidiary (WOS)

• Joint Venture (JV) with Indian partner

• Limited Liability Partnership (LLP)

• Branch, Liaison, or Project Office (requires RBI/government approval)

For ease of operations and full ownership, a Private Limited Company is usually the best route.

2. Meet FDI Norms

India permits 100% Foreign Direct Investment (FDI) under the automatic route in most sectors. Check:

• Whether your sector falls under automatic or approval route

• Sectoral caps and specific conditions under FDI policy

• RBI and FEMA guidelines for foreign ownership

3. Secure Legal Digital Credentials

Digital Signature Certificate (DSC)

Required for signing incorporation documents electronically on the MCA portal.

• Apply through approved providers (e.g., eMudhra, Sify, Capricorn)

• Submit a notarised/apostilled passport, photo, and address proof

Director Identification Number (DIN)

Every foreign director must apply for a DIN when submitting incorporation forms via SPICe+.

4. Company Name Reservation

Via MCA portal through RUN or SPICe+ Part A

• Name must comply with Companies (Incorporation) Rules, 2014

• Check name availability and guidelines for foreign entities

5. Submit Incorporation Documents

Using the SPICe+ web form, upload:

• MoA and AoA (Memorandum & Articles of Association)

• Registered office address proof

• Directors’ and shareholders’ identity and address proofs

• Consent forms (DIR-2, INC-9, etc.)

All foreign-origin documents must be notarised and apostilled/consularised.

6. Obtain PAN, TAN & Open Bank Account

• PAN and TAN are automatically generated post incorporation

• Open a corporate account with an Indian bank (may require in-person KYC)

• Route FDI funds via this account and file Form FC-GPR with RBI

7. Fulfill Post-Incorporation Obligations

• Register for GST if required

• Apply for Shops & Establishments License per state laws

• Obtain Import Export Code (IEC) if trading internationally

• Maintain proper financial and compliance records

• File annual returns and tax reports regularly

⚠️ Important Notes

• At least one director must be an Indian resident

• 100% foreign shareholding is allowed in most sectors

Why Foreigners Choose India (Start a Business in India)

• Huge consumer market & rising middle class

• Affordable, skilled workforce

• Strategic Asian location

• Favorable FDI regime and thriving startup ecosystem

With a robust legacy built since 2015, under the visionary leadership of Mr. Rohit Dandriyal and Mr. Rahul Kumar, the Chamber of Advocate Rohit Dandriyal, Advocates & Legal Consultants stands at the forefront of cross-border legal consultancy in India. The firm is a trusted ally for foreign entrepreneurs, NRIs, and multinational clients seeking to establish companies in India—offering precise legal guidance on incorporation, FDI compliance, and regulatory matters. Known for its transparency, strategic insight, and commitment to client success, the Chamber has earned a reputation for delivering solutions that simplify complexities and enable clients to confidently navigate India’s dynamic legal and business landscape.

Frequently Asked Questions (FAQ): Starting a Company in India as a Foreigner

1. Do Indian laws permit the incorporation of businesses by foreign nationals?

Absolutely. Foreign nationals—including NRIs, OCIs, and overseas companies—can legally incorporate a business in India, provided they comply with the Foreign Direct Investment (FDI) guidelines and applicable Indian laws.

2. What is the most suitable business structure for international entrepreneurs entering the Indian market?

The most popular and versatile structure is a Private Limited Company, which permits 100% foreign ownership in most sectors under India’s automatic FDI route.

3. Is a resident Indian director mandatory?

Yes. Indian law requires at least one resident director, defined as someone who has resided in India for 182 days or more in the preceding financial year. Foreigners may retain full shareholding.

4. Is government approval always required for foreign investment?

Not always. Most sectors are covered under the automatic route, needing no prior approval. However, industries like defense, telecom, and real estate require government clearance under the approval route.

5. What documentation is needed to incorporate a company?

Key documents for foreign applicants include:

• Notarised & apostilled Passport

• Notarised & apostilled Address Proof

• Recent Photograph

• Consent & Declaration Forms

• Charter Documents (MoA & AoA)

6. Do I Need a Digital Signature Certificate (DSC) for Company Registration in India?

Yes, it’s mandatory. The DSC is used to digitally sign official documents submitted on the MCA portal. Foreign directors must obtain one through a licensed Indian certifying authority.

7. What is a Director Identification Number (DIN)?

A DIN, or Director Identification Number, is an official ID granted by India’s MCA to those aiming to become directors of registered companies. It is a mandatory prerequisite for both Indian and foreign nationals to legally assume directorial responsibilities.

8. Can Foreign Nationals Set Up Indian Business Accounts?

Absolutely. Once your company is registered in India, you’re eligible to open a current account with an Indian bank. Any international investment must pass through this account following RBI compliance norms.

9. What is Form FC-GPR?

Form FC-GPR (Foreign Currency – Gross Provisional Return) must be filed with the Reserve Bank of India whenever foreign capital is injected into an Indian company. It’s submitted via the designated Authorised Dealer (AD) Bank.

10. Is a physical office address in India required?

Yes, every registered company must provide a valid business address within India. This can be rented or owned, and proof must be included during incorporation.

11. What post-incorporation steps should be followed?

New companies must:

• Open an Indian bank account

• Register for GST, if applicable

• File FC-GPR for foreign investments

• Appoint a statutory auditor

• Maintain financial records and file annual returns

• Set up statutory registers and board documentation

12. Do I need to travel to India for incorporation?

No, physical presence isn’t necessary for incorporation. Most formalities are online. However, certain steps like bank KYC or DSC verification may involve in-person compliance based on the provider.

13. Can profits be repatriated overseas?

Yes. Repatriation of profits and capital to your home country is permitted, subject to Indian tax laws and RBI’s foreign exchange regulations.

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