Setindiabiz is your one-stop destination for starting a company in India as a foreigner. We have over two decades of experience in setting up Indian Subsidiaries or standalone companies with 100% foreign shareholding in India.
01
India is an open economy, and 100% foreign equity is allowed in most sectors except for strategic sectors.
02
The corporate tax rate for manufacturing is 15%, while for other sectors it is 22%, providing an appealing tax structure.
03
More than 65% of the population is under 35 Years of age, with 1.5 million engineers and 4 million graduates.
04
A population of approximately 1.4 billion individuals with an estimated expenditure of $6 trillion by 2030.
The company incorporation takes one to two weeks after receipt of complete, duly legalised documentation. Please see the legalisation section below.
As a foreign individual, you have only two options: a Private Limited Company or an LLP. As per FEMA, a foreigner can not do business as a Proprietor in India, and a foreign national can not set up a partnership firm in India. Though LLP Incorporation with FDI is permitted, the tax rate is high. We recommend establishing a Private Limited Company, as the process is straightforward.
India is a promising nation with unlimited growth potential, a large talent pool, and a growing middle class, which makes it attractive for foreign investors to set up an Indian Company. An individual shareholder/investor can choose between a Private limited company and an LLP. Here is a comparison between the Company and LLP to make a well-informed decision.
| Criteria | Private Company | LLP |
|---|---|---|
| Constitution Documents | Certificate of Incorporation Issued by ROC, Memorandum & Articles of Association. | Certificate of Incorporation Issued by ROC and the LLP Agreement between the partners |
| FDI | FDI is 100% allowed in most sectors. However, limited FDI is allowed in strategic sectors such as Media, Housing, etc. | FFDI is allowed only in those sectors where 100% FDI is allowed. |
| Taxation | The corporate tax rate is 15% for manufacturing and 22% for new Companies. | The Income Tax rate of the LLP in India is 30% |
| Incorporation | Relatively Easy | After Incorporation, the LLP Agreement is executed in hard copy and, therefore, complicated. |
| Compliance | Compliance is higher to ensure transparency and corporate governance. | Lower than that of the Company. |
A minimum of two person is required as shareholders. Both persons can be foreigners.
Directors are responsible for operating the business and ensuring compliance.
One of the directors of the Indian Company must reside in India for at least 120 days.
The Indian company name must be new/unique and not similar to an existing business.
Incorporate a company with any capital level. No minimum or maximum is prescribed.
The object for which the company is incorporated must be legal in India.
Documentation plays a crucial role in setting up a company in India. The overall time required to set up an Indian company depends mainly on the time consumed in arranging the documents and their legalisation. The documents of foreign origin and those signed or executed outside India must also be legalised or as per Rule 13(5) of The Companies (Incorporation) Rules, 2014.
In India, entrepreneurs starting a new business can begin their company registration process with a “communication address” even before securing a permanent office. This temporary address helps you start the formalities while searching for the ideal premises. However, remember to file the registered office address details within 30 days of incorporation in Form INC-22 to the ROC.
Rule 13(5) of Companies (Incorporation) Rules, 2014, makes specific provisions concerning the legalisation of documents originating from a foreign country for use in India during the incorporation process. Similarly, the signed or executed documents would need to be witnessed similarly. For this purpose, the process of legalisation would vary from country to country. The table below may be referenced for this purpose.
| No | Particulars | Legalisation Method |
|---|---|---|
| 1. | Persons Visiting India | If you are visiting India on a business visa and carrying the original documents with you, then a Notary Public in India can attest to the same. However, you need to furnish a copy of your business visa and the Immigration Entry Stamped page of your passport. |
| 2. | For Commonwealth Nations | Documents originating from Commonwealth nations may be legalised by notary public attestation in the home country. Please refer to the link below for the list of commonwealth nations https://www.setindiabiz.com/list-of-commonwealth-countries |
| 3. | Hague Convention Signatories | The documents originating from the countries that are part of the Hague Convention may get their documents apostilled in the home country. The list of Hague Convention countries is at below link: https://www.setindiabiz.com/hague-convention-list-of-countries |
| 4. | Other Countries | Applicants from other countries that are neither part of the Commonwealth nor signatory of the Hague Convention have only one option: attestation by the Indian Embassy or Consulate. |
Documentation plays a significant role in incorporating a private limited company in India by foreigners. The incorporation experts at setindiabiz are experienced in helping foreigners establish companies in India. The following stepwise process will help you understand the process in detail. We are available to answer your questions.
The time required to incorporate a company with foreign shareholding mostly depends on the time taken for documentation and legalisation. The following timeline depicts the time taken after the documents are ready and duly legalised. The incorporation experts of setindiabiz are readily available to help.
Document and information collection & Making of Digital Signature
Name Availability Search & Drafting of MOA, AOA.
Preparation of Spice Plus Form for Incorporation Filing
Issue Certificate of Incorporation by ROC, that contains CIN, PAN and TAN
