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India entry for foreign companies: subsidiary, FEMA and GST.

The right vehicle, clean FDI and FEMA compliance, and an entity that can invoice, hire and bank from day one. A practical setup guide for foreign companies entering India.

2026 guideUpdated June 2026By the partnership

Choose the right vehicle

Wholly-owned subsidiary (Pvt Ltd) — the default for operating businesses; full FDI under the automatic route in most sectors.
LLP — lighter compliance; FDI allowed in sectors with 100% automatic route and no performance conditions.
Branch / Liaison / Project Office — for representation, project execution or limited activity; RBI/AD approval and narrower scope.

Incorporation & registrations

Name reservation and incorporation (SPICe+), PAN/TAN, GST registration, and a bank account — typically 3–5 weeks to an entity that can invoice, hire and bank.

FDI & FEMA

Inbound equity is reported on FC-GPR within 30 days of allotment; pricing must meet FEMA pricing guidelines and sectoral caps. Downstream investment and ODI have their own filings.

Tax & transfer pricing

An Indian subsidiary of a foreign parent has related-party transactions from day one — service fees, cost recharges, IP. These need an arm's-length policy and Form 3CEB. Corporate tax follows the Income-tax Act, 2025 (erstwhile Income-tax Act, 1961).

Ongoing compliance

ROC annual filings, GST returns, TDS, payroll and FEMA reporting run on a fixed calendar — handled in-house or via our Virtual CFO desk.

Common questions

What is the best entity for a foreign company entering India?

For an operating business, a wholly-owned private limited subsidiary is usual — most sectors allow 100% FDI on the automatic route. A branch/liaison office suits representation or project work.

How long does it take to set up an Indian subsidiary?

Usually 3–5 weeks from documents to an incorporated, PAN/GST-registered entity with a bank account, depending on document legalisation from the home country.

What FEMA filing is needed after foreign investment?

Equity infusions are reported on Form FC-GPR within 30 days of share allotment, at a price compliant with FEMA pricing guidelines.

This guide is general information, not legal or tax advice; positions turn on the facts of each case and the notified Rules. Get in touch for advice on your situation.

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