India Entry Basics

Incorporating an Indian Business Entity

Any entry in India for the purpose of establishment of a business entity or earning revenue shall be governed by the FEMA Regulations. Persons resident outside India need to ensure that the conditions specified under the FDI guidelines are complied with. The Guidelines prescribe different routes for non-residents for investing in various sectors in India viz. Automatic Route, Government Approval Route and Prohibited Sectors.

Foreign investment in most of the sectors (more than 90%) falls under 100% automatic route of the FEMA Regulations. Automatic Route is the entry route through which investments by a person resident outside India do not require any prior approval from the Reserve Bank of India (RBI) or the Government of India. Only such activities, which are covered under Automatic Route (and are not specifically prohibited), can be carried without obtaining RBI Approval. You can learn more about the industry specific limits and get answers to some common questions related to FDI before making your investment decision.

India offers a variety of business structures that can be adopted by foreign national / entity. The choice of business structure entirely depends upon the end goals to be achieved. The structure should be based on the idea of investment, your preferences on terms like liability, control, purpose of formations, expected lifeline of business, compliances, etc. Here is the list of entities that a foreign resident can register.

For having better insight on various types of business models prevalent in India and their feasibility for Non-Residents (NR), you may go through the following links:

Most Popular Structure to do Business in India by a Non-Resident

Incorporation of a Private Limited Company is the easiest, fastest and most preferred entry structure by Non-Residents. For better insight you may like to go through our detailed article on procedure of incorporating a private limited company.

What makes India attractive for Investments?

  • Good Consumer Base- Being the second largest populated country in the world, India is one of the biggest markets with huge and diversified customer base. The market size is the most important benefit in India.
  • Rationalization of policies- The Indian Laws are still seen as complex. However, the Indian policies and regulations have been rationalized by the Government of India, making it attractive for foreigners to invest in India. Indian Government is conscious about the difficulties faced by non-Residents and therefore has been consistently working towards making it investor-friendly.
  • Uniform Applicability of Tax Laws – Once a company is incorporated in India, including a wholly owned subsidiary of a foreign Company, it is treated at par with domestic companies (in its entirety).