Asia-Pacific · Company formation
Company formation in India
This suits foreign founders who want a wholly-owned operating subsidiary to reach India's domestic market and hire locally. You will need to accept a resident-director requirement, along with year-round audit and ROC compliance.
At a glance
- Entity
- Private limited company (Pvt Ltd) under the Companies Act, 2013 — the standard vehicle for a foreign-owned Indian subsidiary
- Corporate tax
- Base 25% (turnover ≤ INR 400 crore) or 30% otherwise. Most opt into the section 115BAA concessional regime: 22% + 10% surcharge + 4% cess ≈ 25.17% effective. New manufacturing companies (incorporated after 1 Oct 2019, production by 31 Mar 2024) may use section 115BAB at 15% ≈ 17.16% effective. As of 2026.
- Incorporation time
- ~7-15 business days once all apostilled documents and DSCs are in hand; name approval and SPICe+ processing add most of the wait
- Minimum capital
- No statutory minimum paid-up or authorised capital (the old INR 1 lakh floor was removed in 2015); authorised capital is declared and drives stamp duty
- Resident director
- Yes — section 149(3) requires at least one director who stayed in India ≥ 182 days in the preceding financial year. Can be an Indian citizen or a foreign national who meets the day-count; a minimum of two directors is required for a private company.
- Audit
- Statutory audit is mandatory for every company annually, with no size, turnover or dormancy exemption. It must be conducted by an ICAI-registered practising Chartered Accountant.
- Remote set-up
- Yes — fully remote via the MCA21/SPICe+ portal; no travel needed. Foreign directors' passport and address proof must be notarised in the country of residence and apostilled (Hague states) or consularised, and each foreign director needs a Digital Signature Certificate (DSC).
- Government fee
- MCA registration (SPICe+ Part B) fee is nil for authorised capital up to INR 15 lakh; name reservation is INR 1,000 and combined PAN+TAN is INR 143. State stamp duty on incorporation is separate and varies by state.
- Best for
- This suits foreign founders who want a wholly-owned operating subsidiary to reach India's domestic market and hire locally. You will need to accept a resident-director requirement, along with year-round audit and ROC compliance.
The process
- Obtain a Digital Signature Certificate (DSC) for each proposed director, plus DIN where needed (DIN can be applied for within SPICe+, up to three at incorporation)
- Reserve the company name via SPICe+ Part A on the MCA portal
- File the integrated SPICe+ Part B with the e-MoA (INC-33), e-AoA (INC-34), and linked AGILE-PRO-S form (PAN, TAN, GST, EPFO, ESIC, bank account), attaching apostilled foreign-director documents
- Receive the Certificate of Incorporation with CIN, PAN and TAN; then complete FEMA/RBI FDI reporting (Form FC-GPR) after the foreign shareholder remits share capital
What can go wrong
- The resident-director rule is a hard requirement — foreign founders with no India-resident director must appoint a nominee/local director, an ongoing cost and a governance consideration
- Compliance is heavier than the low incorporation fee suggests: annual statutory audit (no exemption), ROC annual filings, board meetings and, for foreign ownership, FEMA/RBI reporting such as FC-GPR on capital inflow
- Foreign investment is subject to FDI rules — most sectors are automatic-route but some are restricted or capped, and pricing guidelines apply to share issuance to non-residents; sector-specific licensing may impose its own capital conditions
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Form a company in India?
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