If we compare other business structures, opening a foreign company, or a company formed by NRIs (Non-Resident Indians) and Foreign Nationals, going for the private structure is one of best and easiest option. Incorporating a private company is comparatively less of a burden than opening a public company. For foreign nationals and NRIs, Limited Liability Partnership is one of the ways to expand their business in India. As it is kind of a cross hybrid of partnership and private company, it works well for foreign nationals and NRIs. 

Foreign Direct Investment (FDI) in LLPs is allowed by way of capital contribution or by way if acquisition/ transfer of profit shares in the capital structure of an LLP. LLP is a corporate business vehicle that enables professional expertise and entrepreneurial initiative to combine and operate in flexible, innovative and efficient manner, providing benefits of limited liability while allowing its members the flexibility for organizing their internal structure as a partnership.

The fastest way of opening a foreign company in India is by incorporation of a Private Limited Company. Any foreign company can either incorporate a wholly owned subsidiary or a subsidiary which is not wholly owned by the holding foreign company.


  • Minimum Capital– Not Prescribed
  • Minimum Number of Member– Two partners
  • Maximum Number of Members– Not Prescribed (No upper limit)
  • Entity– Separate entity distinct from its partners
  • Managed By– Designated partners
  • Resident Director– One designated partner must be a resident of India
  • Audit– Not required for small firms; LLPs having annual turnover of more than INR 40 lakhs or contribution is more than INR 25 lakhs have to get their accounts audited
  • Foreign Investment– Permitted only in activities where 100% FDI is allowed by automatic route without conditions


  • Minimum number of directors required for incorporation of a Private Limited Company is 2. Among these two, at least 1 should be a resident of India. (a person who has stayed in India for at least 182 days in the previous year is regarded as a resident of India in this context)
  • Minimum number of shareholders for incorporation of a company is 2. Residential status of the shareholder is not relevant in this case
  • Name of subscribers of the holding company, its nominee shareholder
  • Percentage of shareholding of subscribers and face value of shares
  • Self attested and notarized documents
  • In case of company: Board resolution duly passed for entering and forming company in India
  • In case of individuals: Passport copy, driving license, current address proof
  • Registration of Branch Office, Liaison Office requires the approval of RBI. Foreign nationals cannot open branch of these offices hence, these option stays for foreign private companies


Following are the sectors which require prior approval from the Government of India by the Foreign Company or foreign nationals for their investment:

  • Petroleum sector, Natural gas
  • Company infrastructure
  • Defence and strategic industries
  • Atomic minerals 
  • Print media
  • Postal services
  • Broadcasting
  • Tea sector
  • Establishment and operation of satellite
  • Courier services
  • Development of integrated township
  • Asset Reconstruction Company


Step 1:

DSC and DIN of Directors: Obtaining Digital Signature Certificate (DSC) and Director Identification Number (DIN) of the Directors is the first step to incorporate a foreign company in India. The documents for obtaining DSC and DIN are PAN (For Indian Nationals), Passport (For Foreign Nationals); copy of bank statement, utility bill; residence permits for foreigners (if residing in India), passport size photograph.

Step 2:

Application for Approval of Company Name: A foreign company can use the name it uses for the company where it is incorporated and can use the registered trademark (if any) for incorporation of company in India. Apart from these options, it can opt for any other name as the company so desires.

To get the name approved, the company has to login to the web portal of the Ministry of Corporate Affairs (MCA). An online form “RUN” is to be submitted for approval of name or the application for name can be filed through the integrated “SPICe” form. After completion of the form and paying the requisite fee, a name is reserved for a period of 20 days from the date of approval of the name

Step 3:

After the name of your company is approved, the following documents are to be prepared and submitted to the Registrar of Companies (ROC):

  • Memorandum of Association of the company
  • Articles of Association of the company
  • Declaration by first subscriber(s) and director(s) through Form INC-9
  • Declaration by first directors with copy of id proof and residential address through Form DIR-2
  •  Declaration from foreign subscribers in respect of not having Permanent Account Number (PAN)
  •  Proof of office address, for example, lease deed, rent agreement, etc
  • Copy of utility bills which must not be older than 2 months
  • If the Directors do not have Director Identification Number, they have to mandatorily attach id proof and residential address of the subscribers

These documents must be duly apostilled or notarized in country of origin.

Step 4:

SPICe Form: After all the documents are prepared and ready, the company has to fill e-Form INC-32, SPICe. The form contains details that needs to be filled, like, Name of Company, physical apostilled copy of MOA and AOA, PAN and TAN details, etc. After filling this form it can be uploaded in the Ministry of Corporate Affairs web portal.

Step 5:

Certificate of Incorporation: This will be generated with Company Identification Number, PAN and TAN


Post incorporation of the company the following compliances are to be done by the foreign company:

  1. Opening of Bank Account this step is important so that subscription money can be received from the subscribers
  2. Filing Advance Reporting Form with Reserve Bank of India this form deals with receipt of subscription money. This needs to be done within 30 days from the date of receipt of fund
  3. Allotment of shares this step needs to be done within 2 months from the date of incorporation of subsidiary company
  4. Commencement of Business Certificate this should be filed within 18o days of incorporation of the company
  5. Foreign Inward Remittance Certificate this must be obtained by the Reserve Bank of India according to the Foreign Direct Investment Guidelines
  6. Foreign Currency- General Permission (FC-GPR) the company needs to file details of allotment of shares with RBI within 30 days for which submitting FC-GPR is necessary
  7. Goods and Service Tax Identification Number (GSTIN) this is used to identify business registered under Goods and Service Tax


  • Form FC-1 must be filed within 30 days of incorporation of subsidiary in India. The approval of RBI under the Foreign Exchange Management Act or Regulations must be attached with the form
  • Foreign companies registered in India must keep a record of the financial statement of its business operations in India in accordance with the Companies Act, 2013
  • Every foreign company must gets their accounts audited by a practicing Chartered Accountant of India
  • Form FC-3 must be filed listing the places of business of the foreign company along with the financial statements of the company
  • Form FC-4 (Annual Return) must be filed within 60 days from the final day of financial year to the Registrar of Companies


Generally it takes around 2 to 6 weeks for incorporating a company in India. If all the documents which are necessary for the incorporation are ready and available the process is faster as the delays occur in case of discrepancies. 


  • A private limited company has to hold a Board Meeting at least once in every 3 months. 
  • Annual General Meeting is to be conducted as well
  • A foreign national or NRI can be director in India only after obtaining DIN
  • A foreign national or NRI can hold shares of a Private Limited Company, but these are subjected to FDI guidelines
  • A company must file Foreign Liabilities and Assets (FLA) with RBI before 15th of July of the next financial year


In India, private company structure is the most sought for business structure as it retains the name of the parent company with the flexibility of expanding into new markets. Even though there are lot of compliances, procedures and documents required for incorporating any company for that matter, but opening a private company by foreign nationals and NRIs is the best option out there. It gives easy access to foreign direct investment and opportunities for foreign nationals and NRIs.

Limited Liability Partnership can be incorporated in around 15 to 20 days if all the documents are available and correctly filed. Going for LLP structure for NRIs and Foreign Nationals might be one of the best options seeing that it is simple and the process of its incorporation is easier than the other forms of business. An LLP is required to go through some compliance after its incorporation like filing of Form 8 (Statement of Account and Solvency), Form 11 (Annual return), ITR- 5 (Income Tax Return) and the same compliances are to be followed by Foreign Nationals and NRIs with no exception whatsoever. Even though foreign investment through LLP is allowed where 100% FDI is permitted without any conditions, it still is one of the most useful options for NRIs and Foreign Nationals.

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