Business entities in India

Choosing the right vehicle is essential when starting a business in India. Healy Consultants Group has the expertise and experience to advise on the optimum approach. There are several vehicles through which to do business in the country, the most popular being a private limited company.
Local business entities available

Indian Limited Liability Company (private limited company)

    1. The key features of a private limited company in India are that it can be incorporated with i) a minimum paid up capital of US$1,650 (INR100,000) ii) two directors and iii) two shareholders. Although the shareholders can be any nationality, at least one director must be India-resident;
    2. All directors and shareholders must register their personal details for public records. All directors must also obtain Director Identification Number (DIN) and Digital Signature Certificate (DSC) numbers. Read more about the steps required to register an Indian limited liability company;
    3. Best uses: Setting up a private limited company in India is our recommended strategy to enter the local market and limit the liability of foreign investors. This entity is ideal for export and direct sales, manufacturing and software development. Foreign investors can access a wide range of government subsidies with this entity.

Branch Office

  1. This entity functions only within the scope defined by the parent company. In India, a branch office can engage in trade, professional consultancies, export/import of goods, invoicing and signing contracts;
  2. A branch incorporated in a Special Economic Zone (SEZ) can only conduct business activities within the zone itself;
  3. To incorporate a branch office, approval must be obtained from the Reserve Bank of India (RBI);
  4. Best uses: registration of an India branch office is not advisable. This entity is subject to 43% corporate tax, and presents a higher risk to liabilities directly borne by the parent company.

Representative office (liaison office)

  1. In India, a representative office is known as a liaison office. A liaison office assists the parent company in i) promoting exports/imports to and from India and ii) promoting technical and financial collaborations with other resident firms. Consequently, this entity acts as a channel of communication between the parent company and potential customers/suppliers in India;
  2. Best uses: a liaison office is a good option if you want to test the Indian market before committing major resources by setting up a permanent establishment in the country. It is a non-revenue generating entity, so is also ideal for providing after sales customer support to local clients.

Project Office

    1. This entity may be set up to carry out a specific contract for a specified time period within India. After the project is complete, the entity is terminated;
    2. The operations of a project office are taxed as those of a branch office. Remittance of profits outside India is allowed, subject to prevailing exchange controls;
    3. A project office is much easier to de-register than a permanent establishment (branch and/or subsidiary);
    4. Best uses: registration of a project office is ideal for one-off projects.
LLC Fast solution LLC LLP EPZ company PLC Branch Rep office Project office
Operations and logistics
Bank Signatory must travel?NoNoNoNoNoNoNoNo
Is doing business in India permitted?YesYesYesYesYesYesNoYes
Allowed to sign contracts with local clients?YesYesYesYesYesYesNoYes
Allowed to invoice local clients?YesYesYesYesYesYesNoYes
Can rent local office premises?YesYesYesYesYesYesYesYes
Tenancy agreement required before incorporation?NoNoNoNoNoNoNoNo
Allowed to import raw materials?YesYesYesYesYesYesNoYes
Allowed to export goods?YesYesYesYesYesYesNoYes
Accounting and tax
Corporate tax payable?34%34%0%Up to 0%34%43%None43%
Corporate bank account?SCB IndiaHSBC IndiaHDFC IndiaHSBC IndiaSCB IndiaCitibank IndiaAxis IndiaCitibank India
Statutory audit always required?NoNoYesNoYesYesYesYes
Annual tax return to be submitted?YesYesYesYesYesYesNoYes
Access to double taxation treaties?YesYesNoYesYesYesNoYes
Company law
Issued share capital required?US$1,650US$1,650US$1US$1,650US$8,060NoneNoneNone
Resident director/manager required?YesYesYesYesYesYesYesYes
India shareholder/trustee/partner required?NoNoYesNoNoNoNoNo
Minimum number of directors/managers?22123111
Minimum number of shareholders/partners?12217Parent companyParent companyParent company
Individual shareholders/partners allowed?YesYesYesYesYesNoNoNo
Corporate director(s)/managers allowed?NoNoNoNoNoNoNoNo
Public register of shareholders and directorsYesYesYesYesYesYesYesYes
Immigration
Can the entity hire expatriate staff?YesYesYesYesYesYesYesYes
Fees and timelines
How long to set the company up?2 months1 week2 months3 months2 months3 months3 months3 months
How long to open corporate bank account?1 month1 week1 month1 month1 month1 month1 month1 month
Estimate of engagement costsUS$27,300US$39,465US$19,305US$18,455US$21,255US$19,555US$19,385US$19,555
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CLA Consultants Group would be glad to guide you through the procedures to set up a company in India.

  1. What business entity should I setup in India?

    The most commonly established company in India is the limited liability company due to relatively i) simpler formation procedures and ii) least cumbersome compliance requirements. Hence, we recommend you to opt for the LLC.

  2. Why setup a company in India?

    India is one of the fastest growing economies in the world today. The Indian government offers several business grants and tax incentives, especially with regards to companies in the Special Economic Zones and the IT parks.

  3. Are ownership details of an India business setup available for public viewing?

    Yes. The ownership details of a company will be available for public viewing.
Register your company in the India now!
CLA Group has the solution to help you grow.

Contact us

For more info on India company registration, please contact our expert directly:

person
Mr. Petar Chakarov
Senior Manager, Sales & Business Development