Consulting and implementing the best suited legal entity for your subsidiary in India
For foreign mid-sized companies entering India, selecting the optimal legal structure for your subsidiary is a critical first step. Your choice depends on your market-entry strategy, operational timeline, and business objectives—whether it’s manufacturing, exports, machinery installation, warehousing, local order processing, or delivering services within India.
Establishing Your Business Presence in India: The Right Start for Long-Term Success
Maier Vidorno Altios brings extensive on-the-ground expertise to support international businesses in setting up their Indian operations. Our Legal & Compliance specialists guide you through:
Choosing the most suitable legal entity aligned with your strategic goals
Navigating incorporation procedures and statutory registrations
Addressing financing structures and compliance requirements
We offer end-to-end support—from entity selection to full registration—ensuring a smooth, compliant, and timely market entry.
What’s Next?
We address Few key questions that often come to mind for CXOs of mid-sized foreign companies considering an Indian subsidiary—covering legal, financial, operational, and strategic concerns to help you make informed decisions with clarity and confidence.
From choosing the right entity type to handling regulatory approvals and post-incorporation steps, these questions cover the essentials of launching a successful subsidiary in India.
Foreign companies entering India must select a legal entity aligned with their business intent, level of control, and compliance appetite. Below is a comparative view of the available structures:
| Entity Type | Commercial Activity | Ownership | Ideal For | Regulatory Burden | Repatriation |
|---|---|---|---|---|---|
| Liaison Office | ❌ No commercial activity | 100% Foreign | Market research, partner liaison | Low | ❌ Not applicable |
| Branch Office | ✅ Limited commercial activity | 100% Foreign | Import/export, consulting, technical services | Medium | ✅ Permitted under compliance |
| Project Office | ✅ Project-specific activities | 100% Foreign | Execution of time-bound contracts in India | Medium | ✅ Allowed for project-related profits |
| Wholly-Owned Subsidiary (Pvt. Ltd./Ltd./LLP) | ✅ Full commercial operations | 100% Foreign (in most sectors) | Manufacturing, services, sales, hiring, local invoicing | High | ✅ Full flexibility (post-tax) |
Foreign companies planning to establish operations in India must comply with a range of regulatory requirements depending on their business activity and chosen legal structure. These approvals ensure legal and financial alignment with Indian laws governing foreign direct investment (FDI).
| Authority | Purpose | Required When |
|---|---|---|
| Registrar of Companies (RoC) | Registers the company and issues incorporation certificate | Mandatory for all company types (Pvt. Ltd., Ltd., LLP) |
| Reserve Bank of India (RBI) | Oversees FDI reporting, liaison/branch/project office approvals | Required for WOS capital infusion or opening liaison/project offices |
| Foreign Investment Promotion Board (FIPB) (now merged into DPIIT/RBI approval process) | Reviews FDI proposals in restricted sectors | Applicable only in sectors not under automatic route |
Once your company is incorporated in India, several mandatory registrations and regulatory filings must be completed before you can begin operations. These are essential for tax compliance, hiring, financial transactions, and cross-border trade.
| Registration | Purpose | Required For |
|---|---|---|
| PAN (Permanent Account Number) | Tax identification for income tax and banking | All entities |
| TAN (Tax Deduction & Collection Account Number) | Withholding tax deductions on salaries/vendor payments | Entities with employees or contractors |
| GST (Goods and Services Tax) | Indirect tax registration for goods/services | Sales, service, import/export businesses |
| Professional Tax Registration | Local employee-related tax | Applicable in certain states |
| Shops & Establishments Registration | Employment compliance for office locations | Office/commercial space |
| EPFO/ESIC (Social Security) | Mandatory for hiring 10+ employees | Employee welfare compliance |
| IEC (Import Export Code) | For importing/exporting goods | Trading/manufacturing businesses |
Once your company is incorporated in India, several mandatory registrations and regulatory filings must be completed before you can begin operations. Here is an estimated timeline based on the requirement:
| Post-Incorporation Task | Estimated Timeline |
|---|---|
| PAN & TAN Application | 7–10 working days |
| GST Registration | 7–14 working days (state-dependent) |
| Shops & Establishment License | 7–10 working days (varies by state) |
| EPFO/ESIC Registration | 7–10 working days |
| Import Export Code (IEC) | 3–5 working days |
| Other Labor/Industry-specific Licenses | 2–4 weeks (depending on sector and location) |
Funding the Indian entity involves issuing shares to the foreign parent and filing with RBI through authorized dealers.
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