Business guide for India: how to set up

What you need to know

1. Can a foreigner own 100% of an Indian company?

   Business structure in India, Private limited company, what it may do: Up to 100% foreign ownership without approval in most sectors. Closed to foreign money: lottery, gambling and betting, chit funds, Nidhi companies, trading in development rights, real estate business and farm houses, tobacco cigarettes, atomic energy and railway operations. Some sectors have caps (for example multi-brand retail 51% with approval, news media 26%). At least 2 shareholders and 2 directors (at most 200 shareholders, 15 directors). No minimum capital. At least one director must stay in India 182 days or more in each financial year (counted pro rata in the first year).

   Where this comes from

   • RBI Master Direction – Foreign Investment in India (updated to 15 Jun 2026), read 25 October 2026

2. What taxes does a company pay in India?

   Business taxes in India: Company profit: 22% (no deductions) or 25%/30%, plus surcharge and 4% cess; Foreign company: 35%; GST: 5% or 18% (40% luxury); register at ₹20 lakh; Dividends to a foreign company: 20% withheld (treaties lower it); Start-ups: 3 tax-free years out of 10; Tax year: 1 April to 31 March.

   Where this comes from

   • Memorandum explaining the Finance Bill, 2026, read 25 October 2026

3. What can a foreign company's office in India do?

   Business structure in India, Branch, liaison or project office, what it may do: Branch: import and export, professional and consultancy work (not law), research, buying or selling agent, IT and software services, technical support for the group, representing a foreign airline or shipping line. Liaison office: represent the parent and promote its trade. It may not earn income; it spends only money from head office. Project office: for a contract from an Indian company, funded from abroad, by a multilateral agency or an Indian term loan. RBI itself decides cases in defence, telecom, private security and broadcasting.

   Where this comes from

   • RBI Master Direction – Establishment of BO/LO/PO in India by foreign entities (updated 18 May 2021), read 25 October 2026

4. Can foreigners invest in an Indian limited liability partnership?

   Business structure in India, Limited liability partnership (LLP), what it may do: At least two individual designated partners, one of whom stays in India 120 days or more in the financial year. Foreign contributions only where the sector allows 100% foreign ownership without approval and has no performance conditions. Foreign contributions must be at least the fair price, certified by an accountant or valuer.

   Where this comes from

   • RBI Master Direction – Foreign Investment in India (updated to 15 Jun 2026), read 25 October 2026

5. What schemes help businesses set up in India?

   Incentives and schemes for businesses in India: Startup India: recognition, tax holiday, no angel tax; Production-linked incentives in 14 sectors; Special Economic Zones; GIFT City financial centre: 100% deduction of eligible income for 10 of 15 years; Udyam registration for small firms (free); National Single Window for central and state approvals.

   Where this comes from

   • Startup India Tax Playbook for Startup Ecosystem (May 2026), read 25 October 2026

6. Can an Indian citizen abroad set up a one-person company?

   Business structure in India, One person company (Indian citizens only), what it may do: One member who is an Indian citizen, living in India or abroad (since 1 April 2021; “resident” now means 120 days a year in India). A nominee named in the Memorandum, who agrees in writing. Can convert to another type of company at any time.

   Where this comes from

   • The Companies Act, 2013 (MCA consolidated text, last update 29 Jul 2022), FAOLEX copy, read 25 October 2026

7. Which office processes new company registrations in India?

   Office for setting up a business in India: Central Registration Centre. What it handles: Processes every new company and LLP. Address: IICA, Plot 6, 7, 8, Sector 5, IMT Manesar, Gurugram, Haryana 122050. Email: CVO-MCA@gov.in (complaints).

   Where this comes from

   • MCA, FAQs on SPICe+ and linked filings (V3) (archived 29 Sep 2023; read 25 Oct 2026), read 25 October 2026

8. Who helps foreign investors set up in India?

   Office for setting up a business in India: Invest India. What it handles: National investment promotion and help. Address: Block 7 & 9, Jodhpur Officer Hostel, Pandara Road, New Delhi 110003. Phone: +91-11-23072328. Email: contact@investindia.org.in. Website: https://www.investindia.gov.in.

   Where this comes from

   • Invest India Contact Us, read 25 October 2026