The five ways a foreign business can be present in India, side by side. The right answer usually falls out of two questions: will the India presence earn revenue, and do you want a separate Indian legal entity?
| Private limited company (subsidiary) | LLP | Branch office | Liaison office | Project office | |
|---|---|---|---|---|---|
| Legal status | Separate Indian company | Separate Indian body corporate | Extension of the foreign company | Extension of the foreign company | Extension, for one project |
| Can earn revenue in India | Yes, any lawful activity | Yes | Yes, within RBI-permitted activities | No — representation only | Yes, for the awarded contract only |
| Foreign ownership | Up to 100% in most sectors (automatic route) | 100% only where sector is 100% automatic with no conditions | n/a (no Indian shareholding) | n/a | n/a |
| Owners' liability | Limited to share capital | Limited to contribution | Parent fully liable | Parent fully liable | Parent fully liable |
| Approval needed | None (MCA registration) | None (MCA registration) | RBI, via AD bank (Form FNC) | RBI, via AD bank (Form FNC) | General permission if conditions met; else RBI |
| Eligibility of parent | None | None | 5-year profit record, net worth ≥ USD 100,000 | 3-year profit record, net worth ≥ USD 50,000 | Contract awarded by an Indian entity, funded as RBI permits |
| India income-tax (headline rate) | 22% (concessional domestic-company regime) | 30% (LLP rate) | 35% (foreign-company rate) | Nil — no income | 35% (foreign-company rate) |
| Taking profits out | Dividend (after tax, no DDT) | Profit share, tax-free in partners' hands | Remit after tax; CA certificate | n/a | Remit surplus on completion |
| People needed | 2 directors (one India-resident 182+ days), 2 shareholders | 2 designated partners (one India-resident) | Authorised representative | Authorised representative | Authorised representative |
| Indicative set-up time | 2–3 weeks after documents | 2–3 weeks | 6–10 weeks | 6–10 weeks | 3–6 weeks |
| Annual compliance load | High (audit, ROC, tax, FEMA) | Medium | Medium (AAC, ROC FC-3/4, tax) | Low–medium (AAC, ROC, tax return) | Medium |
| Exit | Strike-off or liquidation, 4–8 months+ | Closure, 3–6 months | Closure via AD bank, 2–4 months | Closure via AD bank, 2–4 months | Closure on project completion |
| Best for | Operating business, hiring, raising capital | Services firms not raising VC | Service delivery / contracts without a new entity | Market study, sourcing, coordination | EPC, infrastructure, installation contracts |
Headline rates under the Income-tax Act, 2025 for the current tax year, before surcharge, cess and treaty relief. Confirm the rate for your facts before deciding. Rates last verified 2026-10-03.
Three or four questions, and an indication of where you are likely to land. It is a starting point for the conversation, not advice.
Why: A liaison office may represent the parent, study the market and coordinate — but it may not earn income in India.
Watch out for: Parent needs a 3-year profit record and net worth of at least USD 50,000; set-up runs 6–10 weeks through an AD bank.
Why: A project office exists for one awarded contract and closes when the project completes.
Watch out for: General permission applies only if the conditions are met; otherwise RBI approval is needed. Set-up runs 3–6 weeks.
Why: A branch can deliver services and perform contracts within RBI-permitted activities without creating a new Indian entity.
Watch out for: Parent needs a 5-year profit record and net worth of at least USD 100,000, the parent stays fully liable, and the foreign-company tax rate of 35% applies.
Why: A subsidiary limits liability, can hire freely, can issue ESOPs and is the structure investors expect.
Watch out for: You need two directors, one of them resident in India for 182 days or more, and the annual compliance load is the highest of the five.
Why: An LLP suits a services firm that is not raising venture capital, with a lighter annual load than a company.
Watch out for: Foreign investment into an LLP is only possible where the sector is 100% automatic with no conditions attached.
Indian registrations switch on as you hire. Each line is cumulative.
| Headcount in India | Registrations and monthly filings triggered | |
|---|---|---|
| 1 employee | Shops & Establishments; Professional Tax (RC) — deduct and pay monthly; TDS on salary — deposit by 7th, quarterly statements; payroll under the Labour Codes | |
| 10 or more | + ESI (employees earning ≤ ₹21,000) — contribution within 15 days of month-end; + Gratuity applicability notice | |
| 20 or more | + EPF — ECR and payment by 15th; International Worker rules for expats | |
| Any expatriate | FRRO registration within 14 days; EPF as International Worker from day one unless a Social Security Agreement certificate applies | |
| Manufacturing, 20+ workers with power / 40+ without | + Factory licence, pollution consents (CFE/CFO), fire NOC |
