The Complete Foreign Company India-Entry Checklist (2026)

Every foreign company that decides to enter India runs into the same fork in the road almost immediately. Do you incorporate a subsidiary, open a branch office, or start with a liaison office? Get this choice right, and everything downstream (taxation, hiring, banking, how fast you can invoice) falls into place. Get it wrong, and you're refiling paperwork with the RBI a year later, explaining to your board why the "quick" liaison office can't actually sign the contract you need it to sign.

This is a practical, checklist-driven walkthrough of the three routes: what FEMA actually requires you to report and when, how long each path really takes, and what it costs once you count the fees nobody mentions upfront. It's the same walkthrough our team at Corpe runs with founders and CFOs before we touch a single filing, because the structure decision, not the paperwork, is what actually determines whether year two in India is smooth or expensive.

Step 1: Pick your structure

There are really only three doors in, and they answer different questions.

Liaison Office (LO). A pure representative presence. It can do market research, promote the parent's products, and act as a communication channel between headquarters and Indian contacts. It cannot invoice, sign commercial contracts, or earn revenue in India at all. Because it doesn't earn income, it isn't subject to Indian corporate tax, but it also can't do the thing most companies actually want, which is sell something.

Branch Office (BO). An extension of the foreign parent, not a separate legal entity. A BO can invoice and conduct specific RBI-approved activities such as export/import, consultancy, technical support, or R&D. The parent carries unlimited liability for whatever the branch does, though, and profits are taxed as a foreign company's Indian permanent establishment: a base rate of 40% plus applicable surcharge and cess, working out to an effective rate of roughly 41.6-43.7%. To even qualify, the foreign company generally needs a minimum net worth of about USD 100,000 and a profitable track record over the preceding five financial years.

Subsidiary (Wholly Owned Subsidiary or Joint Venture, structured as a Private Limited Company). A genuinely separate Indian legal entity incorporated under the Companies Act, 2013. It's what most foreign companies planning to actually operate, not just observe, end up choosing. A subsidiary can hire, invoice, raise equity, and run an ESOP pool, and it can access concessional corporate tax rates around 25%, all without the activity restrictions an LO or BO carries.

Here's a useful way to frame it: this isn't really three options on equal footing. It's one decision, dressed up as three labels, do you need an operating company in India, or not? If the answer is yes, that points straight to a subsidiary. In the overwhelming majority of cases, a subsidiary is simply a private limited company with 100% foreign shareholding.

Not sure which door fits your plan? This is the single decision Corpe's entry-strategy calls exist to get right. We look at your actual India activity, not just your budget, and tell you plainly if a subsidiary is overkill or a liaison office will box you in within six months.

Step 2: Understand what each route requires before you file anything

LO/BO both require prior RBI approval, applied for via Form FNC through an Authorised Dealer (AD) Category-I bank. You can't apply to the RBI directly. The AD bank reviews your documents (apostilled Certificate of Incorporation, MOA/AOA, latest audited balance sheet) and forwards its recommendation to the RBI. Recent RBI reforms have also removed the old 3-year tenure cap on liaison offices, so once approved, an LO can now operate indefinitely rather than needing periodic renewal, a meaningful change from the pre-2025 framework.
Subsidiary incorporation doesn't need RBI pre-approval at all. It's a Registrar of Companies (RoC) filing under the Companies Act, done via the MCA's SPICe+ portal, which bundles name reservation, incorporation, PAN, TAN, and (through AGILE-PRO-S) GST/EPFO/ESIC registration into one workflow. FDI reporting to the RBI happens after the fact, once shares are actually allotted.

Step 3: The FEMA reporting checklist (this is where companies actually get penalized)

FEMA compliance doesn't end at entity setup. It's an ongoing obligation, and most penalties hit companies for missing recurring filings, not for mistakes at the initial setup stage. Here's what applies once foreign money or shares are involved:

• Form FC-GPR. File within 30 days of allotting equity instruments (shares, CCPS, CCDs) to a non-resident investor, via the RBI's FIRMS portal (Single Master Form).

• Form FC-TRS. Required when shares transfer between a resident and non-resident, filed within 60 days of the transfer of funds or instruments, whichever is earlier.

• FLA (Foreign Liabilities and Assets) Return. The one people forget. Any entity that has ever received FDI must file this annually by July 15, reporting the position as of March 31, even in years with zero new investment activity. It's filed on the RBI's XBRL portal, and the obligation continues even after a foreign investor exits.

• Annual Performance Report (APR). For outbound/overseas investments, due by December 31.

• Annual Activity Certificate (AAC). Specific to LOs/BOs, due by September 30 each year along with audited financials, filed with both the AD bank and the Director General of Income Tax (International Taxation).

• ECB-2. A monthly filing for entities with External Commercial Borrowings, due within 7 days of month-end.

Penalties are not trivial. Late submission fees accrue daily at 0.025% of the transaction amount, payable only within three years of the due date, and an April 2025 penalty overhaul capped minor-offence compounding at ₹2,00,000 while tightening enforcement on repeat violations. A missed FLA filing is also a standard red flag that slows down due diligence in a later funding round. It's the kind of gap investors' lawyers find and then ask you to explain.

This calendar is exactly what Corpe tracks on a client's behalf once an entity is live. FC-GPR, FLA, AAC, and APR deadlines don't pause because you're focused on actually running the business, so we file them before they become the thing a future investor's diligence team flags.

Step 4: Realistic timelines

The timelines below are what actually happens once documents are apostilled and ready, not the optimistic "same day" numbers some incorporation agents advertise.

Subsidiary (Private Limited / WOS):

• Digital Signature Certificates (DSC) for directors: 3-4 days

• Name reservation plus SPICe+ Part B filing (MOA/AOA, PAN, TAN): roughly 6-7 days of filing work

• Certificate of Incorporation issuance: brings the incorporation step to about 2-3 weeks (10-20 working days) end-to-end once documents are in order

• The real bottleneck is the bank account. KYC for a foreign-owned entity's current account commonly takes 20-25 days on top of incorporation, and you can't bring in capital or start operating until it's open

• INC-20A (commencement of business declaration) must be filed within 180 days of incorporation. Miss it, and the company legally cannot start business or borrow

Branch Office: RBI approval plus ROC registration typically runs 45-60 working days end-to-end, though this depends heavily on AD bank due diligence speed and whether the sector needs the Approval Route rather than the Automatic Route.

Liaison Office: Generally 3-6 weeks for RBI/AD bank approval, though more RBI-sensitive sectors or jurisdictions can push this to 8-12 weeks under the newer Specific Approval Route.

Step 5: True costs (beyond the headline "incorporation fee")

Quoted incorporation packages rarely include everything you'll actually pay. Budget for:

• Government/MCA fees. Relatively small on their own (₹2,000-15,000 depending on authorized capital), but layered with stamp duty that varies enormously by state, from effectively nil in Sikkim to roughly ₹10,000+ in Karnataka or Punjab for a similar capital base. Where you register your office matters.

• DSC costs. About ₹2,500 per director, so a two-director company pays roughly ₹5,000 just for signing certificates.

• Name reservation. ₹1,000 per SPICe+ Part A application, and you pay again if your proposed names get rejected. That's a common outcome for generic names; expect close to 1-in-3 first attempts to bounce.

• Professional/CS or legal fees. Typically ₹5,000-25,000 for guiding the filing, more if a firm is also handling apostille coordination and document review from abroad.

• All-in for a foreign-owned Private Limited company. Realistic budgets land around $750-1,500 (₹60,000-1,25,000) and 6-8 weeks, all fees included, closer to the top of that range if you're using a full-service firm rather than filing yourself with local counsel.

• Ongoing costs after incorporation. Expect roughly $450/month in routine bookkeeping and compliance support, plus about $1,800/year in annual statutory filings for a small subsidiary. These recur regardless of revenue.

• Branch/Liaison Office costs. No incorporation fee in the MCA sense, but AD bank charges, apostille/notarization of parent-company documents, and the ongoing AAC filing add a comparable professional-services cost, without any equity or ESOP flexibility to show for it.

The decision, compressed

• Just testing the water, no revenue plans yet. Go with a Liaison Office. It's cheapest to run and easiest to close, but you genuinely cannot sell anything through it.

• A defined project or contract, then you're likely leaving. A Branch Office fits. You can invoice, but you're carrying the parent's unlimited liability and a materially higher effective tax rate for as long as it runs.

• You're building a real, sustained India operation, hiring, raising money, signing customers. Choose a Subsidiary. It comes with higher upfront admin, but it's the only structure built for growth, and retrofitting an LO or BO into a subsidiary later means redoing much of this work anyway.

Before you file anything

This is a research summary to help you scope the decision, not legal, tax, or investment advice. FDI sectoral caps, GST rates, stamp duty, and FEMA penalty structures shift often enough (several of the figures above changed within the current financial year alone) that you should verify current numbers with a local Chartered Accountant, Company Secretary, or law firm, and with your AD bank, before committing to a structure or a filing date.

Planning your India entry? Corpe handles the full path end to end: entity selection, subsidiary/branch/LO incorporation, RBI and FEMA reporting, and the ongoing compliance calendar that keeps you out of due-diligence trouble later. Talk to Corpe before you file, and we'll tell you honestly which structure your specific plan actually needs.