How can foreign companies "take root" in India? In recent years, with the advancement of the "Make in India" policy, India has gradually become an important market for global business layout. Many foreign investors and companies are considering setting up companies in India. However, due to the complex administrative procedures and numerous legal terms in India, many people ask, "How do I start a company in India? What materials do I need to prepare?" This article will introduce the basic process and legal requirements for foreign-invested enterprises to set up companies in India, helping you avoid detours and successfully establish a presence.

I. What are the Options for Establishing a Company in India?

Foreign investors can set up entities in India through various methods. The common forms include:

Most foreign investors prefer to set up a Private Limited Company because it allows 100% foreign ownership, has a low establishment threshold, and offers a broad scope of business operations.

II. What are the Restrictions on Foreign Investment?

In India, foreign direct investment must comply with the "Foreign Direct Investment Policy." The foreign ownership limit varies by industry:

Most industries fall under the "automatic approval" category, where foreign investors do not need to obtain prior permission, but they still need to file with the Reserve Bank of India as required.

III. The Basic Process for Foreign-Invested Enterprises to Set Up Companies in India

The following is the main process for setting up a Private Limited Company:

Step 1: Obtain Digital Signature Certificates for Company Executives

• The registration process in India is electronic. All company directors/shareholders must first apply for digital signatures.

• Passport scans, photos, and other documents are required.

Step 2: Apply for Pre-Approval of Company Name

• Apply for the company name to the Ministry of Corporate Affairs in India.

• It is recommended to prepare 2–3 alternative names to avoid duplication.

Step 3: Prepare and Submit Registration Documents

Submit the following materials:

• Articles of Association and Bylaws;

• Identity proofs of directors (passport), photos, and address proofs;

• Proof of registered address (lease agreement or ownership document);

• Information on investors and shareholding structure.

After submission, registration is generally completed within 5–10 working days, and the system will issue a company establishment certificate.

IV. What Procedures Need to be Completed After Company Registration?

Completion of registration does not mean everything is settled. Several additional steps are necessary:

V. Can Foreign Companies Fully Control Their Indian Subsidiaries?

Yes, provided that the industry allows 100% foreign ownership. For manufacturing, software development, e-commerce, and service companies, it is not necessary to find a local partner. The company can set up a wholly-owned subsidiary in India, with directors and bank authorizers all appointed by the foreign parent company (legal identity proofs must be provided).

However, in actual operations, it is recommended to:

• Appoint a "local representative" or resident in charge;

• Establish financial and legal compliance systems;

• Keep core documents such as company seals and financial vouchers within India for regulatory purposes.

VI. Common Misconceptions and Legal Tips in Company Establishment

VII. Practical Suggestions: Plan Ahead to Avoid Last-Minute Remedies

Before setting up a company in India, it is recommended to prepare the following in advance:

• Clarify the scope of the company's business and verify whether 100% foreign ownership is allowed;

• Choose a company name and registration location;

• Determine the shareholders/directors and prepare identity proof documents;

• Consult on tax and labor law obligations;

• Draft a basic Articles of Association and establish a reasonable governance structure (such as authorization limits, bank operation rights, etc.).

Conclusion

Setting up a company in India is not complicated. As long as you plan ahead and comply with the law, the general process can be completed within 1–2 months. It is recommended that companies seeking to enter the Indian market work with local lawyers and accountants to avoid detours and focus more energy on business establishment and market expansion.

Editor's Note

Since China's reform and opening up, especially after joining the World Trade Organization, China's economy has increasingly integrated into the global economic system. With the growing economic strength, many Chinese companies have already or are about to "go global" to explore global business opportunities. Undoubtedly, China is one of the biggest beneficiaries of economic globalization. Considering the huge size of China's economy, it is inevitable that various contradictions and conflicts will arise with other countries, especially developed Western countries. Since 2018, the trade friction between China and the United States has continuously escalated, with the U.S. imposing high tariffs on Chinese goods. Chinese export companies are facing very severe challenges. To avoid tariff barriers and optimize global layout, many export companies have had to relocate their production capacity overseas. Providing legal protection for Chinese companies' overseas investments and global layout is both a historical opportunity and a social responsibility for Chinese lawyers.

This public account publishes a series of articles on the legal systems, foreign investment policies, labor employment, tax accounting, intellectual property, environmental protection, import and export (foreign exchange) control, work visas, and other investment environment-related aspects of major investment destination countries, for reference by companies intending to "go global." This article does not constitute any investment or legal advice or suggestions. The content of this article is collected and organized with the help of artificial intelligence tools such as ChatGPT and Grok. Some parts have not been confirmed through professional and rigorous due diligence.