Set up a company in India.
The world’s most populous nation, fifth-largest economy heading for third, and one of the most ambitious tax-incentive frameworks in Asia. Domestic CIT can be elected at 22% (effective 25.17%) under Section 115BAA, with the new GIFT IFSC regime now at 15% effective from the 2026-27 Budget. 100% FDI on automatic route for most sectors. India is open for serious business.
The standard structure for foreign investors is a Private Limited Company (Pvt Ltd), registered under the Companies Act 2013. You reserve the company name with the Ministry of Corporate Affairs (MCA) through the SPICe+ portal, obtain Digital Signature Certificates (DSC) and Director Identification Numbers (DIN) for the proposed directors, draft the Memorandum and Articles of Association (MOA and AOA), and register with the Registrar of Companies (ROC). The single SPICe+ form now combines name reservation, incorporation, PAN, TAN, GST, EPF, and bank account opening — significantly streamlined since 2020.
Standard formation takes 4 to 8 weeks end-to-end. Corporate tax under Section 115BAA is 22% base (effective 25.17% including 10% surcharge and 4% cess) — the default for most companies. A foreign branch pays 35% base (effective ~38%), which is why a domestic subsidiary almost always makes more sense. GIFT IFSC units now access a 15% effective rate post-holiday under the 2026-27 Budget. Section 115BAB’s 15% manufacturing rate (effective 17.16%) was available to companies commencing production by 31 March 2024.
Grant & Graham coordinates Indian formations through senior local counsel in Mumbai, Bengaluru and Delhi NCR, working alongside our Singapore office for broader APAC structuring. MCA registration, PAN/TAN, GST, FEMA/RBI compliance for FDI, banking, payroll, EPF/ESI, and ongoing accounting and statutory compliance — coordinated end-to-end.
22% under 115BAA. 15% in GIFT IFSC. 38% for foreign branches.
India’s corporate tax rate is not a single number. Domestic companies electing the 115BAA regime pay an effective 25.17% (22% base + 10% surcharge + 4% cess) with no MAT. New manufacturing companies under 115BAB pay 17.16% effective (if they commenced production by 31 March 2024). GIFT City IFSC units now enjoy a 15% effective rate post-holiday under the Union Budget 2026-27 — the most globally competitive regime in India. The gap between a domestic subsidiary (25.17%) and a foreign branch (~38%) is a deliberate policy signal: incorporate locally, do not branch in.
Other notable items: GST 18% standard (5%/12%/18%/28% slabs). MAT reduced from 15% to 14% from FY 2026-27 (Finance Act 2026); 9% MAT for IFSC units. Dividend Distribution Tax abolished 2020 — dividends taxed at shareholder level. WHT on dividends to non-residents 20% (treaty rates 5–15%). Eligible startups under Section 80-IAC can claim 100% profit deduction for any 3 consecutive years within the first 10 years (DPIIT recognition required). PLI schemes across 14 sectors. ~95 double taxation treaties.
Nine reasons businesses choose India.
India is now the world’s most populous nation and its fastest-growing major economy. For companies looking at Asia entry, services delivery, manufacturing diversification, or financial services through GIFT City, the case has rarely been stronger.
Fastest-growing major economy
~6–7% real GDP growth annually. 5th largest economy by GDP (~USD 4.4 trillion). On trajectory to overtake Germany and Japan and become the 3rd largest economy by 2027–28. Younger demographic profile than China — median age 28. Rising middle-class consumer base of ~430 million people.
GIFT IFSC at 15% effective
The International Financial Services Centre at GIFT City (Gandhinagar) now offers a 15% effective post-holiday tax rate (reduced from 22% in the Union Budget 2026-27). 9% MAT. 10-year tax holiday available. Suited to banks, insurers, fund management, fintech, aircraft and ship leasing, and global capability centres.
100% FDI on automatic route
The vast majority of sectors permit 100% FDI without prior government approval — the automatic route. Sector-specific caps apply in defence, broadcasting, telecom infrastructure, single-brand retail, multi-brand retail, insurance and a small number of others. Approval-route sectors are increasingly limited.
English-language workforce
Largest English-speaking professional workforce in the world after the United States. ~140 million working English speakers. Substantially lowers operational friction for foreign businesses. Major business cities (Mumbai, Bengaluru, Delhi, Hyderabad, Pune, Chennai) operate primarily in English for commercial purposes.
IT & services dominance
Global leader in IT services, BPO/KPO, and Global Capability Centres (GCCs). ~1,800 GCCs employing 1.9 million people. Bengaluru is the largest tech ecosystem in Asia outside of China. Strong engineering, software, R&D, AI/ML, and analytics talent at materially lower cost than US/EU equivalents.
Manufacturing & PLI schemes
Production Linked Incentive (PLI) schemes across 14 sectors with ~USD 26 billion in committed government incentives. Sectors: electronics, semiconductors, pharmaceuticals, automotive components, advanced batteries, solar PV, textiles, food processing, drones. Make in India increasingly credible after iPhone manufacturing scale-up.
Startup ecosystem & tax holiday
3rd largest startup ecosystem globally with 110+ unicorns. DPIIT-recognised startups under Section 80-IAC can claim 100% profit deduction for any 3 consecutive years within the first 10 years. Strong domestic VC market. Bengaluru, Mumbai, Delhi NCR are mature funding hubs.
Digital infrastructure (UPI, Aadhaar, DPI)
Digital Public Infrastructure stack is world-class: UPI processes 16+ billion transactions monthly (50% of global real-time payments). Aadhaar digital identity covers 1.3+ billion. ONDC for open commerce. DigiLocker. The lowest data costs of any major economy. Genuine competitive advantage for digital businesses.
Strategic non-aligned positioning
QUAD member, G20 (and 2023 G20 President), I2U2, BRICS, SCO, Commonwealth. Strategic relationships across US, EU, UK, Japan, and the Gulf. Free trade agreements with UAE (CEPA 2022), Australia (ECTA 2022), EFTA (2024). UK FTA close to conclusion. India does not have to choose sides — useful for global supply chain rebalancing.
Eight legal structures — one usually fits.
For most foreign investors, the Private Limited Company (Pvt Ltd) is the practical default — it is the structure that elects 115BAA at 25.17%. LLP is favoured by professional services. GIFT IFSC units access the new 15% regime. Foreign branches, liaison offices, and project offices have specific narrow use cases — but for ongoing operations a subsidiary is almost always the right answer.
Private Limited Company
The standard structure for foreign investors. 2 to 200 shareholders. Minimum 2 directors (1 must be Indian resident). No minimum capital. Can elect Section 115BAA at effective 25.17%. Audited annual accounts mandatory. SPICe+ single-window incorporation.
GIFT IFSC Unit
Pvt Ltd or LLP registered at GIFT City, Gandhinagar. 15% effective post-holiday rate (reduced from 22% in 2026-27 Budget). 9% MAT. 10-year tax holiday. Bank, insurance, asset management, broking, aircraft/ship leasing, reinsurance, global capability centres.
Limited Liability Partnership
Separate legal personality with limited liability. Minimum 2 designated partners (1 must be Indian resident). Flat 30% tax + surcharge + cess. Cannot elect 115BAA/115BAB. No audit requirement below ₹40 lakh turnover. Common for professional services, consulting, JVs.
One Person Company
Private Limited Company variant with one shareholder. Designed for solo founders. Must convert to Pvt Ltd or Public Ltd if paid-up capital exceeds ₹50 lakh or turnover exceeds ₹2 crore. Useful for consultants and freelancers seeking limited-liability protection.
Public Limited Company
Minimum 7 shareholders, 3 directors, ₹5 lakh paid-up capital. Shares freely transferable. Required for raising public capital via stock exchange listing (NSE, BSE). Used by larger Indian operations and pre-IPO foreign-controlled companies preparing for listing.
Branch Office
Branch of a foreign company conducting business in India. Requires RBI approval. Taxed at 35% base + surcharge + cess (~38% effective) — the highest rate. Use cases: export/import trading, professional services, research, agency, IT/software. Generally avoid in favour of a Pvt Ltd subsidiary.
Liaison Office
Foreign company representation only. Cannot generate revenue or sign contracts. RBI approval required. Limited to market research, parent-company liaison, networking. Initial approval for 3 years, renewable. Useful for market exploration before committing to a Pvt Ltd subsidiary.
Project Office
Foreign company carrying out a specific project in India (typically infrastructure or EPC contracts). RBI-permitted but project-bounded. Taxed at branch rates. Closed when the project concludes. Suited to contractors and engineering firms with defined-term contracts.
Talk to us first
Pvt Ltd for 90% of cases. LLP for professional services. OPC for solo founders. GIFT IFSC for financial services and global capability centres. Avoid branch offices unless the use case is genuinely narrow — the 12-point tax premium is real.
Book a call →From decision to live entity.
The end-to-end SPICe+ registration sequence for a standard Indian Private Limited Company, coordinated by Grant & Graham and senior Indian counsel. Pvt Ltd in Mumbai or Bengaluru: 4 to 8 weeks end-to-end.
Structure & location
Pvt Ltd, LLP, OPC, or GIFT IFSC unit. Operating state (state-level stamp duty and registration fees vary). City (Mumbai for finance, Bengaluru for tech, Hyderabad for tech and pharma, Delhi NCR for government and consumer, Pune for manufacturing and IT, Chennai for auto and IT). Confirm FDI route (automatic vs approval) for the proposed sector.
Digital Signature Certificates (DSC)
Obtain Class 3 Digital Signature Certificates for all proposed directors and authorised signatories. Required for all MCA online filings under the Companies Act 2013 and Information Technology Act 2000. Typically 2–5 business days. Notarised and apostilled identity documents required for foreign directors.
MCA →Director Identification Number (DIN)
Each proposed director must obtain a Director Identification Number. Foreign directors apply through SPICe+ at incorporation. At least one director must be ordinarily resident in India (182+ days in the previous calendar year) — this is a hard requirement. Grant & Graham can arrange resident director services where the foreign client has no local representative initially.
Name reservation (RUN / SPICe+)
Reserve the company name with the MCA via the SPICe+ portal. Up to 2 names submitted for approval (typically resolved within 1–3 business days). Name must comply with the Companies (Incorporation) Rules 2014 — not identical or deceptively similar to existing names, not in a prohibited list. Reservation valid for 20 days.
SPICe+ incorporation (Pt A & B)
Single integrated form on the MCA portal: name reservation, incorporation, PAN, TAN, EPFO, ESIC, Profession Tax (state-specific), bank account opening, and GST registration (optional). MOA and AOA filed as INC-33 and INC-34. Subscriber declaration (INC-9). Registered office proof. Form filed with applicable stamp duty (state-specific). Certificate of Incorporation typically issued within 7–15 days.
PAN, TAN & bank account
Permanent Account Number (PAN) and Tax deduction Account Number (TAN) issued automatically with the Certificate of Incorporation under the integrated SPICe+ process. AGILE-PRO-S form also opens the company’s bank account — the bank reaches out after incorporation to complete KYC, beneficial ownership disclosure, and physical signing where required.
Income Tax Dept →GST registration
Mandatory if turnover exceeds ₹40 lakh (₹20 lakh for services in most states; lower thresholds in special category states). Voluntary GST registration common from day one to enable input tax credits and B2B invoicing. Filed through the GSTN portal. 5%/12%/18%/28% slabs — standard rate 18%.
GST Portal →FEMA / RBI FDI reporting
If foreign capital is being injected, FDI flows must be reported to the Reserve Bank of India through the FIRMS portal within 30 days of receipt of inward remittance. Form FC-GPR filed within 30 days of share allotment. Compliance is mandatory and routinely audited. Critical to get the reporting sequence right or face penalties.
EPF & ESI registration
Employees’ Provident Fund (EPF) registration mandatory once 20+ employees are on payroll (in covered establishments). Employees’ State Insurance (ESI) for organisations with 10+ employees earning up to ₹21,000/month. Both registered through SPICe+ AGILE-PRO-S at incorporation — activated when the headcount threshold is met. Professional Tax registration at state level where applicable.
EPFO →Tax regime election & ongoing compliance
Elect Section 115BAA (22% effective 25.17%) or remain under the standard 25%/30% regime — election is irrevocable. Filed in the first ITR after incorporation. Ongoing: monthly GST returns, quarterly TDS returns, monthly EPF/ESI returns, annual ROC filings (AOC-4, MGT-7), annual income tax return (ITR-6) by 31 October following the financial year-end (31 March). Tax audit required above ₹1 crore turnover (₹10 crore where 95% of transactions are digital).
What it costs to incorporate & run.
All figures are indicative for a standard Private Limited Company in Mumbai or Bengaluru with one foreign corporate shareholder. India is mid-complexity by global standards — the SPICe+ integrated process is genuinely streamlined, but RBI/FEMA reporting and ongoing statutory compliance carry real cost.
One-time setup
GIFT IFSC unit adds approximately €3,000–€5,000 (IFSCA registration, additional compliance). LLP setup typically €2,800–5,000. Branch / liaison office requires RBI approval and adds €3,500–7,000.
Ongoing monthly / annual
Tax audit (Section 44AB) mandatory once turnover exceeds ₹1 crore (₹10 crore where 95%+ of transactions are digital). Transfer pricing documentation required for international transactions. Form 3CEB filing mandatory for cross-border related-party flows.
Get an estimate in 30 seconds.
Three quick questions. We will give you a realistic cost range and timeline for your situation, and route the answers straight into a fixed-price quote request.
Which company structure are you considering?
How is the shareholding structured?
What do you need from us?
The legal framework to know.
A summary of the core legislation governing companies in India. Substantive work delivered through Grant & Graham and senior Indian legal, tax and accounting counsel.
Corporate Law
- Companies Act 2013 (amended 2024)
- Limited Liability Partnership Act 2008
- Indian Partnership Act 1932
Tax Law
- Income-tax Act 1961 (Sections 115BAA, 115BAB, 80-IAC)
- Central Goods & Services Tax Act 2017
- State GST Acts & Integrated GST Act
- Finance Act 2026 (MAT reduced to 14%)
Employment Law
- Industrial Disputes Act 1947
- Minimum Wages Act 1948
- Employees’ Provident Funds Act 1952
- Code on Wages 2019 (replaces 4 earlier laws)
Data & Digital
- Digital Personal Data Protection Act 2023 (DPDPA — operational)
- Information Technology Act 2000
- CERT-In data breach notification
Foreign Exchange & FDI
- Foreign Exchange Management Act 1999 (FEMA)
- Consolidated FDI Policy 2020+
- IFSCA Act 2019 (GIFT IFSC)
- SEBI Regulations (listed/AIF/FPI)
Intellectual Property
- Trade Marks Act 1999
- Patents Act 1970 (amended 2005)
- Copyright Act 1957
- Designs Act 2000
India, answered.
Four steps from enquiry to live entity.
Discovery call
30-minute conversation to understand your business, sector, FDI route, structure preference, GIFT IFSC relevance, resident director needs, and tax regime selection. Honest assessment of fit.
Recommendation
Senior advisory on the right structure (Pvt Ltd, LLP, OPC, IFSC, branch), city, registered capital, Section 115BAA election, banking partner. Fixed quote in EUR or INR.
End-to-end formation
SPICe+ filing, DSC, DIN, PAN, TAN, GST, EPF, ESI, RBI/FEMA, banking, professional tax. Singapore-coordinated, executed through senior counsel in Mumbai, Bengaluru or Delhi NCR.
Ongoing support
Retained accounting, monthly GST, quarterly TDS, payroll, EPF/ESI, annual statutory audit, ROC filings, ITR-6, transfer pricing, DPDPA compliance, structural changes as you scale.
Ready to incorporate in India?
Tell us in 25 minutes what you need. We will tell you honestly whether India is the right fit, which structure makes sense (Pvt Ltd, LLP, GIFT IFSC), and which city and tax regime serves your business — then handle the setup end-to-end through senior local counsel.