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Government of India has put in place a policy framework on Foreign Direct Investment (FDI).
This framework is embodied in the Circular on Consolidated FDI Policy.
FDI – Foreign Direct Investment
FPI - Foreign Portfolio Investment
Index
1. Entry In India for Foreign Business in India .........................................................................3
2. Permission of RBI (Reserve Bank of India)...........................................................................3
3. Requirements for Establishing a Company in India .............................................................3
4. Registration of a Private Limited Company.........................................................................4
5. Compliance Under FEMA 2000 ..........................................................................................4
6. Steps to Get a New Company Incorporated in India............................................................4
7. Duration for Company Registration ....................................................................................5
8. Basic Taxation In India.........................................................................................................5
9. A Quick Note on Company Status In India ..........................................................................6
10. Contact:..............................................................................................................................6
Foreign
Investment
FDI FPT Venture Captial

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1. Entry In India for Foreign Business in India
There are mainly two types of entry strategy for foreign businesses in India, registration of
1) A company or -
A foreign company register company in India to look after its Indian operations, to
promote its business interests, to spread awareness of the company's products and to
explore further opportunities. Liaison offices are not allowed to carry on any business or
earn any income in India and all expenses are to be borne by remittances from abroad.
2) Establishing a branch/liaison office -
Foreign companies can open branch offices for the purpose business.
2. Permission of RBI (Reserve Bank of India)
A body corporate incorporated outside India (including a firm or other association of
Individuals), desirous of opening a Liaison Office (LO) / Branch Office (BO) in India have to
Obtain permission from the Reserve Bank. The applications from such entities will be
Considered by Reserve Bank.
3. Requirements for Establishing a Company in India
For Start a company in India, a minimum of two persons and an address in India are
required. A private limited company in India must have a minimum of two directors
(persons) and a minimum of two shareholders (can be persons or corporate entities). A

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foreigner can act as Director of an Indian company. No permissions are needed for this. It is
possible to have a company with only foreign citizens as directors. However, section 149(3)
of the Companies Act, 2013 makes it mandatory for every company to have a Director who
has stayed in India for a total period of at least 182 days in the previous calendar year. It may
be noted that such a resident Director need not be a citizen of India.
4. Registration of a Private Limited Company
A private limited company can be registered by making an application to the Registrar of
Companies in place where the registered office shall situate. The following are the
guidelines and procedure prescribed by the Act for registering a private limited company.
 Minimum paid up capital for a “private limited company” shall not be less than 1 lakhs
Indian rupees.
 Minimum 2 members required to start company
 Company Name should end with suffix “Pvt Ltd
5. Compliance Under FEMA 2000
The FEMA (Establishmentin India of branch office or other place of business) regulation 2000 governs
the process of establishment of Liaison office in India. The RBI or Reserve Bank of India is the
controlling authority for setting up Liaison Office in India. The applications are required to be made
in form FNC I to the RBI. RBI shall scrutinise the application.
6. Steps to Get a New Company Incorporated in India
 Each of the first shareholders and directors, who are Indian citizens (including
non-residents) of the new company needs to get a Permanent Identification Number.
 (PAN) from Income Tax Department of Government of India.
Foreign shareholders and directors do not need a Permanent Identification Number

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(PAN) from Income Tax Department of Government of India. A foreign citizen must have a
valid passport along with proof of address.
 Application of DIN ( Director Identification Number )
 Decide the main objects of the company.
 Fill and file company incorporation documents
7. Duration for Company Registration
Time taken for incorporating a company is likely to be appx. 2 weeks if the Shareholders
and Directors are Indian. In case of foreign shareholders and directors, the most important
step is to get identity and address proof attested by Indian consulate of the home country of
the foreign persons. This is necessary for getting digital signature and for getting Director
Identification Number (DIN) for the foreign citizens.
8. Basic Tax Head In India
S.No. Tax Head Government Applicable On
1 Income Tax Union Government Income
2 Central Excise Union Government Manufacturing In India
3 Service Tax Union Government On Services
4 Sales Tax State Government
On Sale & Purchase of
goods

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9. A Quick Note on Company Status In India
S.No. Parameter Private Limited
1 Applicable Law The Companies Act, 2013
2 Distinct Entity
Company is a separate entity distinct from its
shareholders.
3
Minimum number of
members
Two
4 Monitoring Documents
Memorandum of Association and Articles
of Association
5 Resident Director At least one director must be resident of India
6 Managed By Directors
7 Audit Compulsory
8 Foreign Investment Subject to FDI Policy
10. Contact:
DISCLAIMER:
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or
entity. The contents should not be construed as legal advice or an invitation for a lawyer-client relationship and should not rely on
information provided herein. No one should act on such information without appropriate professional advice after a thorough
examination of the particular situation.
A N Bhutada & CO. Chartered Accountants
Address: Office No. 145, Ashoka Mall, Bund Garden ,
Pune – 411 001
Cell – 80555 66789
Email: amitbhutada@outlook.com