Key takeaway
Decide two things first: the structure (private limited company, LLP or One Person Company) and whether your investment is on a repatriation or non-repatriation basis. The rest — incorporation, banking, FEMA filings and tax registration — follows from those choices.
Step 1: Choose a structure
- Private limited company — best for outside investment and growth; needs at least two directors.
- LLP — flexible, with limited liability.
- One Person Company — NRIs have been able to form one since 2021.
- Subsidiary — if you already have a company abroad.
Step 2: Choose the investment route
- Repatriation basis — treated as foreign investment; reportable; profits and capital can be taken abroad subject to rules.
- Non-repatriation basis — treated like domestic investment, with fewer filings but limits on taking money out.
- Check whether your sector is under the automatic route, needs approval, or is prohibited.
Step 3: Incorporate
- Digital signature certificates and director identification numbers.
- Name reservation and incorporation filing on the MCA portal.
- At least one director must stay in India for 182 days or more in the financial year.
- Foreign identity documents apostilled or attested.
Step 4: Bank and capital
Open a bank account in India and bring capital through banking channels — from abroad or your NRE/NRO account. Report foreign investment through your bank within the required time.
Step 5: Registrations
- PAN and TAN
- GST, if applicable
- State and local licences for your activity
Step 6: Ongoing compliance
- Board and shareholder meetings, statutory registers
- Annual filings with the Registrar of Companies
- Audit and tax returns
- Annual FEMA reporting where applicable
Frequently asked questions
Can I be the only director?
A private company needs at least two directors, and one must meet the residence requirement.
Can I run the company from abroad?
Yes, with a resident director and good compliance support.
Do I need a shareholders’ agreement?
It is strongly advisable whenever there is more than one owner.
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References
- Companies Act, 2013 — Section 149(3)
- Limited Liability Partnership Act, 2008
- Foreign Exchange Management (Non-Debt Instruments) Rules, 2019
Last reviewed: November 2026.
The information provided is for general educational purposes only and does not constitute legal advice. Applicable laws and procedures may vary depending on the facts, jurisdiction, and circumstances of each matter. Consult a qualified legal professional before taking action.
