INCORPORATION
A Private Limited Company in India needs two members, so a foreign parent holds one share through a nominee. This guide covers Forms MGT-4, MGT-5 and MGT-6, who should be the nominee and the FEMA reports that follow.
Incorporation
Written by CA Nandini, Krystal7 Consultants. Last updated 26 October 2026.
A Private Limited Company in India needs at least two members, so a foreign parent wanting 100 percent holds one share through a nominee. The nominee is the registered holder of that share and the parent keeps the beneficial interest. Under section 89 of the Companies Act, 2013, the nominee gives the company Form MGT-4 and the parent gives Form MGT-5. The company then files Form MGT-6 with the Registrar within 30 days of receiving the declaration. A non resident nominee from the parent's group keeps every share inside the FC-GPR.
This page explains why the second member is needed and how the section 89 and section 90 filings work. It also covers who should act as nominee and what FEMA (the Foreign Exchange Management Act, 1999) requires when the nominee changes. It ends with a worked example, common mistakes, a checklist and FAQs.
Section 3(1)(b) of the Companies Act, 2013 lets two or more persons form a private company. Section 3(1)(c) lets one person form a One Person Company (OPC). There is no single member version of an ordinary Private Limited Company. A foreign parent that wants to own the whole Indian company still needs a second name on the register.
Section 2(68) sets the upper end. A private company's articles must limit its members to 200, except in an OPC.
| Company type | Minimum members | Upper limit | Provision |
|---|---|---|---|
| Private Limited Company | 2 | 200 (counted as section 2(68) provides) | Sections 3(1)(b) and 2(68) |
| One Person Company | 1 | 1 | Sections 2(62) and 3(1)(c) |
| Public company | 7 | Not limited by section 2(68) | Section 3A |
Source: Companies Act, 2013, sections 2(62), 2(68), 3(1) and 3A (section 3A inserted by the Companies (Amendment) Act, 2017), read 26 Oct 2026.
Section 3A deals with this. Suppose a private company's members fall below two and it carries on business for more than six months like that. Every person who is a member during that time, and knows of it, becomes severally liable for the company's debts contracted after those six months. Creditors can sue each such member separately.
A nominee who leaves without a replacement puts the parent's limited liability for new debts at stake once six months pass.
The parent subscribes to every share but one. A nominee subscribes to the last share and holds it for the parent, so the parent holds the beneficial interest in all of them.
On our filings, the nominee also signs the memorandum and articles as a subscriber. That puts the nominee's KYC inside the incorporation pack, so pick the nominee before drafting starts. Our guide to a wholly owned subsidiary in India covers the rest of the setup.
A nominee shareholder is a member whose name is on the register of members but who holds the shares for someone else. Section 2(55) makes a person a member when the person subscribes to the memorandum or has their name entered in the register. The person who owns the economic and voting interest is the beneficial owner.
Section 89(10), inserted by the Companies (Amendment) Act, 2017, defines beneficial interest in a share. It includes the right, directly or indirectly, through any contract or arrangement, to exercise or cause to be exercised the rights attached to the share. It also includes the right to receive or take part in any dividend or other distribution on that share.
| Point | Registered holder (nominee) | Beneficial owner (parent) |
|---|---|---|
| Name on the register for the nominee share | Yes | No |
| Member under section 2(55) | Yes | Yes, through its own shares |
| Casts the vote on the nominee share | Yes, under section 47(1) | No, but directs the vote under section 89(10) |
| Right to the dividend on the nominee share | Holds legal title only | Yes, under section 89(10) |
| Declaration under section 89 | Form MGT-4 | Form MGT-5 |
| Counts towards the two member minimum | Yes | Yes |
Source: Companies Act, 2013, sections 2(55), 3(1), 47(1) and 89(10); MCA form titles for MGT-4 and MGT-5, read 26 Oct 2026.
Section 47(1) gives every member holding equity shares a vote on every resolution placed before the company. On a poll, the vote is in proportion to the member's share of the paid up equity capital. The nominee casts the vote on its one share, and the nominee agreement decides how.
Section 89 needs three documents for one nominee share. Two are declarations given to the company. The third is the company's return to the Registrar of Companies (ROC).
The nominee declares to the company that it holds the share but not the beneficial interest. It names the beneficial owner. This is the declaration under section 89(1). MCA titles Form MGT-4 a declaration by the registered owner of shares.
The parent declares to the company that it holds the beneficial interest, and gives the nominee's details. This is the declaration under section 89(2). MCA titles Form MGT-5 a declaration by the beneficial owner. A later change in the beneficial interest needs a fresh declaration under section 89(3).
Section 89(6) requires the company to note the declaration in the register concerned. It must then file a return with the Registrar within 30 days of receiving the declaration. That return is Form MGT-6. The MCA instruction kit lists the declarations under sections 89(1), 89(2) and 89(3) as its attachments.
A director, manager, CEO, CFO or company secretary of the company signs Form MGT-6 digitally. We collect the signed MGT-4 and MGT-5 on the day of allotment. The 30 day clock then starts on a date we know, not on the day a scan arrives from abroad.
The normal fee depends on the company's nominal (authorised) share capital. Late filing adds a multiple of that fee.
| Nominal share capital | Normal fee |
|---|---|
| Less than ₹1,00,000 | ₹200 |
| ₹1,00,000 to ₹4,99,999 | ₹300 |
| ₹5,00,000 to ₹24,99,999 | ₹400 |
| ₹25,00,000 to ₹99,99,999 | ₹500 |
| ₹1,00,00,000 or more | ₹600 |
Source: MCA, Instruction Kit for eForm MGT-6, Annexure A, read 26 Oct 2026.
| Delay after the due date | Additional fee |
|---|---|
| Up to 30 days | 2 times the normal fee |
| Over 30 and up to 60 days | 4 times the normal fee |
| Over 60 and up to 90 days | 6 times the normal fee |
| Over 90 and up to 180 days | 10 times the normal fee |
| More than 180 days | 12 times the normal fee |
Source: MCA, Instruction Kit for eForm MGT-6, Annexure A, read 26 Oct 2026.
Section 89(5) puts the penalty on the person who fails to declare. Section 89(7) puts it on the company and its officers who do not file the return. A wholly owned subsidiary cannot use the small company relief in section 446B, because section 2(85) keeps subsidiaries out of the small company definition.
The amounts sit in the comparison table in the next section.
Section 90 looks for the individual at the top of the chain, not the holder of one share. Section 90(1), as substituted in 2017, covers an individual with beneficial interests of not less than 25 percent. The rules can prescribe another percentage. The interest can be held alone, together with others, or through other persons or trusts.
That individual declares the interest to the company. Section 90(4A), added in 2019, requires the company to take steps to identify its significant beneficial owners (SBOs). Under section 90(4), the company files a return of SBOs with the Registrar, which MCA's online filing service names Form BEN-2.
The company can send a notice under section 90(5) to anyone it believes is an SBO. That person must reply within 30 days under section 90(6). If the reply is missing or unsatisfactory, the company applies to the National Company Law Tribunal under section 90(7). It has 15 days from the end of the notice period.
For a wholly owned subsidiary, the nominee is not normally an SBO, because it holds no beneficial interest in its share. The parent is a body corporate, so the trail runs through the parent's shareholders to the individuals behind it. Our guide on significant beneficial owner filings in Form BEN-2 for a foreign parent sets out the current threshold and the tests. Our note on the LinkedIn SBO case looks at when a parent's CEO can be an SBO.
| Point | Section 89 | Section 90 |
|---|---|---|
| Question asked | Who holds the share for whom | Which individual has significant beneficial ownership |
| Who declares | The registered holder and the beneficial owner | The individual SBO |
| Company's return to the ROC | Form MGT-6, within 30 days of receiving the declaration | Form BEN-2 |
| Threshold | Every share held for another person | 25%, or the other percentage prescribed |
| Penalty on the person | ₹50,000 plus ₹200 a day, up to ₹5 lakh | ₹50,000 plus ₹1,000 a day, up to ₹2 lakh |
| Penalty on the company | ₹1,000 a day, up to ₹5 lakh | ₹1 lakh plus ₹500 a day, up to ₹5 lakh |
| Penalty on an officer in default | ₹1,000 a day, up to ₹2 lakh | ₹25,000 plus ₹200 a day, up to ₹1 lakh |
Sources: Companies Act, 2013, sections 89 and 90 (as amended in 2017 and 2019); MCA, Penalties and Offences under Companies Act, 2013 (6 May 2024); MCA BEN-2 service title, read 26 Oct 2026.
Three kinds of nominee are common. Each works under company law, but they differ under FEMA. The Indian company reports shares issued to non residents in Form FC-GPR, and transfers between residents and non residents in Form FC-TRS.
| Nominee | Position at allotment under FEMA | If the nominee changes later | Practical points |
|---|---|---|---|
| A group company outside India | Non resident allottee, inside the FC-GPR | A move to another non resident holding on a repatriation basis is not an FC-TRS case | Survives staff changes; signs through an authorised signatory; needs corporate KYC |
| A foreign director or officer of the parent | Non resident allottee, inside the FC-GPR | Same as a group company; a death needs a transmission first | Personal KYC through the country document route; the role ends when the job ends |
| An Indian resident, such as the resident director | Resident allottee, so that share sits outside the FC-GPR | A move to a non resident is a sale at or above the price the pricing guidelines set, reported in FC-TRS within 60 days | Easy KYC in India; FEMA work at exit; a gift needs RBI approval and a relative |
Sources: RBI, FEMA 395/2019-RB, regulation 4 (amended up to 13 Jun 2026); FEMA (Non Debt Instruments) Rules, 2019, rules 9, 13 and 21; RBI, Master Direction on Foreign Investment in India, paras 7.7.1 and 8.2 (updated up to 15 Jun 2026), read 26 Oct 2026.
A sister company or the parent's own holding company abroad can hold the share. It is a person resident outside India, so the Indian company reports its share in the same FC-GPR as the parent's.
A group company does not resign or die. That makes it the most stable choice for a group with more than one entity. The cost is a second set of corporate KYC and a board resolution of that company.
This suits a group with one entity abroad. The officer is a non resident, so the whole issue again sits in the FC-GPR.
On our filings, the UAE does not use the apostille route; documents go through attestation by the UAE Ministry of Foreign Affairs (MOFA) and consularisation. For Commonwealth countries, apostille has not been mandatory, and simple notarisation has worked. Germany is a Hague Convention country, but its apostille has not worked for incorporation on our filings.
Officers leave, so plan the replacement on the day you appoint the nominee.
Company law accepts the resident director as nominee. FEMA reads it differently.
Regulation 4(1) asks for an FC-GPR when an Indian company issues equity instruments to a person resident outside India. A share issued to a resident is not such an issue, so the nominee's share sits outside the FC-GPR. The company still counts as owned by persons resident outside India. Rule 23 of the Non Debt Instruments Rules measures ownership by beneficial holding of more than 50 percent of the equity instruments.
The friction comes at exit. Moving the share from the resident nominee to a non resident is a sale under rule 9(3). Rule 21(2)(b) sets a floor, so the price cannot be less than the value the pricing rules give. For an unlisted company, para 8.2 of the RBI Master Direction asks for a valuation on an internationally accepted pricing method. A chartered accountant, a SEBI registered merchant banker or a practising cost accountant can certify it. Para 8.11 adds that the certificate must not be more than 90 days old.
The resident side then reports the transfer in Form FC-TRS within 60 days. The gift route does not help. Rule 9(4) allows a gift from a resident to a non resident only with prior RBI approval. Donor and donee must also be relatives under section 2(77). A parent company cannot be anyone's relative.
Our guide to FC-TRS on a share transfer from a resident to a non resident walks through that filing. The FEMA pricing guidelines guide covers the valuation.
If the parent or its owners sit in a country that shares a land border with India, Press Note 3 approval comes first. On our filings it adds about 6 months, and the Ministry of Home Affairs (MHA) clears directorship and shareholding separately. Our Press Note 3 guide covers the route.
Each event in the life of the nominee share maps to one FEMA report under regulation 4 of FEMA 395, or to none.
| Event | FEMA report | Time limit | Who files |
|---|---|---|---|
| Shares issued to the parent and a non resident nominee | FC-GPR | 30 days from the issue | The Indian company |
| Nominee share moves between a resident and a non resident holding on a repatriation basis | FC-TRS | 60 days from the transfer or the receipt or remittance of funds, whichever is earlier | The resident transferor or transferee |
| Nominee share moves between two non residents holding on a repatriation basis | None under regulation 4(3) | Not applicable | Not applicable |
| Annual return on foreign liabilities and assets | FLA | By 15 July each year | The Indian company that received FDI |
| The subsidiary invests in another Indian company | Form DI | 30 days from the allotment | The investing Indian company |
Source: RBI, FEMA 395/2019-RB, regulations 4 and 5 (amended up to 13 Jun 2026), read 26 Oct 2026.
Regulation 5 adds a late submission fee for delays, set by the RBI in consultation with the Central Government. Our page on the late submission fee for FEMA reporting covers how it is computed.
The nominee casts the vote on its share because it is the member on the register. The parent holds the right to cause that vote to be cast, which section 89(10) treats as part of its beneficial interest. The nominee agreement turns that right into an obligation.
We draft the agreement so the nominee votes only as the parent directs in writing. For routine meetings, a standing direction to vote with the parent works. For a special resolution, we ask for a direction for that meeting, recorded in the minutes.
Section 89(10) treats the right to receive or take part in a dividend as part of the beneficial interest. That right sits with the parent. The nominee holds only the legal title to the share.
On our files, the nominee signs a standing instruction at the start. The company then pays the dividend on the nominee's share into the parent's account along with the rest. Withholding tax on the dividend follows the Income Tax Act, 2025. Our guide to a dividend from an Indian subsidiary to a foreign parent covers rates and treaty relief.
A company with two members has very little room on attendance. Check the quorum that the articles and the Act require before the notice goes out. With only two members on the register, a quorum of two means both must attend.
The parent attends through a person its board authorises to act for it. We have the parent's board pass that resolution at incorporation, naming the person by role, so a staff change does not need a new resolution.
The nominee agreement should oblige the nominee to attend and to sign any consent the meeting needs. Without that clause, a nominee who goes quiet can stall the annual general meeting.
A nominee can resign, fall out with the group or die. The share must move to a new nominee before membership has been below two for six months. These are the steps on our files.
When the parent adds capital later, the new shares usually go to the parent alone. The nominee's percentage falls, but the member count stays at two. Our guide to Form PAS-3 for allotments to foreign investors covers that filing.
An OPC solves the two member problem for an individual, not for a company. Section 2(62) defines an OPC as a company with only one person as a member. Section 3(1) requires its memorandum to name another person who becomes the member on the subscriber's death or incapacity to contract. That other person must give prior written consent.
The Union Budget speech of 1 Feb 2021 (para 81) proposed four changes for OPCs. Two removed the limits on paid up capital and turnover and allowed conversion at any time. The other two cut the residency limit for an Indian citizen from 182 days to 120 days and let non resident Indians (NRIs) incorporate OPCs.
The two eligibility changes speak to Indian citizens, at home or abroad. On our reading, none of them helps a foreign parent company set up a subsidiary. A foreign parent needs a Private Limited Company with a second member.
| Point | One Person Company | Private Limited Company with a nominee |
|---|---|---|
| Members | One (sections 2(62) and 3(1)(c)) | Two or more (section 3(1)(b)) |
| Built for | An individual founder; the 2021 changes covered Indian citizens, including NRIs | Any investor allowed under FEMA, including a foreign company |
| Meaning of "nominee" | The person named in the memorandum who becomes member on death or incapacity; holds no shares | A member who holds one share for the parent |
| Section 89 declarations | Not triggered, as the OPC nominee holds no shares | MGT-4, MGT-5 and MGT-6 |
| Fit for a foreign parent company | No, on our reading | Yes |
Sources: Companies Act, 2013, sections 2(62) and 3(1); Union Budget 2021-22 speech, para 81, read 26 Oct 2026.
On our filings, an OPC nominee needs a digital signature certificate (DSC). Our OPC registration service covers that route for NRI founders.
The risks come from people and paperwork, not from the law.
We answer each risk with a document, kept on one file per nominee share.
| Document | What it records | Who signs |
|---|---|---|
| Nominee agreement | Holds for the parent; votes as directed; passes on dividends; attends meetings; transfers on request | The parent and the nominee |
| Form MGT-4 | The nominee holds no beneficial interest | The nominee |
| Form MGT-5 | The parent holds the beneficial interest | The parent |
| Form MGT-6 and its filing receipt | The company's return to the ROC under section 89(6) | A director or other authorised officer |
| Board minutes of the Indian company | Allotment, the declarations received and approval to file MGT-6 | The board |
| Parent board resolution | Approval of the structure, the nominee's name and the authorised representative | The parent's board |
| Standing dividend instruction | Payment of the nominee share's dividend to the parent | The nominee |
Source: Companies Act, 2013, sections 89(1), 89(2) and 89(6); Krystal7 file practice, read 26 Oct 2026.
Assumptions: a US parent sets up an Indian wholly owned subsidiary in Haryana. Authorised capital is ₹15 lakh. The company issues 1,00,000 equity shares of ₹10 each on incorporation, so paid up capital is ₹10,00,000. The nominee is the parent's CFO, who lives in the US. The fair value used later is an assumption for illustration.
| Holder | Residential status | Shares | Amount paid | Legal holding | Beneficial holding |
|---|---|---|---|---|---|
| US parent | Non resident | 99,999 | ₹9,99,990 | 99.999% | 100% |
| CFO as nominee | Non resident | 1 | ₹10 | 0.001% | 0% |
| Total | 1,00,000 | ₹10,00,000 | 100% | 100% |
Source: Krystal7 worked example; Companies Act, 2013, sections 2(55) and 89(10), read 26 Oct 2026.
On a Haryana filing with ₹15 lakh authorised capital, paid on 14 Aug 2026, our SPICe+ challan showed ₹143 for PAN and TAN. The MCA registration fee is nil up to ₹15 lakh. Stamp duty was ₹195 (₹60 on the MoA, ₹120 on the AoA and ₹15 on linked forms).
The CFO signs Form MGT-4 and the parent signs Form MGT-5 on the allotment date. The company files Form MGT-6 within 30 days of receiving them. With nominal capital of ₹15 lakh, the normal fee is ₹400. If the company filed 20 days late, the additional fee would be 2 times ₹400, which is ₹800.
Within the same 30 days, the company reports all 1,00,000 shares in Form FC-GPR, because both allottees are non residents. Section 10A also bars the company from starting business or borrowing until it meets that section's conditions. Our INC-20A guide covers that declaration.
The company declares a dividend of ₹3 per share, ₹3,00,000 in all. The parent's own shares earn ₹2,99,997. The nominee share earns ₹3, which goes to the parent under the standing instruction. The parent is beneficially entitled to the full ₹3,00,000.
Now assume the nominee had been the Indian resident director. The FC-GPR would cover 99,999 shares worth ₹9,99,990, and the director's ₹10 share would sit outside it. The company is still owned by persons resident outside India, because the parent holds the whole beneficial interest.
In year four the parent moves that share to a US officer. Assume a chartered accountant values the share at ₹62. The price must be at least ₹62, on a certificate not more than 90 days old. The resident director then files FC-TRS within 60 days. The rupee amount is small. The valuation, the bank paperwork and the FEMA report are the same as for a large deal.
Our foreign subsidiary service handles the nominee structure, the declarations and the FEMA reports with the incorporation. We quote a fixed fee in writing within 48 hours of a scoping call.
Yes, beneficially, where FEMA allows 100 percent foreign investment in the sector. A Private Limited Company needs two members under section 3(1)(b), so one share sits with a nominee. The parent holds the beneficial interest in that share and in all the others.
Yes. Section 89 of the Companies Act, 2013 regulates it through declarations. The nominee files Form MGT-4, the beneficial owner files Form MGT-5 and the company files Form MGT-6 with the ROC.
Thirty days from the date the company receives the declaration. Section 89(6) sets this limit. Late filing adds an additional fee of 2 to 12 times the normal fee, depending on the delay.
The registered holder signs MGT-4 and the beneficial owner signs MGT-5. In a wholly owned subsidiary, that is the nominee and the parent, and both forms go to the Indian company.
Not normally. Section 90 looks at individuals with beneficial interests above the threshold, and the nominee holds no beneficial interest in its share. The SBOs are the individuals behind the parent, reported in Form BEN-2.
Yes, company law allows it. Under FEMA, the director's share sits outside the FC-GPR. Moving it later to a non resident is a priced sale with an FC-TRS. We prefer a non resident nominee for that reason.
Yes, if the nominee is a person resident outside India. Regulation 4(1) of FEMA 395 covers any issue of equity instruments to a non resident. The report is due within 30 days of the issue.
Only if the share moves between a resident and a non resident holding on a repatriation basis, or between repatriable and non repatriable non resident holdings. A move between two non residents on a repatriation basis is not an FC-TRS case. Where it applies, the resident files within 60 days.
The parent, as beneficial owner. Section 89(10) treats the dividend right as part of the beneficial interest. On our files, the nominee signs a standing instruction so the company pays that dividend to the parent's account.
Not a foreign parent company. An OPC has one member, and its nominee steps in only on the member's death or incapacity. The 2021 Budget changes opened OPCs to NRIs, who are Indian citizens.
The share goes through transmission before it can move to a new nominee. The heirs are not bound by the nominee agreement, which slows the handover. A group company as nominee avoids this.
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Guides explain the rules. A conversation solves your specific case. Talk to a Krystal7 Consultants advisor about your India entry, FEMA or compliance position.
WRITTEN BY
Nandini Hasija is a co-founder of Krystal7. She leads brand, business development and marketing, and works with founders to define their engagement. She is a Chartered Accountant and achieved All India Rank 49 in the CA examinations.
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IncorporationEvery government charge in an Indian incorporation, proved with two real SPICe+ challans: nil MCA fee up to ₹15 lakh, ₹1,000 for the name, ₹143 for PAN and TAN, and stamp duty by state.
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Cross-BorderHow a foreign partner sets up a joint venture company in India in 2026. It covers structures, FDI caps, Press Note 3, FEMA pricing, shareholders agreement limits, CCI thresholds, filings, exits and tax, with a 51:49 example.
Read the guide ↗ServiceRegister your Public Limited Company in India with Krystal7 Consultants. Professional PLC registration services with expert guidance and compliance support.
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IncorporationHow the Registrar tests a proposed company name under section 4 and rules 8, 8A and 8B, how SPICe+ Part A and RUN work, how long a name stays reserved, and the rejection reasons we see most on our filings.
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IncorporationHow a foreign director gets a Class 3 DSC for Indian company filings: the CCA rules, the documents, the video check, personal or organisation certificates, renewal, and when a founder needs no DSC at incorporation.
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Cross-BorderWhat a foreign founder or director may do in India on a business visa or e Business visa, how long each stay lasts, the June 2026 FRRO rule change, payments, employment visa triggers, tax residency and PE.
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Cross-BorderHow a foreign company opens and runs a liaison office in India in 2026: the three year profit and USD 50,000 net worth test, AD bank or RBI approval, permitted work, AAC by 30 September, Form 162, PE risk and closure.
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Cross-BorderWho needs an employment visa in India, the INR 16.25 lakh salary floor, documents the Indian company signs, validity, FRRO registration under the 2025 Rules, director cases, tax, PF and the compounding fees for getting it wrong.
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IncorporationHow a foreign national becomes a director of an Indian company in 2026: the 182 day resident director rule, DIN through SPICe+ or DIR-3, apostille by country, DSC by video, DIR-12 in 30 days and the new three year KYC.
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IncorporationThe structure, steps, licences, costs and transfer pricing model for a foreign parent setting up an Indian software subsidiary or dev center.
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IncorporationHow a foreign parent sets up an Indian manufacturing entity: FDI route, the licence map by authority, honest timelines and the tax position in 2026.
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IncorporationThe FDI position, registration steps, environmental and safety licence map, and costs for foreign investors entering India's chemical sector.
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Cross-BorderThe five types of India advisers compared honestly for foreign founders: who each suits, the questions that expose a bad fit, real fee ranges, and where Krystal7 Consultants fits.
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Country GuidesThe questions global founders actually ask before an India entry: what FEMA compliance means, who is responsible, how registration works from abroad, what it honestly costs, and the calendar that follows.
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IncorporationYes, a foreign-owned Private Limited company can register on Udyam. The revised thresholds, the portal steps, and what changes when the entity has FDI.
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IncorporationThe SPICe+ form on the MCA portal, part by part: name reservation, the Part B fields that cause resubmissions, linked forms, 2026 fees and stamp duty, documents and a realistic timeline.
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IncorporationThe right company registration provider for a foreign founder should assess the investor and proposed activity before quoting the filing. Compare the full scope through banking and investment reporting, the people responsible and the recurring compliance work. A certificate alone does not show that the business is ready to operate.
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IncorporationForeign founders can register a company in India, subject to the proposed activity, investment route and ownership checks. Decide whether you will invest personally or through an existing overseas company before preparing documents. A parent company should use the foreign subsidiary registration service to plan its corporate ownership and reporting.
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IncorporationThe truth about top rated online company registration services in India for 2026: how rankings are made, real costs, 8 to 10 working day timelines, and how to actually choose.
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Cross-BorderChoosing your India entry route in 2026: subsidiary, branch, LO or LLP compared on control, tax, FEMA and speed, with a decision framework for founders.
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Cross-BorderHow India's Production Linked Incentive schemes work in 2026, which sectors they cover, what Uttar Pradesh and Tamil Nadu add, how incentives are taxed under the Income Tax Act, 2025, and a checklist for a foreign manufacturer.
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IncorporationWho qualifies for DPIIT startup recognition under the February 2026 notification, why a foreign subsidiary does not, how to apply on NSWS, the benefits, the section 140 tax holiday and the usual rejection reasons.
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Cross-BorderHow CBIC's AEO programme works in India: the four tiers, eligibility, benefits, monthly deferred duty from 1 Mar 2026, mutual recognition, the application and whether a foreign owned subsidiary should apply.
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Cross-BorderHow customs duty in India is built from BCD, SWS, AIDC and IGST, how customs values imports from a foreign parent, how the bill of entry works on ICEGATE, and what drawback and advance authorisation save.
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IncorporationHow an Indian company issues shares to foreign investors by private placement under section 42 and rule 14, with PAS-4, the 200 person limit, deadlines, FEMA pricing and FC-GPR.
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Cross-BorderWhich countries have a social security agreement with India, how a certificate of coverage exempts posted workers, how EPFO issues one for Indian staff going abroad, totalisation, PF withdrawal and the 2026 scheme.
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Cross-BorderBengaluru, Hyderabad, Pune or Gurugram for a foreign tech subsidiary: talent, office costs, state IT and GCC policies, professional tax, shops and establishments law, lease stamp duty and a decision table.
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Cross-BorderHow the Budget 2026 data centre tax holiday works under Schedule IV serial 13C, what changed in August 2026, the 15 percent safe harbour, infrastructure status, state policies, power, DPDP localisation and the FDI route.
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Cross-BorderWhat an Indian importer must declare, hold and produce under section 28DA and CAROTAR 2020, how customs verifies a claim, and how it works for imports under the UAE, Australia, UK and EFTA deals.
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Cross-BorderTEPA has applied between India and Switzerland, Norway, Iceland and Liechtenstein since 1 Oct 2025. Tariff cuts, origin proof, the investment goal and how it sits with the DTAAs.
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Cross-BorderHow a foreign group sets up in GIFT IFSC: the IFSCA framework, funds, banking units, leasing, fintech and in house centres, the section 147 tax holiday, currency, FEMA status, approvals, and a Singapore and Dubai comparison.
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Cross-BorderThe 6 Feb 2026 India US framework, the 2025 tariff escalation to 50 percent, what changed after the Supreme Court ruling, and the transfer pricing and customs effects for an Indian subsidiary.
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Cross-BorderWho must register with the FRRO, the 14 day deadline under the Immigration and Foreigners Rules, 2025, e FRRO steps, documents, the certificate of registration, address changes, departure, penalties and the employer's duties.
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Cross-BorderHow a startup moves its holding company from the US or Singapore to India, comparing the inbound merger, share swap and share purchase routes, with FEMA approvals, pricing, shareholder tax, timelines and lessons.
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Cross-BorderThe India EU FTA was concluded on 27 Jan 2026 but is not yet signed or in force. Tariff cuts by sector, the origin rules, services and what it does not change for an EU parent.
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IncorporationHow Indian private companies issue sweat equity shares under section 54 and rule 8, with limits, valuation, lock in, FEMA rules for non residents, tax as a perquisite and ESOP comparison.
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Cross-BorderHow a foreign company sets up an SEZ unit in India: Form F, the Letter of Approval, the bond, net foreign exchange, tax after the section 10AA sunset, GST zero rating, IT units, exit and the 2025 and 2026 reforms.
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Cross-BorderHow a foreign owned Indian company gets an Importer Exporter Code from DGFT, when service exporters need one, the April to June update, deactivation, and the links to customs, GST and FEMA export reporting.
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Cross-BorderHow a foreign parent seconds staff to an Indian subsidiary: the agreement, the real employer test, GST after Northern Operating Systems, PE and TDS after Centrica, payroll and provident fund, with a checklist.
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IncorporationEvery Indian company needs one director who stays in India for 182 days in the financial year. How foreign groups fill the seat, the forms, the liability, the first year rule and the section 172 penalty.
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Cross-BorderHow a foreign group sets up a global capability centre in India, from entity choice and cost plus pricing to the 15.5 percent safe harbour, SEZ or STPI, GST on exports, PE risk, payroll and the yearly filings.
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FEMA & RBIIndia has no direct conversion of a branch or liaison office into a subsidiary. Here are the steps in order, from incorporation and asset transfer at book value to GST, staff, AD bank closure, Form FC-2, PAN and TAN.
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FEMA & RBIHow an Indian subsidiary runs a section 62(1)(a) rights issue for its foreign parent in 2026: offer periods, FEMA pricing on renounced shares, demat, PAS-3 and FC-GPR within 30 days, with a worked example.
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FEMA & RBIA step by step guide for foreign investors allotting shares in an Indian company: FEMA and Companies Act requirements, Automatic versus Approval Route, FMV pricing under FEMA valuation norms, FC-GPR filing on the FIRMS portal, and the post allotment compliance calendar covering PAS-3, annual return, and FLA.
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FEMA & RBIHow an Indian subsidiary turns a foreign parent loan, ECB interest, import payables or pre incorporation costs into shares, with the Companies Act route, FEMA conditions, pricing, filings, tax and a worked example.
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FEMA & RBIHow the Overseas Investment Rules and Regulations 2022 work for an Indian company that sets up or buys a foreign entity in 2026: ODI vs OPI, the 400 percent limit, Form FC and UIN, the two layer rule, APR and late fees.
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FEMA & RBIHow a foreign company opens and runs a branch or project office in India in 2026: the eight permitted activities, the profit and net worth test, AD bank approval, the 35 percent tax rate, AAC, FC-3, profit remittance and closure.
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FEMA & RBISOFTEX stopped applying to software exports invoiced from 1 October 2026, when FEMA 23(R)/2026-RB came into force. What to do with September invoices, how the monthly EDF replaces the form, and the nine month realisation rule.
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FEMA & RBISince 1 October 2026 every exporter of services and software files a monthly Export Declaration Form (EDF) under FEMA. Who files it, where, the due dates, the nine month realisation rule and what a missed EDF costs.
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FEMA & RBIThe legal line between FDI and FPI in India: the NDI Rules 10 percent test, SEBI registration, reclassification within five trading days, tax under the Income Tax Act, 2025, reporting and the right route for a foreign parent.
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FEMA & RBIHow FEMA prices shares issued or transferred to non residents in 2026: rule 21 floor and ceiling, who values, DCF, the 90 day report, CCPS and CCD conversion, swaps, angel tax after its repeal, and rule 57 under the Income Tax Act, 2025.
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FEMA & RBIHow an Indian company files PAS-3 when a foreign investor takes shares: the 30 and 15 day clocks, attachments by route, fees, the order with FC-GPR, penalties and fixing a missed return.
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FEMA & RBIWhat RBI purpose codes are, what P0802 and P0807 mean after SOFTEX ended on 1 Oct 2026, the codes for service exports, FDI and payments to a foreign parent, and how to fix a wrong code with your bank.
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FEMA & RBIHow shares of an Indian Private Limited company move between a resident and a non resident in 2026: FEMA pricing, SH-4 and demat, stamp duty, FC-TRS within 60 days, deferred payment, capital gains, TDS and treaties.
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FEMA & RBIWhat a FIRC and an eBRC are, how to get each from your bank and the DGFT portal, the GST refund link, the 2026 FEMA export rules with EDF and nine month realisation, and fixes for missing certificates.
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FEMA & RBIHow an EEFC account works for a foreign owned Indian company or exporter in 2026: the 100 percent credit rule, permitted debits, the monthly conversion rule, interest, GST refunds, worked examples and a checklist.
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FEMA & RBIHow a foreign parent lends to its Indian subsidiary under the 2026 ECB rules: who can lend, the USD 1 billion limit, end uses, Form ECB 1 and ECB 2, late fees, withholding tax and transfer pricing.
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FEMA & RBIWho files the Annual Performance Report for overseas direct investment, the 31 December due date, when unaudited accounts are allowed, how AD banks file it in 2026, and the flat INR 7,500 late fee.
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FEMA & RBIA practical guide for foreign founders on identifying FDI automatic route sectors in India, understanding when government approval applies, and what to confirm before incorporating or accepting investment.
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FEMA & RBIForm FC-GPR, also written FCGPR: what it reports, the 30 day clock from allotment, the FIRMS portal steps through your AD bank, the certificates the form needs, and what a late filing costs.
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FEMA & RBIA practical guide for foreign founders on FDI reporting requirements in India, covering when RBI reporting applies, which filings to prepare, common mistakes, and when to bring in a compliance advisor.
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FEMA & RBIEvery legal route from an Indian subsidiary to its foreign parent with 2026 rates: dividends under treaty, royalties, buyback after April 2026, and the filings banks actually check.
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FEMA & RBIA practitioner walkthrough of FEMA compounding under the 2024 Rules: PRAVAAH filing, the INR 10,000 fee, penalty caps and the 180 day order timeline.
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FEMA & RBIThe full FDI compliance map for foreign owned companies in India: FC-GPR, FCTRS, FLA, sectoral caps and the penalties for getting reporting wrong.
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FEMA & RBIFC-GPR and FC-TRS are the two FEMA forms every foreign investor in an Indian company eventually meets. This guide sets out the difference between them in one table, explains when each applies, the 30 and 60 day filing clocks, and how to file correctly on the FIRMS portal.
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FEMA & RBIFC-GPR filing for foreign investment in India: the 30 day timeline, FIRMS portal steps, documents, LSF for delays and how to file without rejections.
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FEMA & RBILate or defective FC-GPR? Understand LSF regularisation versus compounding under the 2024 FEMA Rules, the PRAVAAH process, fees and timelines.
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FEMA & RBIHow Indian exporters net export receivables against import payables with the same overseas buyer, supplier or their group companies under FEMA, with the AD bank's role, EDPMS and IDPMS closure, write off limits and documents.
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FEMA & RBIHow FEMA treats OCI cardholders who invest in or direct Indian companies, with repatriation and non repatriation routes, FEMA and tax residence, DIN and KYC, Press Note 3, property and bank accounts.
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FEMA & RBIHow RBI computes the late submission fee for delayed FC-GPR, FC-TRS, LLP, ODI, FLA and ECB filings, the three year window, the cap, how to pay, the 2026 ECB changes and when compounding takes over.
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FEMA & RBIHow foreign partners invest in an Indian LLP under Schedule VI of the NDI Rules, with the sector test, designated partners, pricing, Form LLP(I) and LLP(II), conversion, tax and when an LLP fits.
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FEMA & RBIHow a foreign company merges into an Indian company under section 234 and rule 25A, the 2024 fast track for a foreign parent and its subsidiary, FEMA deemed approval, two year windows, tax and stamp duty.
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FEMA & RBIHow an Indian company pays a foreign supplier or its parent in advance for goods or services under the FEMA import rules in force from 1 Oct 2026, with guarantees, IDPMS, time limits and repatriation.
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FEMA & RBICase note on published RBI compounding orders for late FC-GPR, ARF and FC-TRS reporting and late share issues, with the amounts RBI charged, the compounding matrix, the late submission fee route and what to do now.
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FEMA & RBIHow rule 9(6) of the NDI Rules lets buyers and sellers defer, escrow or indemnify up to 25 percent of the price for 18 months, and how pricing, FC-TRS, escrow accounts, TDS and capital gains timing work.
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FEMA & RBIHow foreign investors fund Indian companies with CCDs, CCPS, warrants and convertible notes, with the NDI Rules, conversion pricing, coupons, tax, FC-GPR, Form CN and company law steps.
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FEMA & RBIThe time limit to realise and repatriate export value under FEMA for goods and services, the 2025 and 2026 changes, EDPMS, extension, set off, reduction and write off, and the GST refund consequences.
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FEMA & RBIHow rule 23 of the NDI Rules treats investment by a foreign owned or controlled Indian company, with the ownership and control tests, caps, pricing, the funds rule, Form DI and the annual auditor certificate.
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FEMA & RBIWhen an Indian company or foreign owned subsidiary must hold a Legal Entity Identifier under RBI rules for cross border payments, bank loans, forex deals and RTGS, and how to get and renew one.
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FEMA & RBIWhat Press Note 3 (2020) requires, the seven countries it covers, the 2026 beneficial owner test, the 10 percent automatic route, DPIIT reporting, approval timelines and the filing steps.
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Transfer PricingHow India taxes a management fee paid to a UAE parent: no FTS article in the treaty, PE risk, TDS and Forms 145 and 146, reverse charge GST, the benefit test, disallowance risks and UAE corporate tax, with a worked example.
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Transfer PricingA practical guide for foreign founders on India's safe harbour rules for transfer pricing, covering when they apply to related party transactions, how they fit into compliance, and what to check before relying on them.
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Transfer PricingWho files Part A and Part B of Form 56, when an Indian subsidiary files Form 58 or the CbC report itself, the 2026 and 2027 due dates, penalties under sections 442 and 459, and two worked examples.
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Transfer PricingA practical guide for foreign founders on when Form 3CEB applies to an Indian entity, what to prepare for the chartered accountant, and how to avoid missed portal actions around transfer pricing reporting.
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Transfer PricingThe six prescribed methods under section 165 of the Income-tax Act, 2025 (formerly section 92C) with a worked example of each, the 1 to 3 percent tolerance range, safe harbour, and Form 3CEB documentation.
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Transfer PricingA practical guide for foreign founders on transfer pricing documentation requirements in India, covering local file, master file, intercompany agreements, benchmarking, and when to bring in an advisor for an Indian subsidiary.
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Transfer PricingCase note on the Delhi High Court rulings that decide management fee disputes for Indian subsidiaries: benefit, duplication, shareholder costs, allocation keys, aggregation, the 2026 safe harbour and the documents that win.
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TaxHow an Indian subsidiary buys back shares from its foreign parent under section 68, prices the buyback under FEMA, files FC-TRS, and withholds tax now that buybacks are capital gains again.
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Income Tax & TDSHow an Indian company claims credit for tax withheld abroad in 2026: rule 128 and Form 67 for AY 2026-27, rule 76 and Forms 44 and 45 from tax year 2026-27, due dates, documents, disputes and worked examples.
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Income Tax & TDSHow India's General Anti Avoidance Rule works for foreign groups in 2026: Chapter XI of the Income Tax Act, 2025, the INR 3 crore test, grandfathering, the Approving Panel, PPT and LOB, and the substance file.
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Income Tax & TDSHow the India Netherlands DTAA taxes a Dutch company in 2026: 10 percent rates, the MFN clause after Nestle SA, share sales under Article 13(5), PE without a service clause, the MLI and Form 41.
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Income Tax & TDSHow the India Mauritius DTAA taxes a Mauritius company in 2026: treaty rates, source taxation of share gains after the 2016 protocol, grandfathering, Article 27A, the 2024 PPT protocol, Tiger Global, TRC and substance.
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TaxHow the India Singapore DTAA taxes a Singapore company in 2026: treaty rates, the make available test, capital gains after 2017, Article 24A, the MLI principal purpose test, PE triggers, Form 41 and substance.
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Income Tax & TDSWhen a foreign company becomes tax resident in India under POEM in 2026: section 6(10), CBDT Circular 6 of 2017, the active business test, the INR 50 crore threshold, founder risk and the tax cost.
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Income Tax & TDSHow India taxes RSUs and ESOPs that a foreign parent grants to staff of its Indian subsidiary in 2026: perquisite value under rule 15, TDS, cross charges, FEMA, capital gains, Schedule FA and Form 44.
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Income Tax & TDSHow the India Germany DTAA taxes a German company in 2026: the flat 10 percent rates, managerial fees, the missing service PE rule, capital gains, the MLI position, the Nestle MFN ruling and Form 41.
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Income Tax & TDSHow a foreign company gets a lower or nil TDS certificate in Form 128 under section 395 and rule 213: who can apply, documents, how the officer sets the rate, validity, the payer's Form 144 entry, and a UK SaaS example.
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Income Tax & TDSWhich return a foreign owned company in India files, the extended AY 2026-27 due dates, the ITR-6 schedules foreign owners trigger, the 22 percent regime and MAT credit choice, late filing costs and the move to the 2025 Act.
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Income Tax & TDSHow a foreign company or foreign national gets an Indian PAN in 2026: Form 96 and Form 95 replace Form 49AA, the apostilled registration certificate, fees, the Indian representative, rule 217 relief from higher TDS, and two worked examples.
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Income Tax & TDSHow an Indian subsidiary or a foreign company gets a TAN under section 397 of the Income Tax Act, 2025: Forms 134 and 135, rule 216 timing, documents, the INR 10,000 penalty, and the TDS work that follows.
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Income Tax & TDSHow the India UAE DTAA taxes a UAE company in 2026: who counts as a UAE resident, treaty rates, technical fees without an FTS article, free zone companies, capital gains, the MLI principal purpose test, PE, UAE corporate tax and documents.
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Income Tax & TDSHow the India UK DTAA taxes a UK company in 2026: Articles 11 to 14 rates, the make available test, service PE day counts, capital gains under Indian law, the MLI principal purpose test and Form 41.
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Income Tax & TDSHow the India US tax treaty taxes a US company in 2026: dividend, interest and royalty caps, fees for included services and the make available test, service PE, Article 24 LOB, capital gains, Form 41 and Form 6166.
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Income Tax & TDSWhat a non resident needs to claim treaty rates in India in 2026: the foreign TRC, Form 41 (old Form 10F) filed online, PAN or rule 217 details, validity rules, and Forms 42 and 43 for an Indian company's own TRC.
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Income Tax & TDSSection 63 of the Income Tax Act, 2025 keeps the INR 1 crore and INR 10 crore tax audit limits. See who needs an audit, the FY 2025-26 forms and dates, Form 26 from tax year 2026-27 and the new flat fee.
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Income Tax & TDSA section and form map from the 1961 Act to the Income Tax Act, 2025 for foreign owned subsidiaries, with the FY 2025-26 transition rule, tax year 2026-27 due dates and the 2026 MAT change.
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Income Tax & TDSA practical guide for foreign founders on how permanent establishment risk arises in India through employees, contracts, offices, and vendors, and how to structure India activity to reduce that exposure before scaling up.
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Income Tax & TDSForms 15CA and 15CB became Forms 145 and 146 on 1 Apr 2026. The four parts of Form 145, the rule 220 exemptions, treaty claims, portal steps, penalties and a worked royalty example.
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Income Tax & TDSThe corporate tax rate in India for foreign companies is 35 percent plus surcharge and cess. Full rate table with effective rates, DTAA withholding relief and the subsidiary comparison.
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Income Tax & TDSHow an Indian company deducts tax on royalty, fees, interest and dividends paid abroad in 2026, with section 393 and 207 rates, treaty rates for eight countries, rule 217, Forms 41, 128, 144 and 131, and a US example.
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TaxFor a foreign owned subsidiary, GST is not just registration, it is export refunds, reverse charge and a monthly filing rhythm. Here is a ranked, honest 2026 guide and who each firm suits.
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TaxCross border tax for founders in India: permanent establishment risk, withholding tax, treaty relief and transfer pricing, explained for 2026.
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TaxWhen minimum alternate tax applies to foreign companies and Indian subsidiaries: section 115JB and section 206, the 14 percent final MAT, book profit, the foreign company exclusions, MAT credit and the section 200 choice.
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TaxHow the single tax year in section 3 of the Income Tax Act, 2025 replaces previous year and assessment year from 1 Apr 2026, how returns, advance tax, TDS and assessments are labelled, and how FY 2025-26 income is handled.
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TaxWhy angel tax under section 56(2)(viib) ended from AY 2025-26, which old share issues to foreign investors are still exposed, and the FEMA, Companies Act and income tax rules that still apply.
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TaxAdvance tax for companies in India: the four due dates, the INR 10,000 threshold, section 405 computation, interest under sections 424 and 425 (old 234B and 234C), online payment and a cost plus example.
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TaxThe history of India's equalisation levy, the end of the 2 percent e commerce levy on 1 Aug 2024 and the 6 percent advertising levy on 1 Apr 2025, and the income tax, withholding and GST rules that now apply.
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TaxHow the India Canada DTAA taxes a Canadian parent and its Indian subsidiary: dividend, interest and royalty caps, fees for included services, the related enterprise service PE, capital gains, the MLI and the papers.
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TaxHow the India Australia DTAA taxes an Australian parent and its Indian subsidiary: 15 percent dividends and interest, the royalty bands, management fees, the 183 day service PE, section 11J and ECTA.
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TaxWhen a foreign company is taxable in India: business connection under section 9 of the Income Tax Act, 2025, the INR 2 crore and 3 lakh user SEP tests, agents, treaty PE override, digital businesses and a decision table.
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TaxThe rates, holding period, withholding, treaty exemptions for Mauritius, Singapore and Netherlands sellers, buyer side fair value rules and FEMA reporting when a non resident sells unlisted Indian shares.
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TaxWhat Union Budget 2026 and the Finance Act, 2026 changed for foreign owned Indian companies and non residents: MAT, buy back tax, withholding, transfer pricing, new exemptions, customs, GST and FEMA.
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TaxHow India's thin capitalisation rule works for Indian subsidiaries: section 94B and section 177, the INR 1 crore trigger, the 30 percent of EBITDA cap, guarantees, exclusions, parent ECBs and the carry forward.
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TaxCase note on AAR v Tiger Global International II Holdings (2026 INSC 60): the facts, the order, grandfathering under Article 13(3A), TRCs, GAAR and what Mauritius and Singapore holding structures should do now.
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TaxHow India decides the tax residency of a foreign employee: the 182 day and 60 plus 365 day tests, not ordinarily resident status, salary for work in India, the 90 day and treaty short stay exemptions, and the papers.
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TaxHow the India France DTAA taxes a French parent and its Indian subsidiary: the 10 percent rates, the MFN clause after Nestle SA, technical fees, PE, the 10 percent share rule, the MLI and Form 41.
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TaxCase note on AO v Nestle SA (2023 INSC 928): why MFN clauses in India's treaties need a notification, what Switzerland, the Netherlands and France did next, and the dividend rates that apply today.
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TaxHow the India Japan DTAA taxes a Japanese parent and its Indian subsidiary: the 10 percent rates, the wide technical fee definition, JBIC and NEXI interest, PE, capital gains, the MLI and Form 41.
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TaxHow Form 27Q works for TDS on payments to non residents, what goes into it, the 31 July to 31 May due dates, Form 131, corrections, late fee and penalty, and the switch to Form 144 under the Income Tax Act, 2025.
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