Register an IT Company in India: UK Founder Guide

Most guides to registering an IT company in India are written for an Indian founder sitting in Bangalore who already has a PAN card, an Aadhaar number and a local bank branch down the road. If you are a UK agency owner or software founder trying to open a development arm in India, none of that applies to you, and the generic pages skip exactly the parts that matter to you: how a foreign director signs the forms, how the intercompany contract with your UK company should be structured, and what FEMA (the Foreign Exchange Management Act, India's law governing cross border money movement) expects from you every year afterwards.

This is a practical route map for that specific journey, from choosing the right entity through to the compliance calendar you will live with once the company exists.

Why IT firms are the busiest UK to India corridor

The GCC and dev centre wave

Over the past few years, a large share of UK to India company formations have been technology businesses, not manufacturers or trading companies. Some are setting up what is loosely called a GCC, a Global Capability Centre, which is really just a captive development or support office owned by the foreign parent. Others are smaller agencies and SaaS founders who want a dedicated engineering team without the margin and management overhead of an outsourcing vendor.

The pull is straightforward: a deep, English speaking engineering talent pool, a cost base that is favourable relative to the UK, and, under current regulations, a reasonably well trodden legal path for a UK company to own an Indian subsidiary outright.

Build versus EOR versus outsource, honestly compared

Before you register anything, it is worth being honest about the alternatives.

An Employer of Record (EOR) lets you hire individual developers in India through a third party that handles local payroll and compliance, without you owning any entity. This is fast and low commitment, but you never own the intellectual property directly, you pay a per head service fee indefinitely, and scaling beyond a handful of people usually becomes more expensive than running your own entity.

Outsourcing to an Indian development agency avoids incorporation entirely, but you are renting a team you do not control, IP assignment terms are only as good as the contract, and quality and continuity depend on someone else's business decisions.

Setting up your own Indian entity is more work upfront, generally a matter of some weeks rather than days, but it gives you a team that reports to you, IP that sits where you want it under a proper agreement, and a cost base that, once the entity is running, is usually lower per engineer than either alternative once you are past a small headcount. For most UK founders planning a dev centre of more than four or five people for more than a year, owning the entity is the more defensible long term choice.

Choosing the entity for an Indian dev arm

Private Limited as the default

For a UK company opening a development arm, a wholly owned Indian subsidiary structured as a Private Limited company is generally the default choice, and for good reason. Under current rules, one hundred percent foreign ownership in an Indian IT and software services company is typically permitted under the automatic route of India's foreign direct investment policy, meaning no prior government approval is usually needed for a UK parent to hold the entire shareholding.

A Private Limited company gives you a separate legal person in India that can hire employees directly, hold its own bank accounts, sign leases, invoice your UK company for services, and own the IP it creates, subject to whatever assignment terms you put in the intercompany agreement. It also caps liability at the company level rather than exposing the UK parent.

Branch and project offices, when they fit

A branch office is a foreign company operating in India as an extension of itself, not a separate Indian legal entity. It is generally suited to businesses conducting specific permitted activities such as consultancy or research on behalf of the parent, and approval routes and permitted activities are narrower than for a subsidiary. For a UK software company that wants an ongoing engineering team building product, a branch office is usually the wrong tool: it is harder to justify under the permitted activity list, and it does not give you the clean separation of an Indian corporate entity for hiring and IP purposes.

Project offices exist for foreign companies executing a specific contract in India and are not relevant to a standing development centre.

Why LLPs rarely suit funded tech

An LLP (Limited Liability Partnership) is a valid Indian business structure, and foreign investment into an LLP is permitted under current rules, but it is a poor fit for a funded tech subsidiary. LLPs cannot issue equity shares in the way a Private Limited company can, which matters if you ever want to bring in an Indian cofounder, issue employee stock options to your Indian team, or raise India specific investment. Most UK parents choosing an LLP do so because they misunderstand the incremental compliance cost of a Private Limited company, which is genuinely not large enough to justify giving up the equity flexibility.

Registering the company step by step

SPICe plus Part A and B for foreign directors

Company incorporation in India runs through an integrated online form usually referred to as SPICe plus, filed with the Ministry of Corporate Affairs. Part A reserves your company name; Part B captures the incorporation details, director and shareholder information, registered office address, and initial capital structure, and bundles in related registrations such as PAN (Permanent Account Number) and TAN (Tax Deduction Account Number) for the new company.

For a UK parent, the practical friction is not the form itself but the supporting paperwork for a foreign director and a foreign corporate shareholder: notarised and apostilled identity documents, a board resolution from the UK company authorising the subsidiary and its initial director, and translated documents where relevant. None of this is unusual, but it needs to be lined up before filing, not scrambled together afterward, or it becomes the main source of delay.

DIN and DSC for UK residents

Every director of an Indian company needs a Director Identification Number (DIN) and a Digital Signature Certificate (DSC) to sign filings electronically. Both are obtainable by non resident individuals, including UK residents, but the process typically requires notarised or apostilled proof of identity and address from the UK, along with a photograph taken to Indian government specifications. Because these documents originate outside India, this step usually takes longer for a UK based director than for an Indian one, and it is worth starting it in parallel with name reservation rather than after.

Apostille of UK documents

The UK is a signatory to the Hague Apostille Convention, so UK documents used for Indian company registration, board resolutions, passport copies, proof of address, generally need an apostille from the relevant UK authority rather than direct embassy legalisation. Get this sequencing right early: apostille turnaround in the UK, combined with courier time to India, is often the single largest driver of how long the whole incorporation actually takes, more so than anything happening inside the Indian registrar's office.

Bank account and capital remittance

Once the company is incorporated, it needs an Indian bank account to receive its initial share capital from the UK parent. Banks will ask for the incorporation certificate, PAN, board resolutions and KYC (Know Your Customer) documents for the UK entity and its authorised signatories. The capital itself is remitted from the UK as foreign direct investment, and the receipt of that money is what triggers the first FEMA reporting obligation, covered below. Under current rules there is no prescribed minimum capital for a private company, so the amount you remit is a commercial decision based on what the subsidiary genuinely needs to fund its first few months.

The intercompany layer nobody warns you about

This is the section most incorporation focused guides skip entirely, and it is where a lot of UK founders end up with problems a year or two in.

The development services agreement

Once the Indian subsidiary exists, it needs a written agreement with the UK parent that defines the commercial relationship: is the Indian entity providing development services for a fee, or is it a full risk bearing entity building and owning its own product? For a captive dev centre, the near universal structure is a cost plus services agreement, where the Indian subsidiary is compensated for its costs plus an agreed margin, and IP created is assigned to the UK parent under the terms of that same agreement. Get this drafted properly and signed at or near incorporation, not retrofitted once the tax authorities ask for it.

Transfer pricing basics and Form 3CEB

Because the UK parent and the Indian subsidiary are related parties, any transaction between them, principally the service fee the UK company pays the Indian entity, falls under India's transfer pricing rules. These rules require that the pricing between related parties reflect what unrelated parties would have agreed, generally referred to as the arm's length principle. In practice, for a captive dev centre, this usually means benchmarking the margin charged on costs against comparable independent Indian IT services providers, and documenting that benchmarking.

Indian companies with international related party transactions above the applicable thresholds are generally required to obtain and file an accountant's report, historically filed as Form 3CEB, along with supporting transfer pricing documentation. Treat this as a recurring annual exercise from year one rather than something to address only if queried, since retrofitting transfer pricing documentation after several years of transactions is considerably harder than building it in from the start.

Paying the Indian entity from the UK

The UK company pays the Indian subsidiary for services rendered, which is an inward remittance into India and is generally reported as an export of services for Indian GST (Goods and Services Tax) purposes, typically allowing the Indian entity to invoice without charging GST provided the relevant conditions and documentation, such as a Letter of Undertaking, are in place.

If money ever needs to flow the other way, for example the Indian subsidiary paying a royalty or licence fee back to the UK parent, that outward remittance generally requires a chartered accountant's certificate and a filing with the tax authorities before the bank will release the payment. Under the Income Tax Act 2025, which replaced the earlier 1961 Act, this certification is filed as Form 146 supported by Form 145, the successors to what practitioners previously knew as Form 15CB and Form 15CA, and any applicable withholding is assessed under the provisions that replaced the old Section 195. Your CA will need to be looped in before any such outward payment, not after.

Compliance calendar after incorporation

FC GPR within 30 days

When the UK parent's capital lands in the Indian subsidiary's bank account, that inflow is foreign direct investment and needs to be reported to the Reserve Bank of India. This is done through a filing known as FC GPR (Foreign Currency Gross Provisional Return), and under current rules it is generally due within a set number of days of the shares being allotted against that capital, so this is not a filing to leave until the next compliance cycle. Missing it or filing late can attract penalties and complicates future fundraising or repatriation.

FLA return every July

Separately, any Indian company with foreign investment or overseas assets is generally required to file an annual Foreign Liabilities and Assets (FLA) return with the Reserve Bank of India, typically due in the middle of the year, covering the position as at the end of the previous financial year. This is an annual obligation for as long as the UK parent holds shares in the Indian subsidiary, regardless of how quiet the year has been.

ROC annual filings, GST, payroll

Beyond the FEMA specific filings, the Indian subsidiary carries the same ongoing obligations as any Indian Private Limited company. It needs to hold statutory board and shareholder meetings and file annual returns and financial statements with the Registrar of Companies (ROC), get its books audited annually, file corporate tax returns under the Income Tax Act 2025, and file periodic GST returns if it is registered for GST, which it generally will be once it starts invoicing the UK parent or hiring locally.

Once the subsidiary hires employees, it also takes on payroll compliance: deducting and depositing tax at source on salaries, and registering for and contributing to India's employee provident fund and, depending on headcount and location, employee state insurance schemes. None of this is unusual for an Indian company, but a UK founder running the subsidiary from London needs a local team, whether in house or outsourced to a firm like Krystal7, actually handling these on a monthly and quarterly rhythm, because the Registrar of Companies and tax authorities apply penalties for late filings regardless of where the parent company's decision makers sit.

Costs and timeline

Government fees versus professional fees

Indian company incorporation involves a mix of government fees, notarisation and apostille costs incurred in the UK, and professional fees for the firm managing the filing. Government fees for incorporation itself are modest and scale loosely with authorised capital, but should be treated as [current figure, to verify] since they are revised periodically. Apostille and courier costs for UK documents are a genuinely variable cost depending on how many directors and shareholders need documents authenticated, and are worth budgeting for separately rather than assuming they are trivial.

Professional fees for a UK founder incorporation, covering name reservation, DIN and DSC for the foreign director, SPICe plus filing, PAN and TAN, and the first round FC GPR filing, are typically quoted as a fixed package by firms working with foreign founders, precisely because the scope is predictable once the number of directors and shareholders is known. Ask any firm you are evaluating, including Krystal7, for a fixed fee quote covering the full incorporation bundle rather than a per task rate card, since per task pricing tends to expand once apostille delays or bank queries appear.

A realistic week by week timeline

A realistic sequence for a UK founder looks roughly like this. In the first one to two weeks, you gather and apostille UK director and shareholder documents while your Indian advisor reserves the company name and applies for DIN and DSC. In the following one to two weeks, once documents land in India, the SPICe plus Part B filing goes in along with PAN and TAN applications, and incorporation is typically granted within that window absent registrar queries. Bank account opening then generally takes a further one to two weeks, since banks run their own KYC process on the new company and its foreign shareholder. Capital remittance and the resulting FC GPR filing follow shortly after the account is funded.

End to end, a UK founder should budget for the process taking a small number of months from a standing start to a funded, operational bank account, with the apostille and bank KYC stages being the parts most likely to slip. Founders who start the UK side paperwork, apostille and director documents, before finalising every commercial decision about the entity generally get to a working bank account fastest.