Register an IT Company in India: UK Founder's Guide

India has become the default place for UK software founders and agency owners to build a development team. The pull is obvious: a deep talent pool, English as the working language, and a time zone that overlaps enough with the UK day for real time collaboration. What is less obvious to a first time founder is how many small decisions, entity type, director documentation, intercompany contracts, transfer pricing, and ongoing filings, sit between the idea of an Indian dev centre and an operating one. This guide walks through that path in the order you will actually face it.

Why IT firms are the busiest UK to India corridor

The GCC and dev centre wave

Over the past several years, a steady stream of UK software companies, digital agencies, and SaaS founders have set up their own development arms in India rather than continuing to route work through agencies or freelance platforms. Larger companies call this a Global Capability Centre or GCC, but the underlying logic is the same whether you are hiring three engineers or thirty: you want a team that reports into your product roadmap, holds your intellectual property, and grows with your business, not a vendor relationship you renegotiate every year.

Build versus EOR versus outsource, honestly compared

Before committing to incorporation, it is worth being honest about the alternatives. An Employer of Record, commonly called EOR, lets you hire Indian developers on a third party's payroll without setting up your own entity. This is fast and low commitment, but you do not own the contracting entity, the arrangement usually costs more per head over time, and ownership of work product and confidential information sits in a slightly more complicated chain of agreements. Pure outsourcing to an Indian agency avoids compliance altogether but means you rarely get dedicated, product minded engineers who think of themselves as part of your company.

Setting up your own Private Limited company gives you a team that is legally, culturally, and operationally yours, at the cost of the incorporation and compliance work this guide describes. For a founder planning a team beyond a handful of people, or one that expects to still be operating in India in three years, an owned entity is usually the more economical and more defensible choice, even though the upfront effort is higher than signing an EOR agreement.

Choosing the entity for an Indian dev arm

Private Limited as the default

For a UK company opening a development subsidiary in India, a Private Limited company is generally the default choice, and for good reason. It is a separate legal entity that can own intellectual property, sign its own contracts, employ staff directly, and open its own bank accounts, while your UK parent holds shares in it rather than being directly liable for its obligations. Under current regulations, foreign shareholding in an Indian Private Limited company engaged in IT and software services is permitted under the automatic route for most activities, meaning you generally do not need prior government approval to invest, though this should always be confirmed for your specific business activity before you proceed.

Branch and project offices, when they fit

A branch office or project office is a different structure, essentially an extension of the UK company itself rather than a separate Indian entity. These exist mainly for specific, time bound project execution or for representing an existing foreign business rather than for building a standing product development team. For a dev centre that will hire engineers, manage its own payroll, and operate indefinitely, a branch office is rarely the right fit and comes with its own approval requirements from the Reserve Bank of India that a Private Limited company does not need.

Why LLPs rarely suit funded tech

A Limited Liability Partnership can be simpler to run on paper, with lighter compliance than a company in some respects, but it is a poor fit for a tech subsidiary that expects future funding, employee stock options, or a straightforward exit or restructuring down the line. Investors and acquirers overwhelmingly expect a company structure, not a partnership, and converting an LLP into a company later adds cost and delay you can avoid by simply starting with a Private Limited company.

Registering the company step by step

SPICe plus Part A and B for foreign directors

Company incorporation in India runs through a single integrated web form known as SPICe plus, filed with the Ministry of Corporate Affairs. Part A covers name reservation, and Part B covers the incorporation application itself, including director details, registered office address, and share capital structure. For a UK parent setting up a wholly owned or majority owned Indian subsidiary, the form also captures the foreign shareholding and, where relevant, initial regulatory approvals. Foreign directors are fully permitted, but their identity and address documents need to be prepared to Indian standards, which is usually the part that surprises UK founders most.

DIN and DSC for UK residents

Every director of an Indian company needs a Director Identification Number, or DIN, and a Digital Signature Certificate, or DSC, to sign filings electronically. For a UK resident director, obtaining these involves notarised and apostilled copies of passport and address proof, since Indian authorities cannot verify UK documents the way they verify domestic ones. This step is straightforward but should be started early, since document preparation and courier time between the UK and India often takes longer than the actual government processing.

Apostille of UK documents

Because the UK and India are both parties to the Hague Apostille Convention, UK issued documents, passports, proof of address, and board resolutions from the parent company, can be apostilled in the UK rather than needing full consular legalisation. This is faster and cheaper than legalisation but still requires planning, since apostille processing has its own turnaround time that founders often underestimate when working backward from a target incorporation date.

Bank account and capital remittance

Once the company is incorporated, it needs an Indian bank account to receive share capital from the UK parent and to operate day to day. Banks will ask for the certificate of incorporation, PAN, board resolutions, and know your customer documents for the UK parent company and its directors. The capital itself is remitted from the UK as foreign direct investment and needs to be reported to the Reserve Bank of India through the filing described later in this guide.

The intercompany layer nobody warns you about

The development services agreement

Once the Indian entity exists, it needs a formal contract with the UK parent describing what services it provides, typically software development, testing, or support services, and on what commercial terms. This intercompany development services agreement matters for two reasons: it defines who owns the intellectual property created by the Indian team, which should sit with the UK parent or wherever the group intends to hold it, and it sets the basis on which the Indian entity is paid, which then feeds directly into transfer pricing.

Transfer pricing basics and Form 3CEB

Because the UK parent and the Indian subsidiary are related parties, any cross border transaction between them, including the fees paid for development services, falls under India's transfer pricing rules. In practice, this means the Indian entity generally needs to be paid on an arm's length basis, commonly structured as a cost plus markup on its operating expenses, rather than an arbitrary figure, so that Indian tax authorities can see the entity is earning a commercially reasonable margin for the services it provides. This typically involves preparing supporting transfer pricing documentation and filing an accountant's certified report, commonly known as Form 3CEB (the exact form and thresholds should be confirmed with your CA under the current Income Tax framework), alongside the annual tax return. Getting the intercompany pricing wrong is one of the most common and most expensive mistakes UK founders make with their Indian subsidiary, so this is an area worth involving your Indian accountant in from the earliest planning stage rather than after the first year of operations.

Paying the Indian entity from the UK

Payments from the UK parent to the Indian subsidiary under the development services agreement are typically routed as ordinary commercial remittances against invoices, not as capital contributions, since capital and operating payments are treated very differently under both company law and foreign exchange regulations. Cross border payments of this kind can also attract withholding tax obligations and reporting requirements on the Indian side, involving a chartered accountant's certificate for outward remittances under current cross border tax rules, so the exact mechanics should be confirmed with your CA before the first invoice is raised.

Compliance calendar after incorporation

FC GPR within 30 days

When the UK parent's share capital is received and shares are allotted to it, the Indian company generally needs to report this foreign investment to the Reserve Bank of India through a filing known as FC GPR, and under current regulations this is expected to be done within a set window after allotment. This is a foreign exchange filing, separate from any income tax filing, and missing it can create complications later when the company wants to issue further shares or repatriate funds.

FLA return every July

Companies with foreign direct investment or overseas investment on their books are also generally required to file an annual Foreign Liabilities and Assets return, known as the FLA return, with the Reserve Bank of India each year, typically due mid year. This is a recurring obligation that continues for as long as the foreign shareholding remains on the books, and it is easy to overlook once the initial incorporation excitement has passed.

ROC annual filings, GST, payroll

Beyond the FEMA filings above, the Indian subsidiary has the usual ongoing obligations of any Indian company: annual filings with the Registrar of Companies including financial statements and an annual return, statutory audit, income tax return filing, GST registration and returns if the company crosses the applicable turnover threshold or engages in taxable supplies, and payroll compliance covering employee provident fund, professional tax where applicable, and tax deducted at source on salaries. None of these are unusual for an Indian company, but a UK founder running the entity remotely needs a reliable local team, whether in house or outsourced to a compliance firm, tracking all of them on a calendar rather than reacting to notices.

Costs and timeline

Government fees versus professional fees

Incorporation involves two separate cost buckets. Government fees, covering name reservation, incorporation filing, stamp duty on the memorandum and articles, and PAN and TAN issuance, are relatively modest and vary with the state of incorporation and the authorised share capital chosen, so these should be confirmed against current government fee schedules rather than assumed. Professional fees, covering the work of a chartered accountant or company secretary in preparing filings, drafting the intercompany agreement, and handling apostille coordination, typically form the larger share of the total cost for a straightforward subsidiary and are usually quoted as a fixed package by firms working with foreign founders, which is worth asking for upfront so you can budget with certainty rather than facing itemised surprises.

A realistic week by week timeline

For a UK founder starting from scratch, obtaining DIN and DSC along with apostilled documents typically takes the first couple of weeks, run in parallel with name reservation. Incorporation itself, once documents are ready and filed, usually completes within a further one to two weeks under current processing norms, though this can vary with government workload and query resolution. Opening the bank account and completing the first capital remittance typically adds another one to two weeks on top of that. All told, a UK founder who starts document preparation promptly can generally expect an operating Indian entity, bank account included, within roughly six to eight weeks, though founders should build in buffer time for document courier delays and bank onboarding, which are the two steps most often underestimated.