Business Setup & Startup Advisory
End-to-end support for founders - from business setup in India to foreign subsidiary formation and registration, through to founder advisory and fund raising.
We support startups end to end, from business setup in India and foreign subsidiary registration through to founder advisory and fund raising. Whatever stage your venture is at, our role is to handle the regulatory and financial groundwork so you can focus on building.
Our Services
From business setup in India - whether by a resident founder or a foreign parent - to the first feasibility study, support across every stage of the startup journey.
Business Setup in India
End-to-end incorporation support whether you're a resident founder starting your own venture, or an overseas parent company - across Singapore, the US, UAE, UK, and beyond - setting up a subsidiary in India.
For Resident Founders
- Entity structuring advice - Private Limited Company vs. LLP vs. One Person Company (OPC) vs. Partnership Firm, matched to your fundraising plans and compliance appetite
- Name approval & incorporation - RUN application and SPICe+ filing for Private Limited Companies and OPCs, LLP-RUN and FiLLiP filing for LLPs, or Partnership Deed drafting and registration with the Registrar of Firms for partnership firms, matched to the entity chosen above
For a full walkthrough of entity selection, incorporation, and core registrations for resident founders, see our detailed guide on Business Setup in India.
For Foreign Parent Companies
- Entity structuring advice - Majority-Owned Subsidiary vs. Wholly Owned Subsidiary vs. Joint Venture vs. LLP vs. Branch/Liaison Office, matched to the parent's objectives
- Name approval & incorporation - RUN application and SPICe+ filing for a subsidiary Private Limited Company, LLP-RUN and FiLLiP filing for an LLP, or Form FNC filing with RBI for a Branch/Liaison Office, matched to the entity chosen above
- Board composition guidance - meeting the resident director requirement under Section 149(3), a check foreign-parent formations most commonly miss
For the full incorporation process and requirements common to every foreign-parent formation, see our detailed guide on Foreign Subsidiary Formation in India.
For Every Formation
- Directors, partners & core registrations - DSC/DIN for directors or designated partners, drafting of MOA/AOA or the LLP Agreement, along with application for PAN, TAN, EPF & ESI
- Post-incorporation registrations - Bank account opening, GST, and Startup India registration with application for tax exemption under DPIIT (where applicable), along with other applicable state government registrations such as Shops and Establishment
- Post-incorporation compliance calendar setup
- Trademark protection - registering your company name isn't the same as protecting it as a brand; we recommend and can coordinate Trademark Consulting alongside or right after incorporation
Once the entity is formed, ongoing compliance is handled across our other service lines - FEMA & RBI reporting and dematerialisation of securities under Corporate Laws & Compliance (for foreign-parent entities), transfer pricing and international tax advisory under Taxation, and payroll administration under Accounting & Business Support.
Formation by Parent Country
The core process stays the same under the Companies Act, 2013 - what changes by jurisdiction is the DTAA position, funding route nuances, and the questions parent-company finance teams usually raise first.
Several requirements apply uniformly regardless of the parent's country: FC-GPR filing with RBI on receipt of foreign investment, the resident director requirement under Section 149(3) (at least one board member with 182+ days' stay in India during the financial year), and GST under reverse charge on intercompany service fees and management charges paid to any foreign parent.
Singapore Companies Setting Up a Subsidiary in India
Singapore is a common jurisdiction for structuring investment into India, given its DTAA position and established holding-company framework. The Indian entity is still formed the same way - a Private Limited Company under the Companies Act, 2013.
- No Controlled Foreign Company (CFC) regime in Singapore - unlike the US or UK, profits retained in the Indian subsidiary aren't automatically attributed back to the Singapore parent for tax purposes
- Heightened GAAR scrutiny - GAAR under Chapter X-A can apply to any structure, but Singapore-routed holding entities face closer examination given the jurisdiction's history as a preferred conduit for investment into India
- Grandfathered capital gains treatment under the 2016 India-Singapore DTAA amendment, for shares acquired before 1 April 2017 - relevant where the Singapore entity holds legacy investments in Indian group companies
For DTAA position, GAAR scrutiny, and entity options specific to Singapore parents, see our dedicated Singapore formation guide.
US Companies Setting Up a Subsidiary in India
A US parent - typically a Delaware C-Corp or similar entity - most commonly sets up its Indian subsidiary as a wholly-owned Private Limited Company. FDI from the US falls under the automatic route in most sectors, so no prior RBI or government approval is needed before incorporation.
- India-US DTAA position on royalty, technical fee, and management fee remittances back to the US parent
- Check-the-box election - many US parents elect to treat the Indian subsidiary as a disregarded entity or partnership for US tax purposes under the entity classification rules, affecting how its income flows into the US parent's tax return
NCTI (Net CFC Tested Income, the regime formerly known as GILTI), Subpart F, and other US-side tax positions are outside our scope and need coordination with the parent company's US tax advisor - we handle the Indian entity's compliance end.
For check-the-box elections, NCTI/Subpart F considerations, and entity options specific to US parents, see our dedicated US formation guide.
UAE Companies Setting Up a Subsidiary in India
A UAE parent - whether a mainland LLC or a free zone entity - most commonly sets up its Indian subsidiary as a wholly-owned Private Limited Company under the Companies Act, 2013, with FDI from the UAE permitted under the automatic route in most sectors.
- India-UAE DTAA and CEPA position on royalty, technical fee, and management fee remittances back to the UAE parent
- Free zone vs. 100% foreign-owned mainland LLC - since the UAE's move away from mandatory local sponsorship, the parent's chosen structure affects how beneficial ownership is disclosed for Significant Beneficial Owner (SBO) reporting on the Indian subsidiary
- UAE's 9% corporate tax, in force since June 2023, is now a factor in group transfer pricing and profit-repatriation planning between the Indian subsidiary and its UAE parent - a consideration that didn't previously apply
For free zone vs. mainland structuring, SBO reporting, and entity options specific to UAE parents, see our dedicated UAE formation guide.
UK Companies Setting Up a Subsidiary in India
A UK Ltd parent forming an Indian subsidiary follows the same Private Limited incorporation route, with FDI from the UK also permitted under the automatic route in most sectors.
- India-UK DTAA treatment of withholding tax on royalty and technical fee remittances to the UK parent
- Group financial reporting alignment - UK parents commonly need the Indian subsidiary's statutory financials restated to a UK-compatible reporting standard (FRS 102/IFRS) for year-end group consolidation
- Share transfer & cap table mismatches - UK parents used to Companies House's share transfer process often assume the same forms apply in India; equity movements on an Indian subsidiary need Form FC-TRS filed with RBI and updated statutory registers under the Companies Act, 2013, in addition to any UK-side filings
- Funding route nuances - follow-on funding from the UK parent can come in as equity, ECB (External Commercial Borrowing), or intercompany loans, each with a different RBI reporting route and pricing/tenure restriction
UK CFC rules under Part 9A TIOPA 2010, Diverted Profits Tax, and other UK-side tax positions are outside our scope and need coordination with the parent company's UK tax advisor - we handle the Indian entity's compliance end.
For group reporting alignment, share transfer mechanics, and entity options specific to UK parents, see our dedicated UK formation guide.
Japanese Companies Setting Up a Subsidiary in India
A Japanese parent - typically a Kabushiki Kaisha or Godo Kaisha - most commonly sets up its Indian subsidiary as a wholly-owned Private Limited Company under the Companies Act, 2013, with FDI from Japan permitted under the automatic route in most sectors.
- India-Japan DTAA position caps withholding tax on dividend, interest, and royalty/technical fee remittances back to the Japanese parent at 10% of the gross amount
- Group reporting alignment - Japanese parents commonly need the Indian subsidiary's statutory financials, prepared under Indian GAAP/Ind AS, reconciled to J-GAAP or IFRS for year-end group consolidation
- Japan's Anti-Tax Haven (CFC) rules - can attribute the Indian subsidiary's retained profits back to the Japanese parent's taxable income if the subsidiary fails Japan's active-business/substance tests, or if India's effective tax rate falls below Japan's trigger rate
Japan's CFC trigger-rate mechanics and other Japan-side tax positions are outside our scope and need coordination with the parent company's Japan tax advisor - we handle the Indian entity's compliance end.
For DTAA position, group reporting alignment, and entity options specific to Japanese parents, see our dedicated Japan formation guide.
Australian Companies Setting Up a Subsidiary in India
An Australian parent - typically a Pty Ltd - most commonly sets up its Indian subsidiary as a wholly-owned Private Limited Company under the Companies Act, 2013, with FDI from Australia permitted under the automatic route in most sectors.
- India-Australia DTAA position taxes dividends to the Australian parent at 15%, with royalties covered under Article 12; fees for technical services aren't separately defined in the treaty, so uncovered payments fall back to the domestic Income-tax Act rate
- Lighter group reporting lift - both Ind AS and Australia's AASB are IFRS-converged, so reconciling the Indian subsidiary's financials for group consolidation is typically narrower than for non-IFRS-aligned jurisdictions
- Australia's CFC attribution rules under Part X of the Income Tax Assessment Act 1936 can attribute the Indian subsidiary's passive/"tainted" income back to the Australian parent unless the active income test exemption applies
The Australia-India Economic Cooperation and Trade Agreement (AI-ECTA), in force since December 2022, affects tariffs and certain Australian-side tax treatment, but doesn't change the Indian subsidiary's Companies Act or FEMA/RBI compliance obligations.
For DTAA position, CFC attribution rules, and entity options specific to Australian parents, see our dedicated Australia formation guide.
Choosing a CA Firm vs. a Formation Agent
Whichever country your parent company is based in, the same question is worth asking before you engage anyone for incorporation: are you actually working with a Chartered Accountant firm?
- Incorporation DeclarationSPICe+ incorporation filings require a compliance declaration certified by a practising professional - a CA, CS, Cost Accountant, or advocate - confirming the requirements of the Companies Act, 2013 have been met.
- Statutory Audit ReportRequired annually for every Indian company under the Companies Act, 2013.
- Tax Audit CertificationRequired above the prescribed turnover threshold, under the Income-tax Act.
- FC-GPR / FC-TRS CertificationRequired on RBI filings for foreign investment or share transfers.
- Share Valuation ReportsRequired for share issues, transfers, and ESOP pricing under FEMA and the Companies Act.
| CA Firm | Formation Agent | |
|---|---|---|
| Regulatory oversight | ICAI Code of Ethics, disciplinary mechanism | Usually none |
| Signs statutory/tax audits | Yes | No |
| Certifies RBI/FEMA filings | Yes | No - outsourced |
Somu & Associates is an ICAI-registered CA firm - the same team handles your incorporation, statutory audits, and RBI/FEMA certifications, with no handoff. See our firm credentials or get in touch to discuss your India entity setup.
Feasibility Studies & Financial Projections
Thorough feasibility studies, project reports, and financial projections that give founders a clear-eyed view before committing.
Founder Advisory
Direct, practical guidance from our team on the operational and financial decisions that come with running a startup - helping you think through strategy, navigate challenges as they arise, and stay grounded as you compete and grow.
Startup Ecosystem Access
Introductions and referrals drawn from our professional network - other founders, investors, and service providers - so you have the right people to turn to as your venture grows.
Advice on Fund Raising
Expert guidance on funding options, helping you secure the capital you need to fuel your growth plans.
Ongoing tax compliance for your startup - return filing, assessments, and registrations - is handled under Taxation. For hands-on support structuring and executing a funding round, see Transaction Advisory.
For a deeper look at feasibility studies, financial projections, and the fund-raising process end to end, see our detailed guide on Startup Advisory.
Common Mistakes Founders Make at Setup
A few structural mistakes come up repeatedly - most are easy to avoid if flagged before incorporation rather than after.
Choosing an LLP when external funding is planned
VCs and institutional investors invest through share purchases, not partnership interests - an LLP has no shares to sell. Founders who start as an LLP to save on early compliance often end up converting to a Private Limited Company right before a raise, adding legal cost and timeline pressure exactly when they can least afford delay.
Splitting founder equity 50-50 without a vesting schedule
An even split feels fair at day one, but without vesting, a co-founder who leaves after six months still walks away with half the company. Investors specifically check for this and can walk away from a deal over it.
Treating the resident director requirement as a formality
Every company needs at least one director who's stayed in India 182+ days during the financial year (Section 149(3)). Founders based abroad, or all-NRI founding teams, sometimes miss this until incorporation is rejected or a compliance notice arrives later.
Registering the company name and assuming the brand is protected
A company name registered with the RoC and a trademark are legally separate. A competitor can register a similar trademark even if your company name is already on record with the MCA.
Delaying GST registration until it becomes mandatory
Waiting for the turnover threshold means missing out on input tax credit in the early months, and B2B clients often expect a GSTIN before they'll even engage - registering early can remove a sales friction point.
Not budgeting for compliance from day one
Annual filings, auditor appointment, and DIR-3 KYC apply from the first year, not after the business "gets serious." Founders who treat compliance as something to figure out later often end up catching up under a penalty clock instead.
Assuming Startup India/DPIIT recognition happens automatically
It requires a specific application with supporting documents, such as a project report - it isn't something the RoC grants alongside incorporation.
Compliance Burden Across Entity Types
A side-by-side view of compliance load, revenue-generation ability, and taxation across the entity options resident founders and foreign parents most commonly choose between.
| Entity | Compliance Burden | Can Generate Revenue in India | Taxation |
|---|---|---|---|
| Private Limited Company | Highest - annual filings (AOC-4, MGT-7), statutory audit regardless of size, board meetings, DIR-3 KYC, ROC event-based filings | Yes, fully | Domestic company rate, ~25.17% effective under Section 200 (if opted) |
| OPC | Moderate - same core filings as a company, but relaxed board/meeting requirements; converts to Private Limited past prescribed turnover/capital thresholds | Yes, fully | Same as Private Limited Company |
| LLP | Lower - no mandatory audit below prescribed turnover/contribution thresholds, no board meetings, Form 11 and Form 8 annually | Yes, fully | Taxed as a partnership - no dividend distribution tax on profit withdrawal, unlike a company |
| Branch Office | Moderate-high - RBI approval to establish, annual activity certificate to RBI/AD bank, statutory audit, ROC filings as a foreign company | Yes, within RBI-approved activities only | Taxed as a foreign company - higher rate than a domestic Indian subsidiary |
| Liaison Office | Lower-moderate - RBI approval to establish, annual activity certificate, but no local revenue means simpler tax filings | No - representational activities only (liaison, market research); cannot invoice or generate income in India | No India tax on income, since none is permitted; return still filed |
| Project Office | Moderate - RBI approval (or automatic route if project criteria met), tied to a specific contract/project, winds up on project completion | Yes, but only for the specific contracted project - not general business activity | Taxed as a foreign company on project-related income |
Project Office is a third RBI-approved route for foreign parents alongside Branch and Liaison Office - used specifically to execute a contract awarded to a foreign company by an Indian entity, typically for infrastructure or turnkey projects, funded by inward remittance or backed by a term loan from an Indian PFI/bank.
Frequently Asked Questions
Common questions from founders and finance teams on business setup, foreign subsidiary formation, and startup advisory in India.
FAQ 01
Can only foreign companies invest in an Indian entity, or can individuals invest too?
No, foreign investment isn't limited to corporate entities. Individuals can invest too, including:
- NRIs - Non-Resident Indians
- OCIs - Overseas Citizens of India
- Other foreign nationals
All of them invest under the same FDI policy, sectoral caps, and reporting requirements - such as FC-GPR - that apply to corporate investors.
FAQ 02
Is 100% shareholding required for a foreign parent's Indian subsidiary, or can it be lower?
No, 100% isn't mandatory, and there's no minimum floor either - a foreign company can hold any percentage, including a minority stake. What changes is how the Indian entity gets classified:
- Above 50%, or board control - legally a "subsidiary" under Section 2(87)
- 20-50% - legally an "associate company" under Section 2(6)
- Below 20% - a plain minority-owned investee company, no special classification
FDI up to 100% is permitted under the automatic route in most sectors, and the percentage chosen ultimately depends on the parent's objectives, such as bringing in a local JV partner or minority Indian shareholders. A handful of sectors carry lower FDI caps, so the permissible ceiling should be checked sector-wise.
FAQ 03
Can a foreign company set up an LLP, partnership, or proprietorship in India instead of a Private Limited Company?
It depends on the entity type:
- LLP - Yes, 100% FDI is permitted under the automatic route, but only in sectors and activities where 100% FDI is already allowed automatically with no FDI-linked performance conditions attached
- Partnership firm - No, foreign companies and foreign nationals generally cannot invest in these at all
- Proprietorship concern - No, the same restriction applies
That route is reserved for NRIs and OCIs instead - see the next question for the specific terms.
FAQ 04
Can NRIs invest in an Indian LLP or partnership firm?
Yes, with some conditions:
- LLPs - NRIs/OCIs can invest under the automatic route, in the same eligible sectors as any other foreign investor
- Existing partnership firm or proprietary concern - Can join as a partner, but only on a non-repatriation basis, via inward remittance or their NRE/NRO/FCNR(B) account, and not where the firm is engaged in agricultural/plantation activity, print media, or real estate trading
- Starting a brand-new firm, or investing on a repatriation basis - Needs specific prior RBI approval either way
FAQ 05
What is the resident director requirement for a foreign-owned Indian subsidiary?
Under Section 149(3) of the Companies Act, 2013, every company - including one wholly owned by a foreign parent - must have at least one director who has stayed in India for a total of not less than 182 days during the financial year.
FAQ 06
Is GST applicable on management fees charged by a foreign parent to its Indian subsidiary?
Yes, intercompany service fees and management charges between a foreign parent and its Indian subsidiary typically attract GST under reverse charge, in addition to being subject to transfer pricing documentation and benchmarking requirements.
FAQ 07
Why do Singapore-based holding companies commonly invest into India?
Singapore's DTAA with India and its established holding-company framework make it a common jurisdiction for structuring investment into Indian subsidiaries, though genuine commercial substance is necessary to access treaty benefits, and Singapore-routed structures face closer GAAR scrutiny than most.
FAQ 08
Can a US company set up a wholly-owned subsidiary in India?
Yes. A US parent company can set up a wholly-owned subsidiary in India as a Private Limited Company under the Companies Act, 2013, with 100% FDI permitted under the automatic route in most sectors. The subsidiary needs at least one director who is a resident in India under Section 149(3).
FAQ 09
Can a UAE company set up a subsidiary in India?
Yes. A UAE parent - whether a mainland LLC or a free zone entity - can set up an Indian subsidiary as a Private Limited Company under the Companies Act, 2013, with FDI from the UAE permitted under the automatic route in most sectors. Accessing treaty benefits under the India-UAE DTAA and CEPA requires genuine commercial substance in the UAE, not just registration there.
FAQ 10
Does a UK parent company need RBI approval to invest in an Indian subsidiary?
In most sectors, no prior RBI approval is required - FDI from the UK falls under the automatic route, and the investment is reported to RBI via Form FC-GPR after the shares are allotted.
FAQ 11
Why do investors and VCs prefer a Private Limited Company over an LLP?
A few structural reasons converge here, not just convention:
- Share-based ownership - a Private Limited Company issues shares, the instrument VCs and institutional funds are built around (preference shares, CCPS, and similar). An LLP has no share capital, so standard equity instruments and valuation-based investing don't map onto it.
- ESOPs are structurally easier - an ESOP is an option to acquire shares at a future date; LLPs have no shares to grant, only a share in profits/capital, so equity-based employee incentive plans in the form investors expect don't exist for LLPs.
- Recognised governance - a board of directors and standard shareholder rights (drag-along, tag-along, anti-dilution) are built into company law. LLP agreements can be customised to mimic some of this, but it's bespoke drafting each time rather than a well-precedented structure.
- Bank and lender defaults - term loans and NBFC lending processes are generally built around company financials, board resolutions, and share pledges as collateral; LLP-based lending is less standardised.
- Exit and M&A mechanics - buying shares in a company is a clean, well-precedented transaction. Buying into an LLP means transferring partnership interest, a less common mechanism many acquirers' legal teams are less set up to execute quickly.
So founders planning to raise institutional funding generally avoid LLPs early on - not because LLPs are worse, but because the funding ecosystem is built around share ownership, and retrofitting that onto an LLP creates friction at every step.