Frequently Asked Questions

A business visa only permits activities like meetings, negotiations, and exploring business opportunities — it does not authorize drawing a salary from an Indian entity or performing employment duties; anyone actually working for or being paid by an India-based entity needs an Employment Visa instead, and using a business visa for employment activity is a compliance violation.  Read full answer →

A single continuous stay on a Business Visa is generally capped at 180 days, even though the visa itself may be valid for multiple years with multiple entries — a foreign national needing to stay longer than 180 days continuously, or actually take up employment, needs to register with FRRO before the 180-day mark or transition to an Employment Visa rather than simply extending the business visa indefinitely.  Read full answer →

An India Employment Visa generally requires the foreign national's annual salary to meet a minimum threshold of about 1.6 lakh rupees per month, and the role must be a skilled or managerial position that the employer can reasonably justify was not readily fillable by an equally qualified Indian national, with limited sector-specific exceptions for certain specialist roles.  Read full answer →

Yes — the spouse and dependent children of a foreign national on an Employment Visa can accompany them to India on an Employment (X) Visa dependent endorsement, which is linked to the primary visa holder's status and does not by itself authorize the dependent to take up employment or paid work in India.  Read full answer →

A foreign national on an Employment Visa, or any visa valid for more than 180 days, must register with the local Foreigners Regional Registration Office (FRRO) within 14 days of arrival in India — this is a separate step from the visa itself and missing the deadline can result in fines or complications at the time of visa renewal or exit.  Read full answer →

A straightforward wholly-owned subsidiary can be incorporated in 3-6 weeks; opening the corporate bank account typically adds another 1-3 weeks depending on the bank's KYC process for foreign-owned entities.  Read full answer →

A wholly-owned subsidiary gives full control and can undertake commercial activity; a joint venture shares control and risk with an Indian partner; a liaison office can only represent the parent and cannot invoice or earn revenue in India. The right choice depends on control, capital commitment, and whether you need to transact commercially from day one.  Read full answer →

Using a Power of Attorney (PoA) from the foreign promoters to a locally authorised representative in India, incorporation can typically be completed in under 40 days — far faster than a process requiring every document to be signed, notarised, and apostilled abroad.  Read full answer →

Yes — foreign directors and promoters do not need to be physically present in India. Documents can be executed abroad and apostilled, or a Power of Attorney can authorise a locally based representative to sign on their behalf, which is usually faster.  Read full answer →

A Build-Operate-Transfer (BOT) GCC lets an operating partner set up and run the centre first, with ownership transferring to the foreign company later — useful when speed and reduced upfront risk matter more than immediate full ownership. Direct incorporation gives full control and ownership from day one but requires the foreign company to build the operational capability itself.  Read full answer →

FEMA reporting of the foreign investment (Form FC-GPR) within 30 days of share allotment, GST registration if applicable, statutory auditor appointment, and commencement-of-business filing are among the obligations that begin immediately — not after the first year.  Read full answer →

Government fees for incorporating a private limited company are relatively small (typically a few thousand rupees in stamp duty and filing fees, scaling with authorised capital); professional fees for structuring, drafting, and compliance advice make up the larger share of total cost and vary by complexity.  Read full answer →

A change in an Indian company's foreign shareholding is a FEMA-reportable event — the Reserve Bank of India needs to be intimated of the change of ownership, separately from the income tax and stamp duty filings on the transaction itself.  Read full answer →

When a non-resident buys shares from an Indian resident seller (or vice versa), the buyer generally has to withhold tax on the capital gains portion of the price before paying the seller — the exact rate depends on the shares' holding period, valuation, and any applicable tax treaty.  Read full answer →

It depends entirely on the shareholders' agreement — many include a right of first refusal, tag-along, or consent requirement that other shareholders must sign off (or waive) before a transfer can proceed, even if company law itself wouldn't otherwise require their consent.  Read full answer →

Late payment or an incorrect withholding tax calculation on a share sale can trigger interest, penalties, and disallowance risk for the buyer, and can complicate the seller's ability to claim credit for tax that should have been deducted — it's worth getting the valuation and rate right before, not after, payment.  Read full answer →

A share transfer with straightforward board/shareholder consents can close in 6-10 weeks from signed term sheet to final RBI compliance closure; transactions requiring asset valuation, multiple shareholder consents, or sector-specific approvals typically take longer.  Read full answer →

A share purchase transfers ownership of the company as-is, including its existing liabilities and history; an asset purchase lets the buyer select specific assets and leave unwanted liabilities behind, but usually involves more complex transfer mechanics (licenses, contracts, employees) and different tax treatment.  Read full answer →

Yes — an existing foreign entity (including one already holding shares in the target, or an entirely new outside investor) can directly acquire shares in an Indian company without first incorporating a separate India entity, subject to FEMA pricing and sectoral rules.  Read full answer →

The DPDP Act allows the Data Protection Board of India to impose financial penalties of up to 250 crore rupees for a single instance of non-compliance, with the exact amount scaled to the nature, severity, and duration of the breach - failure to implement reasonable security safeguards and failure to notify a breach carry among the highest penalty ceilings under the Act.  Read full answer →

Yes — the Digital Personal Data Protection (DPDP) Act applies to any processing of personal data of individuals located in India, including by entities outside India, if that processing is connected with offering goods or services to those individuals — physical presence in India isn't a prerequisite for the law to apply.  Read full answer →

Valid consent under the DPDP Act must be free, specific, informed, unconditional, and unambiguous, given through a clear affirmative action, and accompanied by an itemized notice describing exactly what personal data is collected and for what purpose - pre-checked boxes, bundled consent for unrelated purposes, and vague blanket permissions do not meet this standard.  Read full answer →

Yes, in general the DPDP Act does not impose a blanket data localization requirement or a whitelist of approved countries for cross-border transfer, unlike some other jurisdictions, but the central government retains power to restrict transfers to specific countries by notification, so transfers should be checked against the current restricted list before assuming they are unconstrained.  Read full answer →

The DPDP Act requires a Data Fiduciary to notify the Data Protection Board of India and affected data principals of a personal data breach without delay — the rules specify a defined reporting window measured in hours from becoming aware of the breach, making an internal incident-response plan a practical necessity, not just good practice.  Read full answer →

An Employer of Record legally employs staff in India on your behalf, without you needing your own registered entity; a subsidiary is your own legal entity that employs staff directly. EOR trades some cost efficiency and long-term flexibility for speed and zero entity-setup burden.  Read full answer →

EOR itself is a legitimate, widely-used structure in India when set up correctly — the compliance risk arises specifically when the day-to-day control an EOR's client exercises over an employee starts to look like a direct employer relationship, which can create misclassification or permanent establishment exposure.  Read full answer →

The switch typically pays off once headcount and per-employee EOR fees grow large enough that a subsidiary's fixed compliance cost becomes cheaper on a per-head basis — commonly somewhere in the 10-20+ employee range, though the right trigger is really commitment and control needs, not headcount alone.  Read full answer →

An EOR is responsible for Provident Fund (PF), Employee State Insurance (ESI) where applicable, gratuity accrual, professional tax, and statutory leave entitlements — the same compliance a subsidiary would owe as a direct employer, just administered under the EOR's registrations instead of yours.  Read full answer →

Hiring through an EOR typically takes 1-2 weeks from offer acceptance to the employee's first day, since there's no entity to incorporate — the main variables are background verification turnaround and how quickly employment terms and compensation structure are finalised.  Read full answer →

Yes, indirectly — the Corporate Sustainability Reporting Directive (CSRD) applies at the EU parent's consolidated group level, which means the India subsidiary's environmental, social, and governance data must be collected and reported as part of the parent's group-wide CSRD disclosure, even though the India entity itself has no direct filing obligation under EU law.  Read full answer →

Whether ESG data needs third-party assurance depends on the reporting framework driving it — CSRD phases in mandatory limited assurance (moving toward reasonable assurance over time) for in-scope EU parents, India's own BRSR requires reasonable assurance for the core metrics of top listed companies, while purely voluntary sustainability reporting has no assurance requirement, though many companies obtain it anyway for credibility.  Read full answer →

The Corporate Sustainability Due Diligence Directive (CSDDD) requires large in-scope EU companies to identify, prevent, and address human rights and environmental risks across their full value chain, including suppliers and subsidiaries outside the EU — an India subsidiary or supplier feeding into a covered EU company's supply chain can expect due diligence questionnaires, audits, and contractual compliance clauses as a result.  Read full answer →

Yes — if a US-listed parent is subject to SEC climate-related disclosure requirements, its consolidated filings need to reflect material climate risks and greenhouse gas data across the group, which means an India subsidiary with meaningful emissions, energy use, or climate-related risk exposure becomes a required data source for the parent's SEC filing, similar to how CSRD works for EU-listed parents.  Read full answer →

Business Responsibility and Sustainability Reporting (BRSR) is mandatory only for the top 1,000 listed companies by market capitalization on Indian stock exchanges — an unlisted India subsidiary of a foreign parent has no direct BRSR filing obligation, though it may still need to supply ESG data if it is a material subsidiary feeding into a listed group entity's BRSR disclosure.  Read full answer →

For a new investment (not one predating April 2017), Mauritius and Singapore no longer shield capital gains from Indian tax — that benefit was removed by treaty amendments in 2016-2017. UAE currently offers capital gains taxed only in UAE with zero India withholding, making it the more relevant option for gains-focused structuring, though Mauritius still has a lower dividend withholding rate.  Read full answer →

Most sectors allow 100% FDI under the automatic route with no prior government approval; a smaller set of sectors (including defence, media, and certain financial services) cap the permitted foreign stake or require government approval above a threshold, and a few remain restricted or prohibited.  Read full answer →

GIFT City/IFSC offers a genuine tax holiday (100% profit deduction for 10 of the first 15 years under Section 80LA) for eligible units, but the benefit is specific to certain financial-services and fund activities — it isn't a general-purpose substitute for an overseas holding jurisdiction for every business.  Read full answer →

Dividends can generally be repatriated from an India subsidiary without a separate RBI approval, since dividend payment on equity shares is under the automatic route — but Indian withholding tax applies at the point of payment, at a rate that depends on the applicable tax treaty.  Read full answer →

Mauritius requires roughly ₹27 lakh (about USD 45,000) in annual local operating expenditure to meet the Limitation of Benefits test; Singapore's threshold is SGD 200,000. These are ongoing costs, not one-time setup costs.  Read full answer →

GAAR targets arrangements whose main purpose is obtaining a tax benefit without genuine commercial substance — a holding structure with real local operations, staff, and decision-making is far less exposed than a shell entity used only to access treaty rates.  Read full answer →

No — while a wholly-owned subsidiary is the most common structure for a full-scope GCC, companies can also start under a Build-Operate-Transfer (BOT) model through a local partner's entity and convert to their own legal entity later, or use a branch office structure in narrower cases, depending on how much control and how fast a start they need.  Read full answer →

There's no single best city — Bengaluru and Hyderabad lead for tech/product talent depth, Pune and Chennai for engineering and manufacturing-linked GCCs, and Gurugram/NCR for finance and shared-services GCCs; the right choice depends on the talent pool your GCC needs and your real-estate/cost tolerance.  Read full answer →

Most successful GCCs start with well-defined, process-heavy functions like IT support and application maintenance, finance and accounting shared services, or customer support, then expand into higher-value work such as product engineering, analytics, and R&D once the centre has proven delivery reliability and built management credibility with headquarters.  Read full answer →

A well-planned GCC can go from entity incorporation to 100+ employees in roughly 9 to 15 months, with the first 3-4 months consumed by legal setup and leadership hiring, and headcount ramping steadily once core team leads and delivery processes are in place.  Read full answer →

A GCC typically costs more upfront to set up than outsourcing to a BPO vendor, but delivers a lower fully-loaded cost per employee at scale (usually beyond 100-150 headcount) along with full IP ownership, direct process control, and no vendor margin — the crossover point depends on function complexity and how long you plan to run the operation.  Read full answer →

GST registration is typically granted within about a week of a complete online application, provided PAN, incorporation documents, and proof of the registered business address are in order — delays usually come from document mismatches or address verification, not the process itself.  Read full answer →

A Letter of Undertaking lets an exporter supply goods or services without paying GST upfront and claiming a refund later — without an LUT on file, the subsidiary must pay GST on export invoices and then go through a separate, slower refund process, tying up working capital.  Read full answer →

Services supplied by a foreign company to an Indian recipient are treated as an import of services under GST — taxed via reverse charge in the hands of the Indian recipient in most business-to-business cases, meaning the foreign supplier doesn't need to register or charge GST itself.  Read full answer →

Under reverse charge, the recipient of a supply pays GST directly to the government instead of the supplier — this applies most commonly to an India subsidiary importing services from its foreign parent, since the foreign supplier isn't GST-registered in India to charge it directly.  Read full answer →

A foreign company without a physical presence in India generally doesn't register for GST itself — GST obligations typically attach to its India subsidiary or, for certain digital services sold directly to Indian consumers, through the OIDAR (cross-border digital services) registration regime.  Read full answer →

An India subsidiary must file its statutory accounts under Indian Accounting Standards (Ind AS) or Indian GAAP, not IFRS directly — Ind AS is India's own IFRS-converged framework, so while it's closely aligned with IFRS, there are specific carve-outs and timing differences that mean a straight IFRS filing isn't accepted for Indian statutory purposes.  Read full answer →

Indian statutory accounts must follow the April-to-March financial year regardless of the parent's fiscal calendar, so a foreign parent with a different year-end (calendar year, or a non-March fiscal year) needs the India subsidiary to prepare an additional set of interim or stub-period financials aligned to the group's reporting calendar for consolidation purposes.  Read full answer →

XBRL filing of financial statements with the Registrar of Companies is mandatory for companies meeting specified thresholds — listed companies and their Indian subsidiaries, companies with turnover of ₹100 crore or more, or paid-up capital of ₹5 crore or more — while smaller companies can file financial statements in standard PDF format instead.  Read full answer →

Most foreign parents require a monthly management reporting pack from their India subsidiary covering trial balance, P&L and balance sheet on the group's chart of accounts, key operational KPIs, and intercompany reconciliations — typically due within 5-10 working days of month-end to feed into group consolidation.  Read full answer →

Yes — every company incorporated in India, including a wholly-owned subsidiary of a foreign parent, must have its financial statements audited annually by a Chartered Accountant registered with the Institute of Chartered Accountants of India, regardless of turnover, profitability, or whether the company has commenced commercial operations.  Read full answer →

Any entity importing or exporting goods in India needs an Importer Exporter Code (IEC) from the Directorate General of Foreign Trade before the first shipment; certain product categories additionally require sector-specific licenses or registrations depending on what's being traded.  Read full answer →

Every product's import status is determined by its HS code classification under India's Foreign Trade Policy — goods fall into free, restricted (requiring a specific DGFT license), or prohibited categories, and checking the ITC-HS classification schedule against your product's tariff code before shipping is the only reliable way to confirm which bucket it falls into.  Read full answer →

Customs clearance for a straightforward shipment with complete, correctly-filed documentation typically takes 2-4 days at major Indian ports and 1-2 days at airports, but incomplete paperwork, first-time importer scrutiny, or a product falling under a regulator's additional clearance requirement can extend this to 1-2 weeks or more.  Read full answer →

India offers several schemes that let exporters import inputs or capital goods without paying full customs duty — including Advance Authorisation, the Export Promotion Capital Goods (EPCG) scheme, and Special Economic Zone status — each suited to a different mix of import volume, capital investment, and export commitment.  Read full answer →

Customs duty in India is calculated on the assessable value of goods (broadly the CIF value plus certain adjustments) and combines Basic Customs Duty with IGST and, for some goods, additional cesses; the applicable rate depends on the product's HS classification code, so accurate tariff classification is the first step in any landed-cost estimate.  Read full answer →

Under Indian copyright and patent law, IP created by an employee in the course of employment generally belongs to the employer by default, so if the India entity directly employs the developers, the India entity technically owns the resulting IP unless an intercompany agreement assigns it to the foreign parent — without that assignment agreement in place, the group's IP ownership structure can end up misaligned with its intended structure.  Read full answer →

A foreign company can file a trademark application directly in India through an authorized agent, without needing a local entity first, but full registration typically takes 18 to 24 months from filing to certificate issuance if there is no opposition, though the mark gets usable priority protection from the filing date itself.  Read full answer →

A foreign IP owner has several enforcement routes in India — a civil infringement suit seeking injunction and damages, criminal complaints for counterfeiting under the Trade Marks Act and Copyright Act, and Customs recordal to have counterfeit goods intercepted at the border — and having a registered trademark or patent in India significantly strengthens all three routes.  Read full answer →

Copyright protection in India arises automatically upon creation of an original work, including software code, and does not require registration to exist — but formal registration with the Copyright Office provides a public record and prima facie evidence of ownership that makes enforcement in an infringement dispute significantly easier and faster.  Read full answer →

Most foreign companies that already have a pending international PCT application should enter the India national phase within 31 months of the priority date rather than filing a fresh Indian application, since the national phase route preserves the original priority date and avoids duplicating the application drafting and examination process from scratch.  Read full answer →

An India subsidiary with related-party international transactions must maintain contemporaneous TP documentation and file Form 3CEB annually; above certain revenue and transaction-value thresholds, it also needs a Master File and, if the group meets the consolidated revenue threshold, Country-by-Country Reporting.  Read full answer →

An Advance Pricing Agreement (APA) is a multi-year agreement with India's tax authority that fixes the transfer pricing method for specified related-party transactions in advance, giving certainty and removing annual TP audit risk for those transactions — it's worth pursuing for high-value, recurring intercompany transactions where litigation risk or valuation complexity is high.  Read full answer →

India's transfer pricing rules require related-party transactions to be priced using one of six prescribed methods (CUP, resale price, cost plus, TNMM, profit split, or another method), benchmarked against comparable independent companies; if a tax officer disagrees with the benchmarking during a TP audit, they can make an adjustment that increases taxable income and triggers penalties.  Read full answer →

India's safe harbour rules let eligible taxpayers — mainly IT/ITeS, KPO, and contract R&D units — declare a pre-agreed minimum operating margin on related-party transactions and have it automatically accepted without a transfer pricing audit, provided the transaction category and value fall within the notified thresholds.  Read full answer →

Yes — if foreign employees regularly visit India and habitually conclude contracts, negotiate key terms, or work from a fixed place on the parent's behalf, tax authorities can assert a dependent agent or fixed-place Permanent Establishment, exposing the foreign company's India-linked profits to Indian tax.  Read full answer →

India's four new labour codes — Wages, Industrial Relations, Social Security, and Occupational Safety — consolidate 29 existing laws and introduce a uniform definition of 'wages' that will require restructuring compensation so basic pay is at least 50% of total cost-to-company, directly affecting PF and gratuity calculations once fully implemented across all states.  Read full answer →

An India employment contract must comply with the applicable state Shops & Establishments Act and the new labour codes as they roll out, and should clearly define wages and their breakdown, working hours, leave entitlements, notice period, and termination grounds — verbal or informal arrangements leave both employer and employee exposed if a dispute arises.  Read full answer →

An employee becomes eligible for gratuity after completing 5 years of continuous service with the same employer, and it's calculated as 15 days' wages (based on the last drawn basic salary plus dearness allowance) for each completed year of service, payable on resignation, retirement, termination, or death.  Read full answer →

Provident Fund (PF) registration becomes mandatory once an establishment has 20 or more employees, and Employee State Insurance (ESI) becomes mandatory at 10 or more employees in most states — both apply from the date the threshold is crossed, not from a later compliance deadline, so hiring plans should account for this trigger in advance.  Read full answer →

Termination in India requires following the notice period and process specified in the employment contract and applicable state law, documenting the grounds (performance, conduct, or redundancy), and paying full and final settlement including any accrued leave, gratuity, and notice pay — skipping documented process is the most common source of wrongful termination claims.  Read full answer →

An India subsidiary with import/export exposure can hedge using RBI-permitted instruments like forward contracts, options, and natural hedging (matching foreign currency receivables against payables) — the right mix depends on the size and predictability of the exposure.  Read full answer →

Cash pooling and centralized global treasury structures common in other jurisdictions are constrained in India by FEMA — India doesn't freely permit cross-border automatic cash sweeps the way some regional treasury centres do, so most MNCs run day-to-day India treasury locally with a structured, RBI-compliant repatriation cadence instead.  Read full answer →

A loan from a foreign parent to its India subsidiary is typically structured and reported as an External Commercial Borrowing, requiring registration with the RBI through an authorised dealer bank and periodic reporting for the life of the loan — informal or undocumented intercompany loans create real FEMA compliance risk.  Read full answer →

Beyond dividends, common repatriation routes include royalty or technical/management fee payments for genuine services or IP use, buyback of shares, capital reduction, and intercompany loan repayments — each has its own tax withholding rate, transfer pricing scrutiny, and RBI reporting requirement.  Read full answer →

An India subsidiary can hold a foreign currency account only in specific permitted situations, such as an Exchange Earners' Foreign Currency (EEFC) account for exporters — general-purpose foreign currency accounts for routine business use are not freely available the way a rupee account is.  Read full answer →

External Commercial Borrowing lets an India subsidiary borrow directly from its foreign parent or other overseas lenders, subject to RBI limits on end-use, minimum average maturity, and an all-in-cost ceiling — it's often cheaper than local rupee borrowing but comes with its own compliance track.  Read full answer →