How Much Does It Cost a Foreign Company to Set Up a Business in India?

If you're a foreign company planning to start a business in India, one of the first questions is often about cost. The actual amount depends on the type of business structure you choose and the services required during and after setup. Whether you're from the USA, Singapore, Japan, Australia, the UK, or another part of the world, choosing the right structure is an important first step. Business set up services can help you understand the available options and the work involved.

What Decides the Cost of Setting Up a Business in India?

There isn't one fixed setup cost for every foreign company. PKP's material lists several business structures available in India, and each has different requirements.

The available structures include:

•  Private Limited Company
•  Public Limited Company
•  Limited Liability Partnership (LLP)
•  Partnership
•  Sole Proprietorship

For a foreign investor or foreign company, other entry options are also available:

Wholly Owned Subsidiary Company

• Branch Office
• Liaison Office
• Project Office
• Joint Venture Company

The nature and size of the business, risk factor, available financial resources, and market segment are among the factors that can affect the choice of structure.

Which Business Structure Should a Foreign Company Choose?

The cost question makes more sense after deciding how the company plans to operate in India. A Private Limited Company, LLP, Branch Office, or Liaison Office does not serve the same purpose.

 Private Limited Company

A Private Limited Company can have a maximum of 200 shareholders and requires at least two shareholders. The liability of shareholders is limited to the unpaid amount on their shares, subject to the conditions stated in the source material.
LLP

An LLP combines limited liability with the flexibility of a partnership. It is a separate legal entity, and the liability of partners is limited to their agreed contribution.

Branch, Liaison and Project Offices

A foreign company can also consider a Branch Office, Liaison Office, or Project Office based on its intended activities in India. A Liaison Office, for example, is mainly used to explore the business and investment climate and carry out liaison activities. A Project Office is meant for carrying out activities related to a specific project in India.

What Services Add to the Setup Work?

The overall cost also depends on what support a foreign business requires. Setting up an entity is only one part of the process. PKP's business set up services cover support such as:

• Choosing suitable entry options
• Company registration
• Company name reservation and approval
• Class 2 DSC processing for subscribers and directors
• ROC e-form filing
• Incorporation-related work
• Post-incorporation accounting
• Company Law compliance
• FEMA and RBI requirements
• GST and Income Tax compliance

PKP also provides support after incorporation, including maintenance of books of accounts and applicable compliance based on the business structure.

Why Should Foreign Companies Plan Beyond Registration Costs?

A foreign business should look at the full setup and post-setup requirements rather than focusing only on registration. The structure selected can affect the type of compliance and accounting work required later.

This is where proper planning helps. A company entering India can first understand its business model, select an appropriate structure, and then identify the registrations and post-incorporation work it will need.

Plan Your Business Setup in India

There is no single cost that applies to every foreign company setting up in India. The structure, business needs, and required services all have a role in determining the overall work involved. If you're looking for business set up services and want help choosing an appropriate structure and handling the setup process, contact PKP Consult to discuss your requirements.