Starting a business in India is an exciting opportunity, but for non-resident investors, understanding the process of company incorporation in India (also referred to as incorporation of company in India or company registration in India) can feel daunting. This guide walks you through the steps to set up a private limited company in India, the preferred vehicle for most foreign-owned businesses, with clear explanations and comparisons to help you navigate confidently. 

 

Why Choose Company Incorporation in India as a Private Limited Company? 

A Private Limited Company in India is comparable to a Limited Liability Company (LLC) in the U.S. or a Private Company Limited by Shares (Ltd) in the UK. It offers: 

• Fast-track entry through the SPICe+ system (Simplified Proforma for Incorporating Company Electronically Plus), which integrates multiple registrations—company incorporation, GST, PAN, TAN, EPFO/ESIC, professional tax, and bank account—in one streamlined application. 

• 100% foreign ownership allowed in most sectors under India’s Automatic Route, meaning no prior government approval for foreign direct investment (FDI). 

• Limited liability for shareholders, restricted to their capital contribution. 

• Separate legal entity status, enabling perpetual succession and easier access to loans and grants. 

 

Understanding FDI Rules for Incorporation of Company in India 

India allows foreign investment under two main routes: 

1. Automatic Route – Covers around 90% of business sectors. No Reserve Bank of India (RBI) or government approvals are required. 

1. Government Approval Route – Required for sensitive sectors like defence, telecom, or media. 

Investors from countries sharing a land border with India (e.g., China, Pakistan, Bangladesh) must obtain prior government approval due to national security policies. 

Prohibited sectors include gambling, tobacco manufacturing, chit funds, real estate trading (with exceptions), and atomic energy. 

 

Step-by-Step Process for Company Incorporation in India 

1. Obtain Digital Signatures (DSC) and Director Identification Numbers (DIN) 

• DSCs are mandatory for electronic filings; DINs are applied through the SPICe+ portal for all proposed directors. 

2. Name Reservation 

• Choose a unique name ending with “Private Limited.” Reserve it via the RUN service or directly through SPICe+ Part A. 

3. File SPICe+ Forms 

• Submit SPICe+ Part B (INC-32) along with eMOA (Memorandum of Association) and eAOA (Articles of Association). 

4. Register for Statutory Identifiers 

• Use AGILE-PRO-S to obtain: 

• PAN & TAN (tax IDs) 

• GSTIN (for indirect tax compliance) 

• EPFO & ESIC (employee benefit programs) 

• Professional tax (state-specific) 

• Bank account 

5. Certificate of Incorporation 

• ROC issues the Certificate of Incorporation with a unique Corporate Identification Number (CIN) on approval. 

6. Commencement of Business 

• File Form INC-20A within 180 days of incorporation, attaching the copyright showing the initial capital deposit. 

 

Timelines for Company Incorporation in India 

The incorporation of a private limited company in India typically takes 10 to 15 working days, subject to prompt document submission and approvals. Approximate timeline: 

• Day 1–3: Apply for DSCs for all directors. 

• Day 4–6: Reserve company name via SPICe+ Part A or RUN. 

• Day 7–10: File SPICe+ Part B, AGILE-PRO-S, eMOA, eAOA, and linked forms. 

• Day 11–15: ROC approves and issues the Certificate of Incorporation. 

Note: Timing may vary on completeness of documentation. 

 

Costs Involved in Incorporation of Company in India 

• Government fees: Nil for authorized capital up to INR 15 lakh ( USD 18,000), though stamp duty varies by state. 

• DSC charges: Approx. INR 1,000 (USD 12) per director. 

• Professional fees: Vary based on company complexity, investor nationality, and FDI compliance requirements. 

Plan for stamp duty, DSC charges, and advisory fees, even if government fees are minimal. 

 

Post-Incorporation Compliance after Company Registration in India 

Like in UK or US, after company registration in India, you need to maintain ongoing compliance: 

• Hold at least 4 board meetings per year. 

• Conduct Annual General Meeting (AGM). 

• Appoint an auditor within 30 days. 

• File annual returns (Form MGT-7) and financial statements (Form AOC-4). 

• Comply with Income Tax and GST filings based on thresholds. 

To learn more about post-incorporation compliance after company registration in India, read our detailed guide here. 

 

Tax & Repatriation Considerations 

India offers tax neutrality for foreign and domestic shareholders: 

• Uniform corporate tax rates apply. 

• Profits (dividends, share-sale proceeds) are freely repatriable after taxes, unless invested on a non-repatriation basis. 

 

FAQs on Company Incorporation in India 

Q. Is a Resident Director Required? 
Yes. Every Indian company must have at least one director who resides in India for 182+ days in a financial year. 

Q. Why is a Digital Signature needed? 
To electronically sign filings on the MCA portal—similar to DocuSign or other e-signing services. 

Q. What does AGILE-PRO-S include? 
It integrates tax and labour registrations (PAN, TAN, GSTIN, EPFO/ESIC) and bank account opening. 

Q. What are common mistakes during company incorporation in India? 

• Choosing a name similar to existing companies 

• Incorrect DIN/DSC details 

• Ignoring sector-specific FDI limits 

• Missing the INC-20A filing deadline 

Q. Can I convert my Private Limited Company later? 
Yes. You can switch to a Public Company, LLP, or One Person Company, subject to conditions. 

Q. What is the difference between repatriation and non-repatriation basis? 

• Repatriation: Profits can be sent back overseas. 

• Non-repatriation: Treated like domestic investment; not freely remittable. 

 

Setting up a company in India as a non-resident is very doable—especially with the integrated digital process in place. With proper guidance and local support, you can go from idea to incorporation within weeks.