Most foreign companies hiring in India eventually consider a wholly-owned subsidiary. It gives you a real Indian employer, an Indian bank account, GST registration with input-credit reclamation, the ability to lease office space, and a clean acquisition target. The setup looks intimidating on paper. In practice, with the right sequencing, it takes about six weeks.
Structure — Pvt Ltd is almost always the answer
Foreign tech companies have three viable structures: Private Limited Company (Pvt Ltd), Limited Liability Partnership (LLP), and Branch / Project Office. Pvt Ltd is the default for 95% of cases — it's the only structure that allows automatic-route FDI in most sectors, supports ESOPs cleanly, and is the only one that scales to an exit.
| Structure | FDI route | Suits | Notes |
|---|---|---|---|
| Pvt Ltd (Wholly-owned subsidiary) | Automatic route in most tech sectors (100% FDI) | Tech, SaaS, services, GCCs | Default choice. Standard ESOP plan. |
| LLP | Automatic route, with conditions | Service firms, advisory | No ESOP. Tougher to acquire. |
| Branch / Project Office | RBI approval needed | Construction project, specific contract | Limited scope. Not for ongoing operations. |
FDI route — automatic vs. approval
Foreign direct investment into India is governed by FEMA and the consolidated FDI policy. For tech, SaaS, IT services, ITES, e-commerce B2B and most software businesses, 100% FDI is permitted under the automatic route — meaning no prior RBI or government approval is needed; you just need to file the post-investment reporting (FC-GPR) within 30 days of share allotment.
Sensitive sectors — defence, telecom, broadcasting, single-brand retail, certain financial services — require government approval through the FIFP portal. If you're in one of these, factor an additional 30-90 days.
Sector-specific FDI clearance handled by FastLegal
If you're not certain whether your business falls under automatic route or approval route, your dedicated consultant maps the activity codes to the consolidated FDI policy, flags any conditional clauses (lock-in, downstream investment), and files the post-investment paperwork. You don't need to learn FEMA.
The full registration stack
Once your Pvt Ltd is incorporated, you need a stack of statutory registrations before you can start operations. Sequenced correctly, these all run in parallel and finish in roughly three weeks.
- Certificate of Incorporation (CoI) — issued by MCA on filing SPICe+. Carries the company's CIN. 7-10 working days.
- PAN of the company — auto-allotted with CoI under SPICe+.
- TAN — needed before you deduct TDS on first salary or vendor payment. Apply on TIN-NSDL portal. 5-7 working days.
- GSTIN — apply on GST portal. Required for SaaS, services and any B2B invoicing. 5-10 working days.
- Shops & Establishments Act registration — state-specific, online portal of the relevant state's labour department. 5-15 working days.
- PF establishment code — apply on EPFO Unified portal once you have 20 employees (or voluntarily earlier). 7-15 working days.
- ESI code — apply on ESIC portal once you have 10 employees including anyone earning under the ESI ceiling. 7-15 working days.
- Professional Tax (Employer) enrolment — state-specific, monthly returns required. Same week as Shops Act.
- Import Export Code (IEC) — only if you import or export goods. DGFT portal, 2-3 working days.
- STPI / SEZ registration — only if you're claiming export-of-services benefits. Usually 2-4 weeks.
FEMA, capitalisation and banking
Once incorporated, the company needs to be capitalised from the foreign parent. This is where most foreign founders trip — the FEMA timing rules are strict and the bank will refuse to credit your operating account until everything is in order.
- Open the operating bank account with an authorised dealer (any commercial bank — ICICI, HDFC, Axis, Kotak, Citi, etc.).
- Send the share subscription money from the foreign parent. The remittance must reference the share allotment and be in convertible foreign currency.
- Issue shares to the parent within 60 days of receipt of inward remittance (per FEMA 20).
- File Form FC-GPR with RBI through the AD bank within 30 days of allotment. The AD bank acts as intermediary; you don't file directly.
- Maintain the Foreign Inward Remittance Certificate (FIRC) and the FC-GPR acknowledgement permanently — these are asked at every future audit and at acquisition.
Realistic 45-day timeline
| Days | Milestone |
|---|---|
| 1-3 | Engagement signed. KYC for directors. Choose company name (RUN application). |
| 4-12 | File SPICe+. CoI issued. PAN, TAN auto-allotted. |
| 13-20 | Open operating bank account. Apply for GSTIN, Shops Act, PT enrolment in parallel. |
| 21-28 | GST and Shops Act issued. Apply for PF, ESI. |
| 28-35 | Inward remittance received. Shares allotted. PF and ESI codes issued. |
| 35-42 | Form FC-GPR filed. First employees onboarded. First payroll cycle prepared. |
| 42-45 | First payroll run. First TDS deposit. Company is operationally live. |
End-to-end subsidiary setup, single point of contact
FastLegal runs the entire 45-day setup as one engagement. Your dedicated consultant is the single owner — incorporation, registrations, FEMA, banking introductions, first payroll, first TDS. You sign documents; we file everything.
Frequently asked questions
What's the minimum paid-up capital for a Pvt Ltd in India?+
₹1 (one rupee) is the statutory minimum since 2015. In practice, capitalise enough to cover your first 6 months of operations — usually 10-50 lakhs INR for a small tech subsidiary.
Can a foreign national be the sole director?+
No — at least one director must be ordinarily resident in India (182+ days in India in the previous financial year). Hire someone, appoint a co-founder relocating, or use a nominee professional director for the first 6-12 months.
How long until we can issue offer letters?+
Day 14-20. You need the CoI and PAN to issue letters that name the company correctly; you don't strictly need PF / ESI / TAN to issue offers — those can come in by start date.
What about an India holding company structure?+
Most foreign tech companies just hold the Indian Pvt Ltd directly from the US / UK parent — no intermediate holdco. Singapore / Mauritius holdcos used to be common for tax planning; with GAAR and the Mauritius treaty reset, the holdco play is rarely worth the complexity for early-stage companies.
Stop reading circulars. Start running clean payroll.
Every FastLegal plan ships with a dedicated payroll consultant — a real human who runs your PF, ESI, PT, TDS and Form 16 issuance, configured to your salary structure, your state, and your hiring plan. You sign off. We do the rest.