Expanding into India offers immense growth opportunities, but foreign companies must navigate a complex regulatory environment to establish and operate smoothly. The first 12 months are crucial — this is when foundational decisions, statutory registrations, and operational systems are put in place. Whether you’re setting up a wholly owned subsidiary, branch office, or liaison office, following a structured compliance checklist can help prevent legal hurdles and ensure a stable entry.
Here’s a comprehensive compliance roadmap for foreign entities in India during the initial year:
Month 1–2: Legal Incorporation & Structuring
Choose the Right Entry Route
Decide between a Wholly Owned Subsidiary (WOS), Joint Venture (JV), Branch Office (BO), or Liaison Office (LO), based on business goals and RBI guidelines.Reserve Company Name
File the name reservation application through RUN (Reserve Unique Name) on the Ministry of Corporate Affairs (MCA) portal.Incorporate the Entity
Use SPICe+ (Simplified Proforma for Incorporating Company Electronically) to incorporate and obtain PAN, TAN, and DINs.
Appoint at least one Indian resident director (as per Section 149(3) of the Companies Act, 2013).
Month 3–4: Banking & Finance Setup
Open a Current Account with an RBI-authorized dealer bank.
Obtain Foreign Inward Remittance Certificate (FIRC) for capital inflow.
Comply with FEMA (Foreign Exchange Management Act) for capital structuring and investment reporting.
Set up internal accounting systems, hire finance staff, or onboard a service provider.
Month 5–6: Tax & Statutory Registrations
Register for GST (if annual turnover is expected to exceed ₹40 lakh or dealing in interstate supply).
Register with PF & ESI if employing more than 20 and 10 employees respectively.
Enroll with Professional Tax authorities in applicable states.
Begin monthly TDS filings (Form 24Q/26Q) and maintain compliance calendars.
Month 7–9: Compliance Reporting & Operations
Submit Form FC-GPR for foreign investments to RBI through AD Bank.
File MSME registration if applicable.
Maintain Statutory Registers (register of members, directors, etc.)
Start maintaining monthly accounting books, bank reconciliations, and employee records.
Month 10–12: Annual Filings & Strategic Reviews
File Form FLA (Foreign Liabilities and Assets Return) with RBI.
Hold first Annual General Meeting (AGM) within 9 months of financial year-end.
File Income Tax Return (ITR-6) and Annual ROC filings (Form AOC-4 & MGT-7).
Conduct a compliance audit to check for gaps and make adjustments before year-end.