Setting up your business in India: GEOS Guide for Global Expansion

This is apart of our weekly series associated with the The Global Subsidiary Index. The series is designed to help businesses identify the best countries for establishing a subsidiary based on key operational factors. GEOS provides a data-driven ranking of jurisdictions worldwide, assessing across 40+ criteria to bring you insights into global expansion opportunities.

Each country on the index is scored on an overall score out of 100, with each individual criterion out of 5 or 10. Higher scores indicate a more favorable environment for businesses. By leveraging these insights, companies can make informed decisions on where to establish a legal presence.

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If you’re asking how a company registers in India, it helps to first understand why so many businesses are heading there in the first place. It’s on track to become the world’s third-largest economy by 2027, surpassing Germany and Japan.

At the same time, it’s building one of the most active startup ecosystems in the world, with over 90,000 startups and more than 100 unicorns already in play. Foreign investment is rising too. FDI grew more than 12% year-over-year, reaching nearly $68 billion between April 2024 and January 2025. In total, FDI hit $70 billion for the year, proof that global businesses see strong potential in India.

If you’re planning to expand, India is hard to ignore. But setting up a business takes local insight and careful execution. This guide explains how GEOS makes it easier, from registration to compliance to managing operations on the ground.

Why Should You Expand to India?

India is the fastest-growing major economy in Asia. GDP is set to grow by 6.2% in 2025 and 6.3% in 2026. Its GEOS Global Subsidiary Index Score sits at 59.6. That puts it high on the list of top emerging markets. The score reflects its huge scale, strong digital growth, and improving business climate. Reforms are making it easier for global companies to enter and expand.

India also gets a 5 out of 5 for population strength. It now has more than 1.4 billion people—the largest population in the world. The middle class is growing fast, and so is spending. It’s also a major tech hub. About one-third of the world’s STEM graduates come from India.

• That means a deep talent pool for tech, engineering, and R&D.
• Rising incomes are fueling demand for consumer and digital products.

Aligning expansion strategies with business objectives can help companies achieve their goals more effectively.

Its financial infrastructure is strong too. India scores 4 out of 5 in this area. The banking system is stable, and fintech is growing fast. The fintech market is already worth $111 billion and could reach $421 billion by 2029.

• Digital payments are on track to hit 65% of all transactions by 2026.
• Platforms like UPI and digital lending tools make payments simple and secure.

Together, these strengths make India a smart move for companies looking to grow. It offers scale, talent, and the tools to build for the future. You just need to know the ins and outs of legal entities, tax nuances, and how a company registers in India to get started. Understanding legal compliance is essential for successful business operations in India.

Competitive Tax & Business Incentives

Lowering your tax burden can give your business more room to grow. India helps global businesses do that. While its overall corporate tax score is 4 out of 10, the real advantages come from targeted incentives. New manufacturing companies can pay just 15% in corporate taxes, while others can access a 22% concessional rate under special provisions.

The government also offers meaningful support through:

• Special Economic Zones (SEZs) with tax holidays and customs exemptions
• Production Linked Incentive (PLI) schemes that reward increased output in key industries

Startups benefit as well. Eligible companies can deduct 100% of profits for three years within their first ten. They also gain access to capital gains exemptions and can carry forward losses if they meet certain ownership rules.

India keeps payroll costs manageable, too. With a Payroll Cost Score of 3 out of 5, wages and benefits are lower than in many developed markets. Employers contribute 12% of base salary to the Employees’ Provident Fund (EPF)—a fixed, predictable cost. Professional fees are a key component of the costs associated with setting up a business in India.

Additional incentives apply to sectors like infrastructure, affordable housing, exports, and agriculture. And in GIFT City’s International Financial Services Centre (IFSC), companies enjoy:

• 100% tax exemption for 10 years on eligible income
• Lower tax rates on dividends, interest, and capital gains for non-residents
• No withholding tax on certain cross-border payments

These incentives give companies more breathing room to grow and adapt in a massive market.

Skilled Workforce & Favorable Hiring Regulations

Skilled talent is a key driver of growth, and India has plenty of it. The country has one of the largest and most specialized talent pools in the world, especially in engineering, IT, finance, and operations. Over 1.5 million engineers graduate each year, and India consistently produces highly skilled tech and finance professionals.

• Engineering scores 5 out of 5
• Finance scores 4 out of 5
• Sales and marketing both score 3 out of 5

Union activity is low in white-collar sectors, which means fewer disruptions for most companies. Labor laws are also in transition. India’s Employment Law Complexity Score is 4 out of 10. The government has passed four new labor codes to modernize older laws, but state-level rollout is still in progress. As a result, hiring procedures vary depending on location.

Despite the complexity, India remains a strong option for global hiring. Employer costs are relatively low, and required contributions like the Employees’ Provident Fund are stable and straightforward.

The government is also focused on building future skills. Programs like Skill India Digital Hub and the IndiaAI Mission aim to train workers in AI, cybersecurity, and data analytics. These initiatives support India’s shift toward a more digital economy.

Retention, however, is a challenge. Many top graduates continue to seek higher-paying roles abroad. In response, companies are investing more in training, apprenticeships, and skills-based hiring.

• Around 30% of businesses are moving away from degree requirements
• Many now offer in-house learning and career development opportunities

Hiring in India takes some local knowledge, but the long-term benefits are clear. A deep talent pool, growing upskilling programs, and manageable employment costs make it a strong option for companies building global teams. Post-registration compliance is crucial for maintaining smooth business operations in India.

How to Set Up a Business in India

Start off on the right foot. And that means choosing the right business structure. Setting up a business in India begins with this key decision. Your structure affects taxes, liability, compliance, and how much control you’ll have, along with the required documents needed for registration. Providing comprehensive company details, such as capital, registered office address, and particulars of subscribers and directors, is essential for the registration process.

Most foreign companies choose a Private Limited Company (Pvt Ltd), but other formats may be a better fit depending on your goals. Understanding the minimum paid-up capital requirements is essential for compliance with the Companies Act of 2013.

Common Business Structures in India

Private Limited Company (Pvt Ltd)

The most common option for foreign businesses. Having a company incorporated in India provides benefits such as limited liability protection and compliance with local regulations. It limits liability, allows external funding, and follows clear regulations under the Companies Act. You’ll need to register with the Ministry of Corporate Affairs and meet annual compliance requirements. Selecting an appropriate name is crucial for a successful Pvt Ltd registration.

Limited Liability Partnership (LLP)

An LLP gives you the benefits of a partnership with limited liability. It’s flexible and works well for professional services or joint ventures. You’ll need to register and file regular returns. LLPS must have at least two designated partners, with at least one being a resident of India.

Wholly-Owned Subsidiary

Foreign companies can set up a fully owned Indian entity. It operates like a private limited company and gives the parent company full control. A wholly-owned subsidiary allows the parent foreign company to maintain complete control while complying with local regulations.

Liaison Office or Branch Office

These are for foreign companies testing the market. Liaison offices can’t do business—just coordination and research. Branch offices can generate revenue, but they follow stricter rules. Only proposed directors of an existing company can apply for a Director Identification Number (DIN) using the SPICe+ form.

Joint Venture (JV)

A JV is a partnership with a local business. It’s useful for market access, regulatory entry, or combining expertise. Forming a joint venture creates a new business entity that combines expertise and market access.

Sole Proprietorship and Partnership

These are simple and low-cost but come with unlimited liability. They’re common for local businesses but not ideal for foreign investors. A partnership firm, regulated under the Partnership Act, 1932, is another business structure suitable for small businesses.

One Person Company (OPC)

Designed for solo founders who want limited liability. If the business grows past a certain threshold, it must convert into a Private Limited Company. Additionally, OPCS must comply with specific company incorporation rules under the Companies Act of 2013.

Section 8 Company

For nonprofits and social enterprises. Profits must go back into the mission, not shareholders. They get tax benefits but have strict compliance rules.

Rules vary by structure and sometimes by state. It helps to work with a local expert to stay compliant. Choosing the right setup from the start keeps your business focused and ready to grow.

Incorporation & Compliance Essentials

Red tape in India has eased, but setting up still takes careful planning, and knowing the process helps. The Ministry of Corporate Affairs (MCA) makes it relatively clear how a company registers in India. The process typically takes 10–15 business days.

• File through the MCA portal using SPICe+ (INC-32), eMoA (INC-33), and eAOA (INC-34)
• Get Digital Signature Certificates (DSC) and Director Identification Numbers (DIN). Obtaining a Digital Signature Certificate (DSC) is essential for directors and shareholders to file forms online through the MCA portal.
• Reserve a company name
• Submit incorporation documents
• Apply for PAN, TAN, and GST if needed

The Income Tax Department provides crucial tax identifiers like PAN and TAN for newly incorporated companies.

Foreign companies can open a place of business by filing eForm FC-1. Directors don’t need a DIN, but the authorized rep must register a DSC.

Political and Regulatory Environment

India scores 4 out of 5 for political risk. It’s a stable democracy with a pro-FDI outlook. Still, some regulations vary by state and can slow things down.

The Digital India initiative has helped streamline company registration. But post-incorporation compliance still involves detailed steps. Local legal and accounting help can make a big difference. Understanding the Income Tax Act and regulatory framework is crucial for smooth company incorporation in India.

Compliance Essentials

Once you understand how a company registers in India, you must:

• File annual returns and financial statements with the Registrar of Companies
• Maintain statutory records and hold board meetings
• Follow labour laws and contribute to EPF and ESI

Unlike in some other countries, there is no obligation to appoint a company secretary in India.

India’s Pension Management Score is 3 out of 5. The National Pension System (NPS) is mandatory and well-structured, but it requires regular oversight.

Financial & Banking Considerations

India has a solid banking system and a fast-growing digital economy. Payments are quick and easy. But taxes can get complicated. You’ll need to stay organized to keep things running smoothly.

Additionally, stamp duty is a necessary government fee that varies based on company type and authorized capital. Government fees are a significant component of the overall expenses for company registration, including charges related to name reservation, incorporation filing, and other legal requirements.

India scores 4 out of 5 for financial infrastructure. Banks are stable. Mobile banking is common. But the real standout is UPI (Unified Payments Interface).

• UPI lets people send money instantly, any time, for free.
• It works with apps like Google Pay, PhonePe, and Paytm.
• It’s used by consumers, small shops, and large businesses.

UPI has replaced cash for millions. It’s faster than ACH transfers in the U.S. and has fewer fees. It’s also being adopted by other countries, which says a lot.

Tax and accounting score lower – 4 out of 10. The system is detailed. Rules change often.

• GST rates range from 5% to 28%.
• Corporate tax runs between 15% and 30%, or up to 35% for foreign companies.

You’ll need to file returns on time and keep up with local requirements. A local accountant is almost always a good idea.

Payroll and Pensions

India scores 3 out of 5 for pension management. The payroll system is clear, but there are rules to follow.

• Employers must contribute to EPF and ESI.
• Many workers also use the National Pension System (NPS) to save for retirement.

In short, payments are easy, taxes are not. India’s financial tools are modern, but staying compliant takes work. Set things up right, and the rest becomes much easier. Understanding the initial investment required is crucial for setting up a business in India.

Things To Consider When Expanding into India

Immigration & Work Permits for Foreign Employees

India allows foreign professionals to work, but you’ll need a visa. The Immigration Complexity Score is 2 out of 5, so the process is clear but detailed.

Foreign nationals must apply for an Employment Visa. It’s issued for up to one year or the length of the job contract, whichever is shorter.

• It’s meant for highly skilled or specialized roles.
• You’ll need a valid contract and proof of qualifications.

The process takes time and requires full documentation. Employers usually help with the application. Visas can be extended, but renewals aren’t automatic, so plan ahead.

Cost of Living & Office Space

Where you choose to set up can shape your bottom line. Tier 1 cities like Mumbai, Bengaluru, and Delhi come with high costs. In Mumbai, office rent averages over ₹100 per square foot—India’s highest.

Tier 2 cities like Pune, Hyderabad, and Chennai offer a smarter option. You still get access to skilled talent, but with lower costs across the board.

• Office rent can be 50% less.
• Salaries are often 25–30% lower.

Providing a registered office address is a critical component of the company registration process.

That’s why tech giants like Infosys, TCS, and Wipro are moving into smaller cities like Madurai, Lucknow, and Bhubaneswar. The talent is there, and companies don’t have to spend as much to hire or scale.

State governments are helping with incentives too, offering tax breaks, land deals, and lower utility rates to attract employers.

This shift isn’t just about cost-cutting. It’s also reshaping local economies, spreading opportunity, and making smaller cities key players in India’s tech growth story.

Regulatory & Compliance Risks

Doing business in India is getting easier, but compliance still takes work. The Compliance Reporting Score is 2 out of 5, which reflects the complexity of local laws and tax rules. Understanding company incorporation rules is crucial for navigating regulatory and compliance risks.

Different business structures have varying compliance requirements and implications for the filing of income tax returns, which is crucial for legal and tax obligations.

Along with understanding how a company registers in India, you also need to follow labor laws, stay GST-compliant, and navigate state-level regulations. These can vary widely depending on location.

You’ll need:

• Solid legal and tax advice
• A good understanding of local filing requirements
• Systems are in place for ongoing compliance

India’s Ease of Doing Business Score is 6 out of 10. The government is pushing for digitization and reform. Progress is steady, but businesses still face red tape and regulatory gaps.

Talent Availability & Scaling Considerations

India stands out for talent. The Industry Diversity Score is 5 out of 5, with deep hiring pools for engineering, sales, finance, and more. You can scale fast, especially in tech and back-office roles. Different company structures in India offer various options to raise capital for business growth. Private limited companies are a popular business structure in India for foreign investors due to their scalability and compliance with local regulations.

The Language Score is 4 out of 5. English is widely used in business, but HR practices can vary by state. Benefits, leave policies, and payroll rules may look different across regions.

A local hiring partner can help you adapt and stay compliant while building a strong team across multiple locations.

Regulatory & Compliance Risks

India is working to make business setup easier, but compliance can still be a challenge. The Compliance Reporting Score is 2 out of 5, mainly due to complex tax laws, labor regulations, and state-by-state differences.

Companies must manage GST filings, adhere to local labor laws, and stay on top of corporate filings—all of which vary depending on where you operate. For example, employment benefits or shop and establishment regulations can differ across states.

The government continues to push reforms under its “Ease of Doing Business” campaign, and the overall score has improved to 6 out of 10. Online systems are simplifying registration, tax payments, and license applications. But inconsistencies and delays still pop up, especially if you’re operating in multiple states.

To stay ahead, businesses usually lean on legal advisors, tax consultants, and compliance platforms. It’s not unmanageable, but it’s not yet friction-free. Understanding the steps and requirements involved in company formation is crucial for compliance.

Talent Availability & Scaling Considerations

India offers one of the world’s deepest talent markets. The Industry Diversity Score is 5 out of 5, with strong pipelines for engineering, software development, finance, and operations roles. It’s a top destination for building tech hubs, customer support teams, and offshore delivery centers.

The country produces over 1.5 million engineering graduates each year, and major firms are increasingly tapping into talent in both metro and tier 2 cities.

The Language Score is 4 out of 5. English is the main language for business, which gives global companies a big advantage. However, keep in mind that HR rules, including leave policies, bonus structures, and employee benefits, can differ depending on location and industry.

Business Operations and Management

Business operations and management are crucial aspects of running a private limited company in India. Effective management ensures the company’s objectives are met, and it operates efficiently. This involves a range of activities from market research to financial planning, all aimed at optimizing performance and ensuring compliance with local regulations.

Market Research and Analysis

Market research and analysis are essential for understanding the target audience, industry trends, and competitors. This information helps companies develop a marketing strategy, create products or services that meet customer needs, and stay ahead of the competition. A private limited company can conduct market research through surveys, focus groups, and analysis of industry reports. By leveraging these insights, companies can make informed decisions that drive growth and innovation.

Financial Planning and Management

Financial planning and management involve creating a budget, forecasting revenue, and managing expenses. A private limited company must ensure it has sufficient funds to operate, invest in growth opportunities, and pay taxes. Financial planning also involves obtaining funding through loans, investments, or equity.

The company must comply with the Companies Act and income tax laws and maintain accurate financial records. Effective financial management ensures the company remains solvent and can capitalize on new opportunities.

Marketing and Sales Strategy

A marketing and sales strategy outlines how a private limited company will promote its products or services and generate revenue. This involves identifying the target audience, creating a unique value proposition, and developing a sales plan.

The company can use digital marketing, social media, and traditional advertising to reach its target audience. A well-planned marketing and sales strategy helps the company raise capital, increase sales, and expand its customer base. By focusing on targeted marketing efforts, companies can achieve sustainable growth and a competitive edge.

Operations and Logistics

Operations and logistics involve managing the day-to-day activities of a private limited company, including production, supply chain management, and distribution. The company must ensure it has the necessary infrastructure, technology, and personnel to operate efficiently.

This includes obtaining the necessary licenses and permits, complying with labor laws, and maintaining a safe working environment. Efficient operations and logistics are critical for meeting customer demands and maintaining high standards of quality and service.

Technology and Infrastructure

Technology and infrastructure are critical components of a private limited company’s operations. The company must invest in the necessary hardware, software, and networking equipment to support its business operations. This includes obtaining a digital signature certificate, registering on the MCA portal, and maintaining a registered office address.

The company must also ensure it has a reliable IT infrastructure, including cybersecurity measures, to protect its data and prevent cyberattacks. By leveraging advanced technology and robust infrastructure, companies can enhance their operational efficiency and safeguard their assets.

By focusing on these aspects of business operations and management, a private limited company can ensure it is well-managed, efficient, and compliant with all relevant laws and regulations, including the Companies Act and income tax laws. This helps the company achieve its objectives, raise capital, and expand its business operations in India.

How GEOS Simplifies Your Expansion into India

The Indian market is massive, but it’s not one-size-fits-all. GEOS makes it easy to launch and grow without the usual friction. GEOS also provides comprehensive support for online company registration in India.

End-to-End Entity Setup & Compliance Management

We manage your entity registration, tax setup, labor compliance, and regulatory filings. You won’t need to navigate state-level rules or chase down paperwork. We’ve got it covered. GEOS offers comprehensive support for everything, from setting up a legal entity to registering a company in India.

AI-Powered Global Expansion Support

Let Geovanna handle the moving part. She’s your AI expert for local operations. From HR to payroll to tax compliance, Geovanna keeps everything running smoothly in real time. You get updates and insights without digging through documents or waiting on a call.

Why India?

India scores 59.6 on the GEOS Global Subsidiary Index. It’s a leading choice for affordable scaling, strong talent, and long-term market potential.

In 2025, over 54.8% of India’s workforce is considered employable, up from 51% the year before. That means more than half the talent pool is ready to work, making it easier to build capable teams at scale.

📩 Contact GEOS for a custom expansion plan and grow your business in one of the world’s most dynamic markets.

This article does not constitute legal advice.