Open a Private Limited Company in India and Expand your Global Business in 2025 

Doing business in India has never been easier. In addition to the ease of operations and setup, businesses have a choice of business entities; each offering its set of specially curated benefits. From Wholly Owned Subsidiary to a Limited Liability Partnership, choosing the right business incorporation structure is a critical decision during the initial stages of setup.  

Perhaps the most popular business structure is the Private Limited Company (PLCs). As per data from the Ministry of Corporate Affairs, on average, 100,000 PLCs are formed in India every year. And it’s no surprise, this form of business structure offers limited liability, employee attraction, director dual role, and many other great benefits for business. It is also an ideal structure for startups and growing businesses; and lest we forget, PLC can open the door to future funding to expand the business venture. 

In this blog, we take a deep dive into how to open a private limited company in India. By approaching the process with the right information, foreign businesses looking to get started in India can begin with greater certainty.  

Benefits of Opening a Private Limited Company in India 

India’s private limited company structure offers international businesses a secure and scalable gateway to one of the fastest-growing economies. With a defined legal identity, full foreign ownership, and a digitized incorporation process, it presents a strong foundation for long-term growth and compliance. 

• Limited Liability and Independent Legal Status: A private limited company is treated as a distinct legal entity, separate from its owners. This independence ensures that shareholders’ liability is limited to their investment in the company. Their personal assets remain protected in the event of debt or business loss. Such protection builds confidence among investors and global partners who value corporate risk insulation. 

• 100% Foreign Ownership under FDI Policy: As per the FDI policy of India, a foreign entrepreneur may hold up to 100% equity in most sectors on the automatic route and need not have an Indian partner. This policy update, further expanded in 2025 for industries like insurance and fintech, allows UK and global investors to establish fully owned subsidiaries and exercise complete control over operations, governance, and technology transfer. 

• Access to India’s Expanding Domestic Market: With over 1.4 billion consumers, India offers a huge and continuously expanding market displaying solid demand for digital services, renewable energy, healthcare, and consumer goods, among other sectors. The setup of a private limited company will provide the foreign enterprise with direct exposure to Indian consumers, while it can bid directly for various government and private tenders, with its regional expansion not entailing too much administrative burden 

• Simplified Digital Incorporation and Compliance: Incorporation has become largely paperless through the MCA’s SPICe+ system, which integrates multiple registrations in one form, such as PAN, TAN, GST, EPFO, and ESIC. Further streamlining of the workflows was achieved when the MCA V3 portal was launched in 2025, whereby companies could be registered within 7-10 working days. These reforms in digitization have lowered the time required to process, increased transparency, and reduced compliance costs both for startups and subsidiaries alike. 

• Strong Investor Appeal and Fundraising Flexibility: The private limited structure is widely accepted by venture capital and private equity investors due to its transparency and shareholding flexibility. Capital can be raised through equity, convertible instruments, or preference shares, offering scalable growth opportunities. This legal framework also facilitates easier valuation during fundraising and allows foreign-owned entities to attract both domestic and international capital. 

• Competitive Tax and Regulatory Framework: India has some of the most globally attractive corporate tax rates. New manufacturing companies are taxed at 15%, while standard private limited companies are taxed at 22% excluding surcharges and cess. Incentives such as those under Make in India, SEZ benefits, and state-specific investment schemes further reduce the effective cost of doing business. These, together with the simplification in FEMA reporting for foreign investments, make the Indian tax environment increasingly business friendly. 

What are the Requirements to Set Up a Private Limited Company in India? 

There are several legal structures through which a foreign entrepreneur, including UK nationals, can establish a business presence in India. The option to open a private limited company in India is highly preferred due to its limited liability, perpetual succession, and fully foreign ownership. Some eligibility requirements to set up a business structure are: 

• Minimum two directors and two shareholders, with one of the directors being an Indian resident. An Indian resident is an individual who has remained in India for a minimum period of 182 days during the last calendar year. 

• An Indian registered office, backed with address proof and NOC from the building owner. 

• Directors need to procure a Digital Signature Certificate (DSC) and a Director Identification Number (DIN) for company incorporation. 

• Memorandum of Association (MOA) and Articles of Association (AOA) must be prepared. 

• A bank account in the name of the company is necessary for business operations. They also need to procure a Permanent Account Number (PAN) and Tax Deduction Account Number (TAN). 

Key Legal and Regulatory Framework 

When it comes to the incorporation of a private limited company, there are various government, legal, and regulatory frameworks that come into play. Some key legal and regulatory frameworks are: 

1. FDI Policy: It allows 100% foreign ownership in most sectors under the automatic route, including IT, e-Commerce, and renewable energy. As of 2025, the FDI cap in the insurance sector has jumped from 74% to 100%. This jump is for those companies that will commit to investing the entire premium amount within India. Such steps reflect the government’s continued push towards investment liberalisation.   

2. RBI Master Directions: Recently amended in January 2025, it aims to clarify compliance requirements for Foreign Owned and Controlled Companies (FOCCs). It also streamlines deferred payment arrangements and enhances reporting norms, reducing administrative burden on foreign investors.  

3. Automatic Vs. Government Route: Most of the sectors fall under the automatic route; as a result, they require no prior approval. The sectors like broadcasting and telecommunications have specific caps and conditions depending on a case-by-case evaluation. When it comes to sectors like defence, up to 74% is automatic, and beyond that requires government approval.  

4. Resident Director Requirement: One director of the board should be an Indian resident to guarantee local responsibility and compliance with regulatory requirements. 

5. Compliance with FEMA: All foreign investments are required to adhere to FEMA regulations, including timely filing of Form FC-GPR and keeping Foreign Inward Remittance Certificates (FICR) for shared capital remittances. 

Step-by-Step Process to Open a Private Limited Company in India 

When a foreign entrepreneur plans to open a Private Limited Company in India, there are various steps that they must go through. Most of the processes are online and are conducted through the Ministry of Corporate Affairs (MCA) portal using Simplified Proforma for Incorporating Company Electronically Plus form (SPICe+ Form). It integrates ten services across multiple government departments into a single application. Some key requirements during the integration processes are: 

1. Digital Signature Certificate (DSC): Company directors must obtain a Digital Signature Certificate. It is required for signing electronic documents on the MCA portal. Foreign nationals may obtain DSC from their home country with the assistance of certifying authorities. 

2. Director Identification Number (DIN): DINs are applied for through the SPICe+ form. Identity and address proof documents are required that must be notarized and apostilled or verified by the Indian consulate. 

3. Name Reservation (SPICe+ Part A): Reserve a distinctive company name by the applicant. The proposed name must be different from all the existing ones and must comply with the naming rules. 

4. Incorporation Filing (SPICE+ Part B): It includes submission of the Memorandum of Association (MoA) and Articles of Association (AoA), along with declarations for PAN, TAN, EPFO, GST, and ESIC registrations. 

5. Document Notarisation and Apostille: For any foreign directors or shareholders, all documents need to be notarised and either apostilled if the country is a part of the Hague Convention or verified by the Indian consulate if it is not. If there is a need, documents should also be translated into English.  

6. Certificate of Incorporation (Col): Once the verification is done, the Registrar of Companies (RoC) issues the Col with a Corporate Identification Number (CIN). It generally takes between 7 and 10 working days, after which the legal existence of the company is finalised.  

Post Incorporation Requirements 

When a foreign company sets up a private limited company in India, the resulting company needs to complete various statutory and operational requirements. These are prerequisite steps to start business and stay in compliance. 

1. Corporate Bank Account: The firm must open a corporate bank account in India. They also need to deposit the subscribed share capital in the account within 180 days of incorporation. Remittance of funds from overseas needs a Foreign Inward Remittance Certificate (FIRC) from the concerned receiving bank. 

2. GST registration: It becomes a compulsive step if the company’s annual turnover is more than Rs. 20 lakhs (for special category states, it’s Rs. 10 lakhs). The company also needs to do GST registration if it is involved in the supply of goods or services in inter-state. 

3. FC-GPR Filings: The company shall file Form FC-GPR with RBI using the Foreign Investment Reporting and Monitoring System (FIRMS). It is to be submitted within 30 days of allotment of shares to report foreign investment information. 

4. Statutory Compliance: It comprises the filing of financial statements on an annual basis via Form AOC-4 and annual returns via Form MGT-7 with the MCA. It also entails compliance with regulations on transfer pricing in international transactions and keeping statutory records and registration at the office of the registrar. 

5. EPFO and ESIC Registration: It is mandatory in the event the company employs above 20 employees to maintain compliance with employment benefits and labour laws. 

Government Fees and Charges for Company Registration 

There are some official fees prescribed by the Ministry of Corporate Affairs (MCA) for the registration of companies under the Companies Rules, 2014. These fees are applicable to all applicants, including foreign entrepreneurs who are planning to open a Private Limited Corporation in India. The fees are based on the authorised share capital of the company and are payable at the time of incorporation through the SPICe+ form. 

Recent Reforms to Make Doing Business in India Easy 

There have been several reforms in 2025 to make doing business in India easy. Regulatory clarity, investment liberalisation, and the focus on digitalisation have had a huge impact on the Indian business structure. Such steps by the government have attracted foreign entrepreneurs to invest in India. Some key reforms are: 

1. MCA V3 Portal: In 2025, an additional set of e-forms migrated to the MCA V3 Portal to make it more user-friendly, further improving processing efficiency and transparency in company filings. 

2. SPICe+ Optimisation: It makes the integration with state-level registrations much smoother and the processing of PAN, TAN, and GST applications much faster. Quicker processing cuts down the average incorporation time to under 10 days.  

3. Union Budget Reforms: 2025 Union budget introduced an increase in the Insurance sector FDI cap to 100%. It also proposed an Investment Friendliness Index to benchmark state-level regulatory performance. The idea is to encourage competition among states to improve investor service.  

4. RBI Amendments: These amendments happened in January 2025, with the idea of reducing the administrative burden on foreign-owned companies. It clarified compliance requirements for FOCCs and eased reporting norms.  

5. Digital India Initiatives: This initiative played a huge role in expanding e-governance in the Company Law. It resulted in paperless, faceless, and time-bound services, which aligned with best global practices in business registration.  

Conclusion 

The idea to open a Private Limited Company in India for overseas entrepreneurs comes along with distinct route to access one of the fastest growing international markets. With improved FDI regulations, and digitalisation across regulatory platforms India provides a transparent and globally competitive business environment.  

For companies planning to open a Private Limited Company in India, having an experienced advisor as a partner can be a great advantage. Stratrich Consultancy is equipped with experienced professionals that can help foreign businesspeople with each phase of incorporation of the company, compliance management, and cross-border structuring.