This journey assumes
- The French parent is a French-resident operating company (for example an SAS or SA), not a bank, insurer or investment fund, and will hold all or almost all of the Indian company.
- The Indian activity is open to 100% FDI under the automatic route (for example manufacturing) and is not in a capped or government-route sector.
- No beneficial owner of the French group is linked to a country sharing a land border with India.
- Funding will be equity at incorporation, possibly followed by a loan from the French parent, and the Indian company may pay royalties or service fees to France.
- Rules are stated as at 19 October 2026.
If any assumption is wrong for your business, the conclusions change. Ask WONE Global to re-run the analysis with your facts.
Both sides of the border, issue by issue
Each row is one part of the work. The left and right columns show what each country's rules require, so you can see where one side's decision constrains the other.
Investing into India under the FDI rules
Most activities, including manufacturing, are open to 100% foreign investment under the automatic route without prior approval. The investment must arrive through banking channels, shares must be issued within sixty days and the issue reported within thirty days, with an annual return each July.
- The French parent needs no Indian approval for an automatic-route activity, but the route depends on the sector and on the activity's conditions, so confirm it before committing funds.12
- If any beneficial owner of the French group is linked to a country sharing a land border with India, the investment moves to the government route and needs approval.3
- The subscription must be paid by inward remittance through banking channels, so the French parent's bank transfer is the starting point of the Indian reporting trail.4
- Under the automatic route no prior approval from the RBI or government is needed; manufacturing is open to 100% FDI.12
- Shares must be issued within sixty days of receiving the money, or the money refunded, and the issue reported in Form FC-GPR within thirty days.56
- Every year the company files the Annual Return on Foreign Liabilities and Assets by 15 July.7
Forming the Indian company
A subsidiary is usually a private limited company incorporated through the SPICe+ form, with at least two directors and one director who has stayed in India 182 days or more. A branch or liaison office is possible under separate RBI rules, but a branch is taxed at a higher rate.
- French corporate documents used for incorporation (constitution, board resolutions, extracts) can be legalised by apostille, as both France and India are parties to the Apostille Convention; check the Indian authority's current requirements.8
- A branch of the French company would be taxed in India at the foreign company rate of 35% before surcharge and cess, against 22% to 30% for an Indian subsidiary.9
- A private company needs at least two directors, and every company needs at least one director who has stayed in India for at least 182 days, so a resident director must be found before incorporation.1011
- SPICe+ combines name reservation, incorporation, director identification numbers, PAN and TAN, EPFO and ESIC registration, GSTIN and bank account opening.12
- Branch, liaison and project offices follow separate FEMA regulations and an RBI Master Direction, and suit narrower activities.13
Tax and the France-India treaty
The Indian company can opt for a 22% base corporate rate. India's domestic rate on dividends to a foreign company is 20%, but the France-India treaty rate of 10% applies where it is more beneficial and the French parent provides a tax residency certificate and the prescribed form. The treaty's most-favoured-nation protocol and the French tax treatment of Indian dividends were not confirmed.
- The French parent pays French corporate tax at 25%; how dividends, interest, royalties and service fees from India are taxed in France, and how Indian tax is credited, was not confirmed.14
- France publishes its treaties, including consolidated versions modified by the OECD Multilateral Instrument, on impots.gouv.fr; the France-India treaty and its protocol should be read there.1516
- Large French groups must hold full transfer pricing documentation and file an annual transfer pricing return, which should be consistent with the Indian file.17
- From 1 April 2026 Indian income tax is governed by the Income-tax Act, 2025. A domestic company may opt for a 22% rate plus surcharge and cess, otherwise 25% or 30%.1819
- Dividends paid to a foreign company are taxed at 20% under domestic law, but the treaty rate applies if more beneficial; the Income Tax Department lists 10% on dividends, interest, royalties and fees for technical services for France.202122
- To get the treaty rate the French parent must give a valid tax residency certificate and the prescribed form, and each remittance carries an accountant's Form 15CB certifying the treaty provision and rate.2324
- International transactions with the French parent need arm's length pricing and an accountant's report; the company is Indian resident, and the French parent should avoid creating a place of effective management for any other group company in India.2526
- GST applies at 18% standard or 5% merit rates, with registration above the turnover thresholds through SPICe+.2712
Funding and bank accounts
Equity is the simplest funding. A loan from the French parent is an external commercial borrowing under an RBI Master Direction updated in September 2026, and Indian interest deductions are capped at 30% of EBITDA above INR 10 million of such interest.
- A loan from the French parent must follow the External Commercial Borrowings Master Direction, last updated on 8 September 2026; its conditions could not yet be checked.28
- Interest paid to the French parent is deductible only up to 30% of EBITDA, with an eight-year carry forward, unless total such interest is INR 10 million or less.29
- Indian banks apply the RBI KYC Directions, 2025 when opening the company's account, including checks on the French parent and its beneficial owners.30
Seconded staff and social security
India and France have a social security agreement, so a French employee sent to India with a certificate of coverage from France can be excluded from the Indian provident fund. Without it, foreign employees contribute on their full salary. Indian employment is now governed by the four labour codes.
- France is on EPFO's list of countries with which India has a social security agreement; the French certificate of coverage is what keeps a seconded employee in the French system. The maximum detachment period was not confirmed.3132
- Foreign passport holders working for a covered establishment are international workers who contribute on full salary, unless excluded by a certificate of coverage under a social security agreement.3332
- Local employees are covered by the four labour codes in force since 21 November 2025, with provident fund contributions of 12% each from employer and employee.3435
Importing from France
There is no free trade agreement in force between the EU and India: negotiations concluded in January 2026 but the agreement awaits signature and conclusion. Imports from France pay Indian customs duty and IGST, and some products need BIS certification.
- EU-India free trade agreement negotiations concluded on 27 January 2026, but the agreement is not yet in force, so French exports to India currently pay standard Indian duties.36
- The Indian company needs an Importer-Exporter Code from DGFT before importing.37
- Basic customs duty is generally 7.5% or 10% depending on the tariff line, and products covered by a Quality Control Order need BIS certification before import or sale.3839
Structures to consider
These are the structures businesses commonly weigh, not a recommendation. The right one depends on the facts listed under "What we need from you".
What has to happen first
- IndiaConfirm the activity is under the automatic route at 100% and that no beneficial owner is linked to a land-border country.
- FranceFrench board approves the investment, funding mix and directors; obtain a French tax residency certificate for treaty claims.After step 1
- Both sidesIdentify at least two directors, including one who meets the 182-day Indian stay requirement, and apostille the French documents needed.After step 2
- IndiaIncorporate the Indian private company through SPICe+, obtaining PAN, TAN, GSTIN and EPFO and ESIC registration.After step 3
- Both sidesOpen the Indian bank account and remit the share subscription from France through banking channels.After step 4
- IndiaIssue shares within sixty days of receipt and file Form FC-GPR within thirty days of issue.After step 5
- IndiaObtain the Importer-Exporter Code and any BIS certification for imported products.After step 4
- Both sidesApply for French certificates of coverage for seconded staff and enrol other foreign staff in the provident fund as international workers.After step 4
- Both sidesSign intercompany agreements for supplies, royalties, services and any loan, with transfer pricing documentation consistent in both countries.After step 4
- IndiaIf a loan is used, agree terms under the ECB framework with the authorised dealer bank before drawdown.After step 5, 9
- Both sidesBefore each payment to France, provide the tax residency certificate and prescribed form and obtain Form 15CB so the treaty rate is applied.After step 2, 9
- Both sidesOngoing: Form FLA by 15 July, Indian tax and transfer pricing filings, French transfer pricing documentation, and annual review of treaty eligibility.After step 6
What we need from you before anyone can advise
- The Indian business activity and its sector conditions under the FDI policy.
- Ultimate beneficial owners of the French group and any land-border-country links.
- Funding amounts and the split between equity and a parent loan.
- Whether the Indian company will pay royalties, technical fees or service fees to France, and for what.
- How many French employees will be seconded, for how long, and who will employ them.
- Who will act as the India-resident director.
- Products to be imported from France, their HS codes and whether Quality Control Orders apply.
- Group consolidated turnover (French and Indian transfer pricing documentation thresholds).
What this guide does not yet confirm
These points need checking with a qualified local professional before you rely on them.
- WebSearch budget was exhausted and WebFetch was rate-limited before the France-India bilateral points could be researched; this journey relies entirely on previously source-checked claims.
- The France-India treaty text could not yet be checked: dividend, interest, royalty and fees for technical services articles, permanent establishment thresholds and the protocol's most-favoured-nation clause are unconfirmed beyond the Income Tax Department's rate table.
- Whether the most-favoured-nation clause can lower the 10% rates, and whether Indian case law requires a separate notification before it applies, were not confirmed.
- Whether and how the MLI modifies the France-India treaty (principal purpose test, dates) was not confirmed; France's MLI page and India's synthesised texts could not yet be checked for this treaty.
- French taxation of Indian dividends (parent-subsidiary regime), credit for Indian withholding tax and French CFC rules were not researched.
- The France-India social security agreement's detachment period, scope and certificate procedure were not confirmed on French or Indian official pages; EPFO's list is the only source.
- Whether a France-India bilateral investment treaty remains in force, or has lapsed after India's termination of older treaties, was not confirmed.
- ECB conditions, FDI pricing guidelines and Indian employment visa rules for French staff could not yet be checked.
- French reporting of outward direct investment for statistical purposes was not researched.
Brief for your advisers
Questions to put to your advisers in each country. Copy them, or download them as a text file to send with your requirement.
- Indian FEMA adviser: is our activity fully under the automatic route, and what will the bank need for the remittance, share issue and FC-GPR?
- Indian tax adviser: what rate will apply to dividends, royalties and technical fees paid to France under the treaty and its protocol, and what documents do we need each year?
- Indian tax adviser: does the most-favoured-nation clause in the France-India protocol reduce any rate for us, and does it need a separate Indian notification to apply?
- French tax adviser: how will dividends, royalties and interest from India be taxed in France, and can the Indian withholding tax be credited?
- Indian FEMA adviser: what are the current ECB conditions for a loan from our French parent after the September 2026 update?
- Both tax advisers: what transfer pricing policy should govern supplies, royalties, services and interest between the two companies?
- Payroll adviser: how do we obtain French certificates of coverage for our secondees, for how long are they valid, and what applies to other foreign staff?
- Customs adviser: what duties and certifications apply to our imports from France, and when might the EU-India agreement change them?
Who can help, on each side
France
- Setting up and running a company · Arranged by WONE Global on request
- Licences, permits and regulators · Arranged by WONE Global on request
- Payments and currency · Arranged by WONE Global on request
- Tax and structuring · Arranged by WONE Global on request
- Accounting and annual filings · Arranged by WONE Global on request
- Banking and capital · Arranged by WONE Global on request
- Treasury and funding · Arranged by WONE Global on request
- Employment, payroll and immigration · Arranged by WONE Global on request
- Customs, trade and export controls · Arranged by WONE Global on request
India
- Setting up and running a company · Arranged by WONE Global on request
- Licences, permits and regulators · Arranged by WONE Global on request
- Payments and currency · Arranged by WONE Global on request
- Tax and structuring · Led by Sandeep Gupta
- Accounting and annual filings · Led by Sandeep Gupta
- Banking and capital · Arranged by WONE Global on request
- Treasury and funding · Arranged by WONE Global on request
- Employment, payroll and immigration · Arranged by WONE Global on request
- Customs, trade and export controls · Arranged by WONE Global on request
Sources and review status
Each statement is numbered to the source it was checked against. We use official sources where we can, and each statement says whether it was checked against an official or a secondary source. Sources last checked on 19 October 2026. None of it has been professionally reviewed yet: it is research checked against official and secondary sources by WONE Global, not legal or tax advice.
Foreign investment under the automatic route does not need prior approval of the RBI or the central government, while investment under the government route needs prior government approval and must follow the conditions of that approval. Applies by sector under the Consolidated FDI Policy and the FEMA (Non-debt Instruments) Rules, 2019. Central rule.
The FAQ document is undated; it refers to the Consolidated FDI Policy Circular of 15 October 2020 as amended.
Manufacturing is open to 100% foreign direct investment under the automatic route. Subject to the sector conditions and the land-border-country rule. Central rule.
The sector table extract was hard to read; confirm against Chapter 5 of the Consolidated FDI Policy.
An entity of a country sharing a land border with India, or an investment whose beneficial owner is linked to such a country, can invest only under the government route, and a later transfer that brings beneficial ownership within this category also needs government approval. Press Note 3 (2020 Series) dated 17 April 2020, as revised in 2026; subject to the 10% non-controlling exception in in-establish-004. Central rule.
The FAQ uses the 2020 wording (beneficial owner situated in or a citizen of such a country). Secondary sources report that Press Note 2 (2026 Series) dated 15 March 2026 removed the 'situated in' limb so the test now turns on citizens and entities of those countries; the official Press Note text could not yet be checked.
Consideration for equity instruments issued to a person resident outside India must be paid by inward remittance from abroad through banking channels or from the investor's repatriable foreign currency or rupee account in India, and may include a swap of equity instruments. Central rule (RBI).
Equity instruments must be issued to the foreign investor within sixty days of receipt of the consideration, failing which the consideration must be refunded within fifteen days after the sixty days end. Central rule (RBI).
An Indian company that issues equity instruments to a person resident outside India as foreign direct investment must report the issue in Form FC-GPR not later than thirty days from the date of issue. Central rule (RBI). Reporting is made through an authorised dealer bank unless otherwise stated.
An Indian company that has received foreign direct investment must submit the Annual Return on Foreign Liabilities and Assets (Form FLA) to the Reserve Bank on or before 15 July each year. Central rule (RBI).
The Hague Apostille Convention is in force for India (from 14 July 2005), Saudi Arabia (7 December 2022), Singapore (16 September 2021), the United Kingdom (24 January 1965), the United States (15 October 1981), Germany (13 February 1966) and France (24 January 1965). Hague Convention of 5 October 1961 Abolishing the Requirement of Legalisation for Foreign Public Documents. Some contracting states have objected to particular accessions (India is marked with an objection), in which case the Convention does not apply between those states; check the pair concerned.
The status table listed 130 contracting parties when checked.
In India, the basic corporate tax rate is 35% for foreign companies with a permanent establishment (such as a branch), compared with 25% or 30% for domestic companies and concessional rates of 22% (and 15% for qualifying new manufacturers) for domestic companies that opt in. Rates before surcharge and health and education cess; effective rates range from about 26% to 38.22%. Concessional regimes carry conditions.
Secondary source; confirm against the Income-tax Act, 2025 and the Finance Act, 2026 on incometaxindia.gov.in.
A private company must have at least two directors, a public company at least three and a one person company one, with a maximum of fifteen unless more are approved by special resolution. Section 149(1), Companies Act, 2013. Central rule.
Secondary summary of the statute by the professional body; the official Act text on India Code or the MCA site could not yet be checked.
Every company must have at least one director who has stayed in India for a total period of not less than 182 days. Section 149(3), Companies Act, 2013. Applies to foreign-owned subsidiaries. Central rule.
The sources opened describe the period as the previous calendar year; the measurement period may have been amended by later legislation. Confirm the current wording on an official text.
SPICe+ is the Ministry of Corporate Affairs' integrated web form for incorporating a company, with Part A for name reservation and Part B covering incorporation, director identification numbers, PAN and TAN, EPFO and ESIC registration, GSTIN and opening a bank account, filed with linked eMoA, eAoA and AGILE-PRO-S forms. Professional tax registration through the form applies to new companies in Maharashtra and Karnataka only (a state-level registration). Central filing.
Branch, liaison and project offices of foreign entities are governed by the FEMA (Establishment in India of a branch office or a liaison office or a project office or any other place of business) Regulations, 2016, with operating rules in an RBI Master Direction last updated as on 18 May 2021. Central rule (RBI under FEMA, 1999).
The regulations are also named in DPIIT's FAQs on FDI Policy (FAQ 7). The Master Direction text itself could not yet be checked, so eligibility criteria are not stated here.
The standard corporate income tax (impôt sur les sociétés) rate is 25% on profits made in France.
Legal basis: Code général des impôts, article 219.
France publishes its bilateral tax treaties on impots.gouv.fr, including consolidated versions modified by the OECD Multilateral Instrument, which France signed on 7 June 2017 and which entered into force on 1 January 2019. Treaty-by-treaty application dates of MLI provisions vary.
The page does not state a total number of treaties.
The MLI entered into force for India on 1 October 2019. Effect on each treaty depends on both parties' MLI positions.
Companies with annual turnover or gross assets of at least 150 million euros, or linked by 50% or more to such an entity, must hold full transfer pricing documentation available at the start of a tax audit, and those at 50 million euros or more must file an annual light transfer pricing return (form 2257). Country-by-country reporting applies to groups with consolidated turnover of at least 750 million euros. Documentation penalty: the greater of 5% of profits deemed transferred or 0.5% of undocumented transactions, minimum 50,000 euros per year.
Secondary source (last reviewed 24 April 2026); confirm against Livre des procédures fiscales articles L13 AA and L13 AB and CGI article 223 quinquies B.
The Income-tax Act, 2025 came into force on 1 April 2026, replacing the Income-tax Act, 1961. Central tax. The Act received presidential assent on 21 August 2025.
A domestic company may opt for a corporate income tax rate of 22% plus a 10% surcharge and 4% health and education cess, subject to conditions. Optional regime for domestic companies. Otherwise basic rates of 25% (turnover up to INR 4 billion in the reference year) or 30% apply. Central tax.
Secondary source (last reviewed 11 May 2026); the Act's rate provisions could not yet be checked on an official page.
Under section 207 of the Income-tax Act, 2025, dividends received by a foreign company are taxed at 20%, other than dividends from a unit in an International Financial Services Centre, which are taxed at 10%. Rate before any surcharge and health and education cess, which were not confirmed.
Surcharge and cess are not stated on this page.
India taxes a non-resident's dividends, interest, royalties and fees for technical services under the Income-tax Act or the applicable treaty, whichever is more beneficial to the non-resident. Requires the non-resident to be entitled to the treaty (residence, beneficial ownership, documentation, anti-abuse rules).
The page states it reflects the Income-tax Act, 1961 as amended by the Finance Act, 2026; its 'last reviewed' date is blank.
The Income Tax Department lists India-France treaty rates of 10% on dividends, interest, royalties and fees for technical services. India-France DTAA; the France treaty has a most-favoured-nation protocol that was not examined.
To claim a treaty withholding rate, a non-resident must provide a valid tax residency certificate and the prescribed form, which is mandatory even if the certificate already contains the required information. Central tax. The Supreme Court has treated the certificate as an eligibility condition rather than conclusive proof of treaty entitlement.
Secondary source; the prescribed form number under the 2026 Rules was not confirmed.
For remittances from India, the accountant's certificate in Form 15CB certifies, among other things, the applicable DTAA provisions and the TDS rate. Remittance procedures follow the law in force on the remittance date.
A transfer pricing master file is required for Indian entities of groups with consolidated turnover above INR 5 billion where transaction thresholds are met, and country-by-country reporting applies to groups with consolidated turnover above INR 64 billion. An accountant's transfer pricing report is also required for international and specified domestic transactions, filed one month before the return due date. Central tax.
Secondary source (last reviewed 11 May 2026); the country-by-country threshold was previously INR 55 billion.
Under section 6 of the Income-tax Act, 2025 a company is resident in India if it is an Indian company or its place of effective management in the year is in India. Central tax.
From 22 September 2025 GST moved to a two-rate structure of 18% (standard) and 5% (merit), with a special 40% rate for a select few goods and services. Pan masala, gutkha, cigarettes, chewing tobacco, unmanufactured tobacco and bidi stay at earlier GST and compensation cess rates until compensation cess loans are repaid. Central and state GST together.
The press release records the Council's recommendations; the implementing rate notifications could not yet be checked.
The RBI Master Direction on Foreign Investment in India (issued 4 January 2018) is shown as updated up to 15 June 2026, and the Master Direction on External Commercial Borrowings, Trade Credits and Structured Obligations as updated on 8 September 2026. Central rule (RBI).
The listing was opened; the Master Direction texts themselves could not yet be checked.
Interest paid by an Indian company to an overseas associated enterprise, or on third-party debt it guarantees, is disallowed to the extent it exceeds 30% of EBITDA, with carry forward for up to eight years; the rule does not apply where total such interest does not exceed INR 10 million. Central tax.
Secondary source (page last reviewed 11 May 2026); the section of the Income-tax Act, 2025 could not yet be checked.
Commercial banks apply the Reserve Bank of India (Commercial Banks – Know Your Customer) Directions, 2025, shown as updated as on 1 October 2026. Separate KYC directions apply to small finance, payments, local area, regional rural and co-operative banks. Central rule (RBI).
The listing was opened; the directions' content was not reviewed.
India's Employees' Provident Fund Organisation lists social security agreements with Belgium, Germany, Switzerland, Luxembourg, France, Denmark, Korea, the Netherlands, Hungary, Finland, Sweden, the Czech Republic, Norway, Austria, Canada, Australia, Japan, Portugal, Brazil and Quebec, and issues certificates of coverage for employees posted to those countries. Central. The UK, the US, the UAE, Saudi Arabia and Singapore are not on the list.
EPFO's 2022 brochure marked the Brazil agreement as not yet in force; the page does not give effective dates. Any India-UK social security arrangement was not confirmed.
An international worker is an excluded employee, outside the Indian provident fund, if a national of a country with which India has a social security agreement and holding a certificate of coverage from the home country, or a Singapore national contributing to Singapore's system under the India-Singapore CECA of 2005. Employees' Provident Fund Scheme, central.
2022 brochure; confirm current position.
Employees holding a non-Indian passport who work for an EPF-covered establishment in India are international workers, who contribute on their full salary because the wage ceiling does not apply to them. Exemption is available where the worker is covered by a social security agreement with the home country.
The four labour codes (Code on Wages, 2019; Industrial Relations Code, 2020; Code on Social Security, 2020; Occupational Safety, Health and Working Conditions Code, 2020) took effect on 21 November 2025, rationalising 29 existing labour laws. Central laws; states notify their own rules for implementation in their territory.
Provident fund contributions are 12% by the employer and 12% by the employee, calculated on wages as defined under the codes. Employees' Provident Fund; wage ceilings and applicability thresholds not confirmed.
Secondary source; the EPFO site could not be reached.
Negotiations on an EU-India free trade agreement concluded on 27 January 2026, and the Commission has proposed that the Council authorise its signature and conclusion; it is not yet in force. Status per the Commission page updated 11 September 2026. The Commission states the agreement eliminates or reduces tariffs on over 96% of EU goods exports to India.
No person may make any import into or export from India except under an Importer-Exporter Code (IEC) granted by the DGFT. Applies to proprietorships, partnerships, LLPs, companies, trusts, HUFs and societies. Exemptions, if any, were not confirmed. Central rule.
Basic customs duty on imports is generally levied at 7.5% or 10%. Rates vary by tariff line; central levy under the Customs Tariff.
Secondary source (last reviewed 11 May 2026); the customs tariff could not yet be checked.
BIS product certification is voluntary in principle, but for products where the Central Government issues a Quality Control Order, use of the BIS Standard Mark under a BIS licence or Certificate of Conformity is mandatory. Grounds include public interest, health, safety, environment, prevention of unfair trade practices and national security. Central rule.
The list of products under compulsory certification (page updated 24 September 2026) was not reviewed product by product.
